"Russia will be weaker, the West re-invigorated" - Ischinger interview with 'Top of Mind'
"The Snowden-NSA scandal, which precipitated a deep crisis of trust among trans-Atlantic partners, has almost completely disappeared from the front pages, practically overnight. US and EU leaders are now talking to each other as close partners again. Russia will be weaker, the West will be re-invigorated," Wolfgang Ischinger said in an interview with Goldman Sachs' publication "Top of Mind."
Allison Nathan: Were you surprised by the recent Russian actions in Ukraine?
Wolfgang Ischinger: We have had a trust problem between NATO and Russia for a long time. The first climax of mistrust occurred during the Kosovo crisis at the end of the 1990s. This lack of trust is one of the causes of the current crisis in Ukraine. But, was I surprised? Yes, I was. I would not have thought that Russia would find it necessary and in its interest to break international law in such a blatant way.
Allison Nathan: Is this conflict still within the "normal" behavior of Russian power play or are we seeing a new level of assertiveness?
Wolfgang Ischinger: Russian behavior in the Ukrainian crisis over Crimea has certainly not been within normal behavior of Russia. We are seeing an assertiveness that is significantly stronger than expected. Why? This is not a sign of Russian strength or self-confidence, but rather a sign of increasing Russian weakness. After the departure of Ukrainian President Yanukovych, Russia was afraid that they would lose influence over Ukraine. In order to keep their finger in the pie of Ukrainian business - so to speak - they acted in Crimea.
Allison Nathan: Could the West have done anything differently to avoid the current crisis?
Wolfgang Ischinger: In a way, yes. Almost 20 years ago former Russian President Gorbachev spoke of the common home for all of Europe where each country would have a room, allowing all countries to live together in peace and harmony with each other. We have clearly failed to construct the kind of European security architecture that would have given Russia and also Ukraine a room in a home with one common roof over it. That is not something which the West could have produced alone. Russia refused to accept many good initiatives that came from a number of European and NATO countries in the past. But let’s remember that Russia used to be a global power second only to the United States and has felt for several years that its power was in decline, that the respect it was getting from Washington and from others was decreasing, and that NATO was moving closer. The West has not sufficiently tailored its own behavior in a way that would lead Russia to think anything different. Of course, psychology can neither justify nor excuse bad Russian behavior, but it can help explain the new assertiveness that President Putin has been demonstrating, beginning as long as six years ago during the Georgian crisis and taking it to a new level in Ukraine.
Allison Nathan: What has been behind Chancellor Merkel’s somewhat surprising hardline against Putin here and do you agree with it?
Wolfgang Ischinger: It has been suggested that Chancellor Merkel’s past – growing up in East Germany – played a role in the hard line she is now taking against President Putin. I do not think that her personal history has much to do with the current policy approach. Chancellor Merkel knows that if she simply followed the interests of Germany and the German business community, we would risk to divide Europe, because our friends to the East are much more worried about the current situation. That is why she decided that, in order for the European Union to speak with one voice, she needed to behave as if she were not just the Chancellor of Germany but as if she were the Chancellor of the entire EU, taking into account the worries and fears of the EU’s Central and Eastern European constituents. What really matters here is that we do not allow President Putin to split the EU.
Allison Nathan: How does the German business community feel about this?
Wolfgang Ischinger: Interestingly enough, the German business community goes along, even though many business leaders are obviously worried about their businesses and investments in Russia. They have accepted the fact that in this situation the ability of the EU to speak with one voice is key. And sanctions have been exactly what the doctor ordered - not too much, not too little, just right. One should also not exaggerate the importance of German-Russian business relations; only 3% of Germany’s exports go to Russia. So even if we had to impose stronger sanctions against Russia, Germany would not suffer intolerably.
Allison Nathan: Should Russia be fearful?
Wolfgang Ischinger: Yes. President Putin appears to have miscalculated the consequences of his decisions for the Russian economy. There are essentially two kinds of leaders in the world: One category looks at the glorious past and tries to resurrect it. That is what President Putin is apparently trying to do at the moment. The other kind of leader does not look back at what was, but accepts what is and builds on that for the future. A good example of that kind of leader is Lee Kuan Yew, who built Singapore from a swamp town into one of the world’s biggest and most prosperous trading hubs. I can even go a step further in this comparison; if my own country, Germany, had continued after World War Two to look back at what was, we would not have obtained reunification 20 years ago. We would still be quarreling with France over Alsace-Lorraine, and we would still have a conflict with Poland over Silesia. Instead, without forgetting our terrible past, we learned to build a new future, based on trust and cooperation with our neighbors, and that is how we created a peaceful Europe, and how we became champions of prosperity in Europe. President Putin is not putting his country's energy to the best use by trying to rebuild the past. He is ignoring opportunities to diversify and modernize his country, which today essentially relies on revenue from oil and gas exports. For that diversification he would need to attract a lot more foreign investment. The annexation of Crimea will turn out to be a big obstacle to the kind of economic development that Russia desperately needs.
Allison Nathan: What should the West do now?
Wolfgang Ischinger: We need a long-term strategy. We should not treat the Russian leadership as if we were dealing with the Soviet Union. We are not in a new cold war. Our strategy should not be based on maximizing punishment of Russia. Our strategy should instead be to maximize the support that we can give to Ukraine. If we manage to stabilize Ukraine, to turn it into a functioning, unified, and prosperous nation, we will have won and not Russia. Actively supporting Ukraine is the best way to deny Russia opportunities to divide Europe and to exploit ethnic tensions. This is why we should not lose a single day in putting together a comprehensive support package that covers political, social, economic, financial, and strategic aspects of Ukraine. Yes: this will be costly; not everybody will like the idea that we will be spending billions on Ukraine. But this investment is very much in the strategic interest of the entire international community and certainly in the interest of a stable and prosperous Europe.
Allison Nathan: What role should NATO play?
Wolfgang Ischinger: NATO needs to make clear that it is capable and willing to protect its members against any outside threat. What NATO should not do at this moment is to engage in activities that could be interpreted by the Russian side as military escalation. We should think twice before deploying additional ground troops to Eastern Europe at this moment. That would only provoke Russian generals to respond in kind, and the result would be a more dangerous situation, not a de-escalation. We need to walk a very thin line, but I believe so far we have not made serious mistakes.
Allison Nathan: How concerned are you that the situation can escalate or get out of control, maybe even by accident, as has happened in the past?
Wolfgang Ischinger: The risk is significant. Troop concentrations on both sides of the Ukrainian border could aggravate the tense situation. I do not remember a graver danger to peace and security in Europe in 15 years. But I also believe that Russia is not interested in further escalation. I believe that the Russian strategy aims to maintain influence in Ukraine, and to keep Ukraine out of NATO, not to wage a war over Ukraine.
Allison Nathan: Is there any hope left for cooperation between Europe and the East?
Wolfgang Ischinger: Yes. First, cooperation on Iran, for example, is continuing. And second, Russia has no other good option for its economic and political future than to work closely with the European Union, the only stable partner it has. We will find a way to get back to normal, but it may take a while.
Allison Nathan: What are some of the medium to longer-term implications of this situation for Europe?
Wolfgang Ischinger: Vladimir Putin's actions in Ukraine have reinvigorated NATO, brought the EU to speak with one voice, created fear among all of Russia's neighbors, and re-energized the search for a more diversified European energy policy. You do not need to be a prophet to predict that pipelines that have been under discussion for a while that avoid Russian territory are now going to be built. Putin has also managed to re-energize the trans-Atlantic relationship. The Snowden-NSA scandal, which precipitated a deep crisis of trust among trans-Atlantic partners, has almost completely disappeared from the front pages, practically overnight. US and EU leaders are now talking to each other as close partners again. Russia will be weaker, the West will be re-invigorated. The bottom line therefore is: Thank you, Vladimir!
A shorter version of this interview also appears in the current issue of Goldman Sachs' "Top of Mind."