Germany Inc.

In​ 1990 the heavy metal band Scorpions released ‘Wind of Change’, a song celebrating the end of the Cold War: ‘The future’s in the air/Can feel it everywhere.’ It also contained the hopeful lines: ‘Let your balalaika sing/What my guitar wants to say.’ It turns out, though, that they had it the wrong way round: it is Putin who calls the tune to which European leaders dance. Fittingly, the Scorpions come from Hanover, home base of Gerhard Schröder, the pre-eminent example of a particular kind of post-Cold War politician: devoted to making serious petro-money while serving as living proof for Putin’s claim, unfailingly delivered with a smirk, that the West is hypocritical – and, by implication, no less corrupt than his own regime. The war on Ukraine has made it clear to everyone that something has gone wrong in the decades since the fall of the Wall. But it’s the German model of politics in particular – hard-nosed pursuit of economic advantage combined with high-minded moralising – that faces a fundamental reckoning.

Since leaving office Schröder has presented an almost cartoonish image of a sell-out, not untypical for 1990s promoters of the Third Way. But he is also a tragic example of an old-style social democratic success story gone awry. Brought up by his mother (his father was killed in Romania by the advancing Red Army), he worked his way out of hardship and became a self-described ‘consistent Marxist’ in his early political career. He was elected to the Bundestag in 1980 and is said to have stood outside the Chancellery in Bonn one night after a lengthy visit to a local pub, shaking the fence and shouting: ‘I want to get in here!’ He eventually did, having made social democracy safe for neoliberalism by reinventing himself as the ‘Genosse der Bosse’ – comrade of the capitalists.

Schröder adopted a nouveau riche style that broke with the self-conscious modesty of the old West Germany, posing in Brioni suits, cigar in hand. After his narrow defeat by Merkel in 2005, he announced in characteristically macho manner on live TV – with Merkel looking on stoically – that he would remain as chancellor (many observers assumed he must have had a drink or two before the broadcast). Instead, with unseemly haste, he took up Putin’s invitation to chair the Nord Stream 2 committee, established to create a gas pipeline that would connect Russia and Germany directly across the Baltic Sea. Even after the resignation of his personal staff earlier this year over his refusal to step down from lucrative Russian positions, Schröder ostentatiously continued his bromance with Putin – apparently delighting in defying a political class which, to his mind, has never recognised the achievements of the last working-class chancellor.

Schröder’s obstinacy is so outrageous that it has not only conveniently distracted attention from fellow Third Way profiteers such as Clinton and Blair (who helped secure Western approval for Nursultan Nazarbayev’s Kazakh Potemkin democracy), but has also taken the spotlight off the other Social Democrats who made up the ‘Hanover connection’: Sigmar Gabriel, former minister of the economy, and Frank-Walter Steinmeier, once Schröder’s chief of staff and now Germany’s president. Steinmeier has been fiercely criticised by Ukraine’s media-savvy ambassador to Berlin, Andriy Melnyk, who accuses him of cosying up to Putin just like his former boss. On 12 April, the day before he was due to arrive in Kyiv, Steinmeier was disinvited by President Zelensky: an unprecedented affront which Chancellor Olaf Scholz – another Social Democrat – called an insult not just to the head of state but to the German nation.

It’s true that many on the centre left, especially those from the former East Germany, combine a sentimental view of Russia with guilt over the Second World War (where the Soviet Union is always reduced to Russia) as well as an instinctive anti-Americanism: Manuela Schwesig, a rising centre-left star and leader of the north-eastern state of Mecklenburg-Vorpommern, has been relentless in her promotion of Nord Stream 2, which makes landfall in her state, and spoke out against ‘American fracking gas, which serves the interests of the US’. (Whose interests did she think Putin’s gas was serving?) In 2021 she set up the Climate and Environment Protection Foundation, which, it turned out, was largely financed by Gazprom, evidently as a means of escaping American sanctions on the ill-fated pipeline.

Social Democrats of this type share a long-standing tendency, going back at least to Egon Bahr, architect of Willy Brandt’s Ostpolitik in the late 1960s, and Helmut Schmidt. They treat voices from the lands between Germany and Russia as at best annoying distractions from the world-historical imperatives of detente and international friendship among great powers. They dismissed Poland’s Solidarity in the early 1980s, and in more recent years have waved away Eastern European critics of Nord Stream as pathological Russophobes. The pushback against this tendency has sometimes been too fixated on one side of the German political spectrum. A prominent Polish leftist, Sławomir Sierakowski, recently let it be known that a tradition extended from Hitler’s quest for Lebensraum to Ostpolitik, despite the fact that Ostpolitik was aimed at improving the lives of ordinary citizens by making it easier, at least for some, to communicate across the Iron Curtain, and even to travel. It also helped build the mutual trust without which neither Germany nor Europe could ever have been unified. Little of the sort can be said for the strategy of Wandel durch Handel – transformations through trade – over the past twenty years. If anything, making Europe dependent on Russian oil and gas has led to only one transformation: that of Russia into an authoritarian kleptocracy wrapped in neo-imperialist ideology.

It’s not only the left that is to blame. Christoph Heusgen, Merkel’s most trusted political adviser, is said to have begged her to back away from Nord Stream 2. But she obeyed the representatives of German industry who couldn’t get enough of cheap Russian gas. During the Trump years Merkel was often celebrated as the new ‘leader of the free world’. But her record is much murkier: she started out as a politician stressing her first-hand experience of living under totalitarianism, ready to confront Russia and China on human rights; she ended as a servant of Germany Inc., fuelled by cheap energy from one autocracy and profiting from high-end exports to another.

Nowhere was her ambivalent role more visible than in the political protection Merkel extended to Viktor Orbán for a decade or so. After winning an overwhelming parliamentary majority in 2010, Orbán set about creating a ‘system of national co-operation’. This meant packing the judiciary and the state apparatus with loyalists; restructuring the electoral system to benefit his party, Fidesz; writing a new constitution approved by Fidesz alone; and, not least, ensuring that media companies were acquired by oligarchs allied with his regime. None of this went unnoticed: the European Commission tried to resist the transformation of an EU member state into a soft autocracy by taking Hungary to court for infringing European law. After all, the commission is meant to be the ‘guardian of the treaties’ – and the treaties say that only democracies respecting the rule of law can be part of the European club.

Yet Orbán managed to get his way. He gained time by confusing international observers through selective exercises in comparative constitutionalism, arguing that the new institutional arrangements were benign since they already existed in other democracies. He built what the sociologist Kim Lane Scheppele has called a ‘Frankenstate’: Orbán’s new body politic was assembled from recognisable liberal-democratic elements, and yet, when combined in a particular way, these parts have amounted to a system in which the transfer of power has become all but impossible.

While this was happening, European leaders were busy spending political capital on the Eurocrisis. Brussels already appeared to be dictating to national capitals what kinds of budget they could pass; it seemed inconceivable that it would also start giving failing grades to political systems. Apart from the cover provided by monetary-cum-fiscal crisis, Orbán had a form of political insurance through Fidesz’s membership of the European People’s Party, the largest supranational party family, which brings together Christian Democrats and conservatives. One consequence of the European Parliament’s growing powers over the years is that incentives to discipline individual parties for infractions of democracy have diminished: once, the EPP would have found it easy to expel Fidesz, but in recent years it has mattered a great deal whose party group is the largest in Brussels and Strasbourg – so Fidesz, with its large number of MEPs, has had serious leverage.

Orbán saw he could use that leverage to get away with almost anything. He expelled the Central European University from Hungary and launched hate campaigns against George Soros and refugees and eventually Brussels itself. Hungarian highways, built with EU money, were dotted with billboards that read ‘Let’s Stop Brussels’. Merkel’s Christian Democrats gestured at ‘red lines’ – and Orbán crossed them with impunity. He could do it because while talking the talk of anti-neoliberal populism – describing himself as a ‘plebeian’ in contrast to the supposed Budapest bourgeois elite and the ‘liberal nihilists’ running Brussels – he assiduously courted German companies, with car manufacturers in effect receiving subsidies from the Hungarian taxpayer. In what the political scientist Dan Kelemen has called an ‘Audicracy’, the heads of these multinationals are said to be welcome to call the foreign minister on his mobile.

While Brussels was prepared to allow a single autocracy to exist as an exception within the realm, it turned out that Orbán’s approach had set a precedent. Poland’s ruling populists promised to create ‘Budapest in Warsaw’; in Slovenia, Janez Janša followed Orbán’s far-right playbook. Measures that might have been taken against one rogue member state were off the table as soon as a second, copycat populist government was willing to veto them. At the same time, the EU kept pumping subsidies into states whose leaders equated Brussels with the Soviet Union. By giving them free money – money that keeps cronies happy and buys political support – the EU was now effectively consolidating the rule of enemies to its liberal order. What oil and gas are for Arab dictatorships (and of course for Putin), EU funds are for aspiring authoritarians inside the union.

Orbán was copying Putin in more than one way. He harassed NGOs, took control of state television and local news (while tolerating a few opposition outlets for the sake of plausible deniability) and launched a campaign of anti-liberal culture warfare designed to appeal to gullible conservatives around the globe as well as to clear-eyed conservatives prepared to sacrifice democracy for the sake of winning the war against ‘gender ideology’. He was also consolidating an actual alliance with Putin: Budapest commissioned the Russian state company Rosatom to enlarge Hungary’s only nuclear power plant, conveniently financed with a €10 billion loan from the Russian treasury.

The price of such dependencies became clear this spring. Orbán refused to allow weapons to Ukraine to be shipped through Hungary. State TV channels churned out pro-Russian propaganda. Budapest kept vetoing the proposed cessation of Russian oil imports to the EU – in Dmitry Medvedev’s words, a ‘courageous step for silent Europe’. In the run-up to April’s parliamentary elections Fidesz falsely framed the main opposition candidate, Péter Márki-Zay, as itching to send Hungarians to get killed in Ukraine. Orbán, self-declared defender of ‘peace and security’, is also in a position to veto Finland or Sweden joining Nato, or any similar measure that might cause displeasure in Moscow.

Last​ month Orbán won his fourth consecutive two-thirds majority in parliament. The election was considered free – i.e. no evidence of ballot-stuffing on the day – but deeply unfair: state resources were ruthlessly deployed on behalf of the governing party and Márki-Zay was granted only five minutes on state TV during the entire campaign. Gerrymandering and massive votes for Fidesz by newly enfranchised ethnic Hungarians in Romania and Serbia (while voting was made as difficult as possible for Hungarians in Western Europe and North America) also helped. Even so, not all has gone smoothly: the EPP has finally parted ways with Fidesz after the majority of its members moved to oust the party; and Orbán’s grander vision of an anti-liberal Visegrád bloc inside the EU has failed for the moment. Right-wing populists have lost power in Slovakia (2020) and the Czech Republic (2021), and while Jarosław Kaczyński remains busy creating Budapest in Warsaw, he is noticeably cooler towards Budapest in Budapest. After years of delay – but now with Merkel out of the way – the EU has finally started a process to cut subsidies to its self-declared enemy on the Danube. The commission accuses Hungary of ‘breaching the rule of law’; what Brussels really means is fraud and corruption in the use of EU money. Meanwhile, the €10.7 million loan from a Hungarian bank to Marine Le Pen’s Rassemblement National turned out to be a bad investment (for good measure, Orbán also rolled out the red carpet for Éric Zemmour when he visited Budapest in September).

But the fact that Le Pen received more than 40 per cent of the vote in the second round of the French presidential election shows that proximity to Putin doesn’t have to mean political death in today’s Europe. One might have thought otherwise after Matteo Salvini’s recent humiliation on a visit to Poland: a town mayor presented him with a Putin T-shirt of the kind he had once been photographed wearing in Moscow, causing Italian journalists in the audience to taunt him with shouts of ‘Buffone!’ Macron tried to capitalise on a previous Russian loan to Le Pen by hurling a line at her during a TV debate: ‘When you speak to Russia … you are talking to your banker.’ Le Pen, while still opposing sanctions against Russia, quickly pivoted to the cost of living as the major issue of her campaign.

This may set a precedent for the way the war in Ukraine translates into domestic politics in Europe. Even if parties are united in their condemnation of the invasion, this does not – and should not – end challenges to government policies by opposition parties. The temptation to go easy on Russia will remain. After all, everyone has their reasons: the far right still loves Putin’s supposed defence of traditional values; the far left can’t resist whataboutism (‘What about Iraq?’). Those who use the turn against Russian gas to further their campaign against fossil fuel dependency in general – i.e. the Greens – can be dismissed as bobos who don’t understand the concerns of a gilets jaunes-style constituency more worried about the end of the month than the end of the world.

In Germany, the Christian Democrats – forgetting Merkel’s complicity in Putin’s and Orbán’s successes – are blaming the Social Democrats for being soft on Russia. And even Scholz’s own coalition partners, the Greens and centre-right liberals, are complaining that the chancellor hesitated for too long before finally agreeing to supply heavy weapons to Ukraine (apparently seven howitzers so far). Both Scholz and Macron are being outpaced by the European Commission in its eagerness to include Ukraine in the European club. The commission had largely been sidelined during the Eurocrisis. But now, after a number of years in the shadow of Merkel and Macron, Ursula von der Leyen (also from Hanover, incidentally, though from a Christian Democratic dynasty) appears ready to assert herself.

Von der Leyen’s prominent role on the European stage distracts from the fact that Modell Deutschland is still only tentatively being questioned. It has roughly conformed to the caricature of liberalism which the German jurist and sometime Nazi Carl Schmitt painted in the interwar period: liberals, Schmitt charged, clung to the illusion that all conflicts could be made to disappear through economics or ethics. Potential antagonists could either find common ground through shared material interests, or deliberate among themselves until a moral solution acceptable to all was found. During Merkel’s long reign, this translated into the economic reality of German business relying on cheap Russian gas to produce exports for China. It also meant an ethical order in which German governments could lecture southern Europeans on the morality of thriftiness and the categorical imperative of structural adjustment.

This should be the hour of structural adjustment for Germany, and what has been called its ideology of Exportismus. It should also be the hour of some humility. Instead, a group of intellectuals – writers, comedians, professors – have published an ‘open letter’ to Scholz imploring him not to provide tanks to Ukraine. Their argument rests on what they call ‘moral norms with universal application’; they claim that the number of civilian casualties might be so high that it would be unethical for Kyiv to continue fighting. Driven in part by fear of nuclear confrontation, they are asking Ukrainians to capitulate at what a group of intellectuals – 1200 kilometres away – deems the morally appropriate point in time. Neither the right to self-defence nor the dangers of letting an autocrat get away with blackmail figure in the calculations of those seeking to hold on to what they call a seventy-year ‘European peace narrative’ that conveniently forgets about Srebrenica. They believe that a leader bent on annihilating a neighbour must be given the opportunity to save face and sell a compromise at home – which hardly squares with Moscow’s complete crackdown on opposition. In the end, they give no reason to think that Putin’s balalaika would play what their guitar wants to say.

Scholz has come up with the term Zeitenwende to describe this moment of historical rupture. Wende – ‘turn’ – was also the word used to describe regime change in East Germany in 1989. Many who brought about that change judged it a dubious expression: rather than revolution by courageous citizens (with a little help from Gorbachev), it suggested the reign of impersonal forces. The same implication – historical trends not political decisions by individuals – comes with Zeitenwende. It’s telling that one of the professors criticising the government for sleepwalking into global war uses abstractions like Gewaltprozess – a ‘process of violence’. Such language betrays a desire not to be held responsible, or better still just to be left alone, while clinging to a sense of moral superiority: in a recent TV encounter, the same professor told the Ukrainian ambassador that the Germans know best because they had been sensitised to the horrors of war through their own family histories. Everyone has their reasons.