The war in Ukraine has affected the German economy like other major economies of the world but the situation is expected to worsen in the coming months as the energy sector is facing a crunch, said a leading German historian of modern industry and economy. In an exclusive interview with The Hindu, Berlin-based Dr. Stefan Tetzlaff, who has been advising opposition Christian Democratic Union (CDU) MP Henning Rehbaum said that the energy crisis is an opportunity for innovation for new technology but reminded on a pragmatic note, that the CDU supports "continued use of energy from Russia as long as there are no workable alternatives".
"The war in Ukraine, inflation and global trade issues like supply chain problems have impacted countries across the world in different ways. The German economy so far is better off than many other economies, but the worst is yet to come. Gas shortages in the winter months are projected to hurt industries and private consumers in Germany," said Mr. Tetzlaff.
The war in Ukraine confronted Germany with a problem as it had to take a call on the consensus politics over energy relations with Russia that had progressively become a part of both the SPD Chancellor Gerhard Schroder and CDU Chancellor Angela Merkel’s governments. This continuity was expected to be upheld even as Germany voted for a new coalition government under Social Democratic Party (SPD)'s Chancellor Olaf Scholz following the exit of Ms. Merkel who had a stint from 2005-2021.
However, the war that erupted on February 24 "has turned much of this understanding (consensus) on its head", said Mr. Tetzlaff. He said that the Germany-Russia partnership grew during the Shroder-Merkel years as Berlin felt attracted to the "Russian gas as a cheap alternative to other energy sources." But in 2022, the war in Ukraine has highlighted Germany's security concerns over its energy or economic links with Russia.
The growing security concerns of Germany after the beginning of the Russian campaign reflected on the victory that the CDU achieved in May in the Schleswig-Holstein state election. The victory of the centre-right party was seen as a response to Chancellor Scholz's handling of the Ukraine crisis. The ruling SPD came third after the Greens and CDU in the Schleswig-Holstein election. "Today, 7 months into the Ukraine conflict, we speak from an entirely different standpoint. Now Germany and the EU are increasingly aware that Russia uses energy dependency and other trade matters in coercive ways, trying to push EU countries to the brink of social disharmony and collapse," Dr. Tetzlaff said.
The German historian and policy advisor pointed out that apart from the growing realisation about Russia's economic and energy tactics, CDU continues to have a strand of pragmatism that had become prominent, especially during the Merkel era. For example, CDU supports economic sanctions on Russia, said Mr. Tetzlaff but he added, "CDU Chairman Friedrich Merz has been very clear that Germany and Europe should not forever shut off a country like Russia with a population of 140 million people from Europe. There will have to be some form of exchange again, but the war in Ukraine has to stop first."
CDU, Dr. Tetzlaff says is stressing “pragmatic, market-friendly and technology open approaches in energy, transport and industry sectors.” In other words, Germany’s world-famous large corporations as well as its emerging SMEs need to “expand their economic relations with new partners around the world to keep up market shares and growth potential”.
“The CDU would certainly encourage Germany and India to negotiate on these aspects and foster new initiatives,” said Dr. Tetzlaff.
