A New Era in German Defense and Foreign Policy: The Source of Broadening Relations in the Gulf?

German Chancellor Olaf Scholz addressed an extraordinary session of the Bundestag (lower house of the German parliament) on 27th February. In what could be considered a landmark speech in response to Russian President Vladimir Putin’s actions in Ukraine, he pledged the country to pay 100 billion euros (about $113 billion) special fund modernize the military, increase defense spending to 2% of gross domestic product to fulfill its commitment to NATOand build quickly two liquefied natural gas terminals. The Chancellor also pledged to send arms to Ukraine, an active war zone, contrary to previous German policy. German Foreign Minister Annalena Baerbock said during the same Event that, “If our world is different, then our politics must be different too.”

However, there are still some outstanding questions that could have an impact on the reorientation of German foreign policy. First, will Russia cut gas supplies from Nord Stream, which were supposed to maintain stable relationships with the Kremlin in the post-Cold War order but, together with international sales of Russian oil, helped it amass gold and currency reserves of $635 billion. These funds will likely be used to help Russia withstand the pressure of large and growing economic sanctions. Although Germany suspended Nord Stream 2, whose operator filed for bankruptcy, it still needs Russian gas in the short term, because gas is not as fungible as oil. The most likely scenario involves a reduction of the Nord Stream pipeline, as well as maximizing the growth of wind power and switching to balanced domestic heat pumps with hydrogen to respond to seasonality.

Second, will Germany free itself of debt relief (the rule, introduced in 2009 and enshrined in the German Constitution, to limit government borrowing to 0.35% of GDP). This probably will not be processed before 2023 since the rule was already suspended until then due to the economic impact of the coronavirus pandemic. Removing the debt rule could improve Germany’s budget and spending and increase influence in select policy areas, while reinforcing future economic vulnerabilities that last emerged in the 2009 debt crisis. these additional revisions are implemented, they will represent the rollback of several decades. -former policy of the centre-left Social Democratic Party.

The U-turn on military funding alone is truly remarkable from a traffic light coalition of the Social Democratic Party (red), Liberal Democratic Party (yellow) and Alliance 90/Greens. This is a significant departure from Germany’s primarily economic and integrated role in the European Union, and it will give Germany a greater voice on a wider range of issues in international affairs. With higher military spending, Germany could lead by example and encourage other EU and NATO allies to adopt a similar policy.

German policy in the Gulf

In the Middle East, Germany has been able to take advantage of its close relations with Iran, originally developed when it was a great power in the 19th century, and with Israel, developed as part of its policy of reconciliation. since the end of World War II. Bilateral relations with Iran have been particularly useful in supporting the E3 (Germany, France and UK) dialogue with Iran for the negotiation of the Joint Comprehensive Plan of Action nuclear agreement and within the framework of the E4 with Italy alongside Iran regarding Yemen.

Germany’s economic relations with the states of the Gulf Cooperation Council have been dominated by the negotiations of the EU-GCC free trade agreement, which was launched in 1990, supported by developments such as the single market European Union in 1992 and the launch of an EU common foreign and security policy in 1993. However, the negotiations did not really develop until after the creation of the GCC customs union in 2003. The talks ended in 2008 without resolution primarily due to disagreement over export duties. A joint action program, which was to expand cooperation in 14 key strategic areas, including economic issues, energy and nuclear safety, was launched from 2010 to 2013 but was not renewed. In 2017, a more formal EU-GCC dialogue on trade and investment was launched. The EU is the Gulf region’s second largest trading partner after China, with trade in goods amounting to 97.1 billion euros (about 108 billion dollars) in 2020.

Germany’s largest trading partner in the Gulf region is the United Arab Emirates, followed by Saudi Arabia. These two Gulf States have implemented “vision” strategies for economic diversification, which could provide opportunities for cooperation in areas such as healthcare, education, infrastructure and renewable energy. Although German investment has been lacking in the region, the German government and utilities have intensified their cooperation with Saudi Arabiathe United Arab Emiratesand Oman on green hydrogen projects since 2021. Even though oil and gas companies have greater access to gigawatt-scale hydrogen projects, many other states are getting into the space. Qatar offers potential as a long-term gas supplier, although the UK has also adopted this strategy in response to natural gas shortages in Europe. With Qatar recently designated as a major non-NATO ally, closer cooperation between Germany and Qatar makes some sense. Another logical step would be for Germany to establish energy relations with Iran, which shares the South Pars/North Dome gas condensate field with Qatar. This would depend on the US and Iran returning to the JCPOA, but is not without geopolitical exposure and risk, including close relations between Russia and Iran.

Trade between Germany and the United Arab Emirates represented a modest 7.5 billion euros in 2020 (approximately $8.3 billion), which was greater than France-UAE trade (without arms sales) around the same time. But France, like the United States, the United Kingdom, and increasingly Russia and China, maintains a more strategic dimension through arms transfers, which boost its total trade with the United Arab Emirates. . (French arms sales to the UAE in 2019 were valued at 8.3 billion eurosand France sold 80 Rafale fighter jets to the United Arab Emirates in 2021 in a record A 14 billion euro deal.) A principled German approach to arms exports contrasts with many other states that attach fewer or no conditions to their foreign relations. Surprisingly, President Emmanuel Macron called Chancellor Angela Merkel’s stance on arms exports after the murder of Saudi journalist Jamal Khashoggi “sheer demagogueryand sought to gain a competitive edge by being one of the first Western leaders to visit the kingdom in his wake. France is also investing in more cultural cooperation, incorporating outposts such as a Sorbonne University campus and a Louvre-branded museum, as well as a permanent military base in Abu Dhabi. This is part of the UAE’s hedging strategy: a national security or alignment strategy featuring protection-oriented ties with friendly powers.

At the political level, after former German Foreign Minister Sigmar Gabriel made a remark about Saudi adventurism in the Middle East (i.e. in Lebanon vis-à-vis the detention of the former Lebanese Prime Minister Saad Hariri and his actions in Yemen), the kingdom withdrew its ambassador to Germany and denied accreditation to the German ambassador. German exports to the kingdom thereafter fall 5% in the first half of 2018 before the commentary fallout was contained later that year. If Germany chooses to build its relationship in the GCC by changing its arms export policy, it would no doubt be welcomed by those states willing to diversify their defense arrangements and pursue more joint ventures. Nevertheless, Germany may continue to experience previously unforeseen political issues that impact its relationship with one or more GCC countries. The lesson relatives between the United Arab Emirates and Russia contrasts sharply with those between NATO states and Russia. It is also difficult to see the German-Saudi military cooperation if the joint Russian-Saudi military cooperation were to remain in place. Other opportunities or obstacles to cooperation could materialize as GCC states try to balance, to varying degrees, between the United States, Russia and China.

The role of the United States in German Gulf policy

The United States has played a decisive role for several decades in shaping German relations in the Gulf. Former US Secretary of State James Baker requested German talks to support Saudi Arabia in the Gulf War, which then-Chancellor Helmut Kohl agreed to. While Germany refused to join the US-led coalition in Iraq, then-Chancellor Gerhard Schroder visited the Gulf in 2003 and decided to work with the United Arab Emirates to train police and the Iraqi military, in part to maintain cordial relations with Washington. Germany supported the US-led Combined Joint Task Force – Operation Inherent Resolve against Islamic State in Iraq and the Levant in a non-combat role and was active in the Global Coalition against Islamic State focused on diplomacy. The United States will no doubt welcome the metamorphosis of a key European ally in countering regional threats and strengthening the NATO alliance.

A new competitive advantage?

Germany has lacked traction with the GCC states economically, politically and strategically. Distractions such as the 2009 debt crisis, the 2015 migrant crisis, the coronavirus pandemic, and a new coalition in the German government, formed after the December 2021 federal election, have all diverted German attention from the Gulf. The Ukraine crisis has come to dominate and unite decision-making in Berlin, but still under a European security rubric. German military influence is set to grow within the EU/NATO multilateral framework, and although its policies in the Gulf will continue to be shaped by its energy policy, US policy and other geostrategic considerations, these factors, combined with more investment, could possibly give Germany a more competitive advantage over competing EU countries in its relations with certain Gulf countries.

James R. Rhodes