What Can Europe Expect After German Elections
7 July, 2017

While populism has been on the rise, the Netherlands and France prove that European politics this year has been better for Europe than the Kremlin, says Andrej Novak, a political and business consultant focusing on Eastern Europe. Hromadske examines German politics and foreign policy with Andrej Novak.

With the upcoming German elections this autumn, Novak predicts that there will be continuity in government and foreign policy as Chancellor Merkel is in position to remain in the Chancellorship. Furthermore, “Even if Martin Schulz [opposition leader - ed.] were to win, he’s also a strong pro-European voice,” states Novak.

Merkel and other European leaders must now be more independent in its foreign policy position and directives with the new U.S. administration. This also applies to the Russian-Ukrainian conflict. Sanctions against Russia, however, does not equate to investment in the Ukrainian economy. According the Novak, that still comes down to reforming the business environment as well as the judiciary, government services, and administration. “[Germans] are very sensitive to dysfunction in these kinds of institutions. So, if Ukraine picks up in that area and improves, I think investment will come.”

Read More: German Ambassador to Ukraine: Escaping the Minsk Stalemate

Hromadske discusses the current German political atmosphere, foreign policy, its stance on Ukraine and Russia and Nord Stream project with Consultant at European Cosmopolitan Consulting, Andrej Novak.

What do you think are the next steps for Ukraine in terms of European integration after we get the visa free regime and what can we expect from our European partners?

Andrej Novak: I believe that we have a problem with making a good offer in between something like when you’ve already achieved, something like the visa-free regime and the association with the European Union, and already then the candidate status at some point where membership is being negotiated. We need some steps for in between and I believe an intermediate step is the internal European market, with the four freedoms of movement: labour, services, goods and capital. The free trade regime, the DCFTA [The Deep and Comprehensive Free Trade Areas - three free trade areas established between the European Union, and Georgia, Moldova and Ukraine respectively - ed.], is primarily directed at goods and capital, and partly at services. It should be a mutual process of increasing the possibilities and opportunities of people on both sides.

Ukraine is the centre of gravity in the Eastern European region of the countries which strive to get closer with European integration and eventual membership and it could set an example and say let’s integrate with the other countries that are on the same track and let’s make the four freedoms of movement of the European internal market a reality within our group of countries.

Photo credit: EPA

There is the thought here in Ukraine that as long as Germany imposes sanctions on Russia, Germany will eventually invest more here in Ukraine. What is your answer to this?

Andrej Novak: I’m not sure if the sanctions question is very closely connected to the investment question. I think it’s important for Ukraine to keep Germany engaged and work closely with Germany as a strategic power, economic power, political power in Europe and internationally. So of course this is a key partnership that needs to have the highest priority. I think Germans are used to very stable circumstances, to functioning institutions like courts, laws, government services, administration, so they’re very sensitive to dysfunction in these kinds of institutions. So if Ukraine picks up in that area and improves I think investment will come. The sanctions question is more about containing the problematic Russian behaviours, including aggression against Ukraine and destabilization efforts in Europe.

What about the Nord Stream Project? What is the level of support from Germany of the Nord Stream Project?

Andrej Novak: I think that there are many risks associated with this project, also for those pushing it like Gazprom and their European partners, because a you have the energy transition to renewables, perhaps in ten years it won’t be needed completely. Second, it’s not a business decision to build Nord Stream 2 because it’s just a doubling or tripling of the actually needed capacity so a normal business that’s profit oriented wouldn’t do a project like Nord Stream 2 because of the capacity through Ukraine and Poland and so on is already working. So it only makes sense in a political way not in the sense of a business, only in a marginal sense and I think that the European partners, I don’t think their risk management is very good and I think in this project they’re exposed to many risks and I don’t think they can expect to make a lot of money. Within 20 or 30 years, they will probably end up making less of a profit than they expect.

Photo credit: EPA

The German government is urrently, we must say that of course what’s said now needs to be seen in the context of elections in September. If for example the Social Democrats (SPD) they say we are in favour of this project, it’s important for our bilateral and economic relations, then the Chancellor doesn’t want them to score a point with that, so she is also saying that and backing this project. The Chancellor said that she doesn’t want this question to be decided at some level in the European Union, it should be a national decision. But we don’t know at this point how much of that is a decision taken out of conviction and how much is the tactical positioning before elections.

In Germany, this autumn, there’s an election. What can we expect from this? Will there be any major changes?

Andrej Novak: Well, I spoke to some Ukrainian partners three months ago and I told them, you know, I think this year is going to be better for Europe and worse for the Kremlin than many people think. Because I said, I don’t think the populists will win the Netherlands, even if Wilders gets enough votes, he won’t get a majority, he won’t be able to form a government, the same in France, and the same in Germany. So in Germany, the likelihood of a change in the Chancellor is currently not very high. So it is likely that Merkel will the be the Chancellor after the elections. So there will be continuity in foreign policy even if Martin Schulz were to win, he’s also a strong pro-European voice, even if less experienced with Eastern Europe, with Russia. But the likelihood is that we will again have Merkel. The question is what kind of coalition government will she form. She will likely need some partners, either from the Liberals or from the Greens, or again with the Social Democrats in a big coalition. So I think there will be continuity in the German foreign policy area. So we can see the tandem of Macron and Merkel working together in the next year. That’s the most likely scenario.

Photo credit: EPA

My last question: how do you think the relationship between Trump and Merkel will influence European politics?

Andrej Novak: Well the thing is, I think there’s quite an element of unpredictability with Trump. And there are mixed signals from Washington. They are considering exporting more and better arms to Ukraine, for example, currently. In terms of Germany, they’ll try to keep things civil and positive with America but also chart their own way and work towards to strengthening Europe.

/Inteview by Olga Datsiuk

/Text by Chen Ou Yang