Germany’s Gamble: The Ostpolitik Putin Policy and Why It Backfired

In the wake of Russia’s annexation of Crimea in 2014, Europe was outraged. Sanctions were imposed, and Russia’s economy was hit, but Putin’s popularity soared. Germany, however, sought to refresh the relationship, forgiving if not forgetting, and embarked on a modern-day version of Ostpolitik.

The Nord Stream 2 Pipeline

The Nord Stream 1 pipeline had been delivering cheap gas to Germany for years, and planning for Nord Stream 2 began in 2011. Despite the annexation of Crimea, construction resumed in 2018. Critics, including U.S. President Donald Trump, were vocal, but German Chancellor Angela Merkel was undeterred.

This was seen as a continuation of West Germany’s successful re-engagement with Eastern Europe under Willie Brandt, which had earned him a Nobel Peace Prize. The idea was that the relationship with Russia would give Moscow a stake in good European relations, and Germany would have the leverage to force Putin to negotiate peace with his neighbors.

The Failure of Economic Interdependence

Fast forward to February 24th, 2022, Russia invaded Ukraine, and the whole theory aged like milk. But was Germany’s policy ridiculous? The answer is more complex.

Economic interdependence is one of the oldest theories in international relations. The basic idea is that states that trade together stay together. If each has something the other can’t make, they trade, and everybody wins. If there’s a diplomatic fallout, both sides have strong incentives to work out their differences.

But the logic can fail. The key question is which effect dominates. If both parties grow as the costs of conflict increase, who gains more coercive power? The problem with this line of thinking is that we often only look at one half of the equation.

The Complexities of Bargaining

International bargaining is not always a frictionless vacuum. We must consider how resolved states are, how much they care about abstract issues like freedom versus money and human life.

Russia may have preferred to attempt to implement a more aggressive policy, even though Germany would have pushed back with sanctions. The difference between the two possible limit lines, called a peace premium, is critical. As the difference increases, Russia becomes more inclined to take risks.

Economic interdependence can be really bad for peace. In this case, the Russian incentive to make aggressive demands outweighs its own higher cost if the initial cost of conflict skews more toward Russia and the new benefits of trade skew more toward Germany.

The Jury is Still Out

Are these two conditions true here? The jury is still out. Germany initially responded to the invasion by binge buying Russian natural gas before Russia started cutting off Nord Stream purchases. Solving the mystery of the Nord Stream sabotage might help, but that has been a struggle.

Conclusion

Germany’s gamble with the Ostpolitik Putin policy was a complex and nuanced attempt to leverage economic interdependence to foster peace. While it may seem to have backfired, the underlying principles and the subtleties of international bargaining make it a subject worthy of careful consideration.

The failure of this policy serves as a reminder that international relations are not always as straightforward as they seem. Economic interdependence, while a powerful tool, is not a panacea. The complexities of human behavior, national interests, and global politics often defy simple solutions.