Olaf Scholz’s untested administration faces busy new year

When chancellor Olaf Scholz took his oath of office a month ago in the Bundestag, he dropped the usual “so help me God” reference.

On Thursday, though, he seemed delighted to accept the traditional Epiphany blessing from visiting German teenagers dressed as the three wise men.

The visitors chalked their blessing on the chancellery wall – 20*C+M+B+22 – and told Germany’s non-religious new leader: “Have courage, be full of hope, you are not alone, God will be with you every day of the year.”

Given his sagging in-tray, Scholz will need all the help he can get in his first year in office. In his first televised new year’s address, he admitted that two years of burdensome pandemic restrictions were, by now, lodged “deep in our bones”.

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That didn’t stop Scholz announcing new restrictions on Friday to slow the Omicron variant’s spread, requiring a negative test in addition to a vaccination certificate for all restaurant and bar visits.

Beyond the pandemic, the Social Democrat (SPD) leader said the Russian troop build-up on the Ukrainian border was alarming and that “the inviolability of national borders is . . . non-negotiable”.

Rapprochement

Half a century ago his SPD idol Willy Brandt pushed pragmatic rapprochement towards the Soviet Union. Today, leading German diplomats and foreign policy experts recommend Berlin adopt a two-pronged approach with Moscow: back a show of deterrence through military strength, matched with quiet German diplomacy to maximise dialogue.

“Germany cannot stand on the sideline of this pitch,” argued Wolfgang Ischinger, a former leading German diplomat and head of the Munich Security Conference. “It must be a central task of German foreign policy to work towards . . . not security from Russia but security with Russia. We have a huge task ahead of us.”

This year’s Munich conference at the end of February will be a key opportunity for Berlin’s new government to prove wrong critics who attacked Merkel-era policy towards Russia as appeasement.

Central to this claim is the 1,200km-long dilemma named NordStream 2, an undersea pipeline bringing Russian gas directly to Germany.

Later this month, a German government agency will decide on an operational permit for the completed pipeline. Berlin insists it will stay out of that decision, but its claims that the Gazprom-led project is a private, non-political endeavour are wearing thin with its eastern neighbours – and the US government.

Consequences

In Washington this week, Germany’s new Green foreign minister, Annalena Baerbock, warned Moscow of “enormous diplomatic and economic consequences” over its standoff with Ukraine.

But Germany’s ongoing refusal to provide weapons and other military assistance to Kiev prompted US secretary of state Anthony Blinken to say he found it “very difficult to imagine” gas flowing through Nordstream pipeline “if Russia renews its aggression against Ukraine”.

Ahead of a looming Biden-Putin meeting, Scholz officials are seeking a meeting with the Russian president. They have also made clear that this delicate matter is chancellor territory – a clear signal to his more Moscow-critical Green cabinet ministers.

Beyond gas, Germany’s unanswered energy supply and climate questions have handed Berlin its first row with Brussels. With its last nuclear plants scheduled to close this year, as part of Germany’s renewable energy push, Baerbock and her Green co-leader Robert Habeck, federal economics minister, have attacked a European Commission proposal to label nuclear energy a sustainable energy source.

Unresolved challenges – Covid-19, climate and China – will dominate Berlin’s G7 presidency this year. Germany has promised to keep pushing for greater global distribution of Covid-19 vaccines – Germany is the second-largest donor in the Covax vaccination alliance – and to press China on climate change.

‘Foreign policy dilemma’

“Co-operation is the top priority in diplomacy, but it must be on the basis of human rights and in compliance with international treaties,” said Baerbock, but she admitted that this is increasingly a “foreign policy dilemma”.

Dilemmas abound on the domestic and EU agenda of Germany’s untested three-way coalition, in particular how to invest in the green transformation of Europe’s largest economy without fresh borrowing or higher taxes.

Berlin’s EU neighbours are curious to know just how much post-pandemic flexibility they can expect, on EU investment and euro rules, from Berlin’s hawkish new finance minister, Christian Lindner.

The first rays of enlightenment may come on Monday when the German finance minister hosts his Irish counterpart, Paschal Donohoe, wearing his second hat as head of the Eurogroup.