Russian President Vladimir Putin’s aggression toward Ukraine has destroyed Europe’s trust in Russia, leaving politicians and businesspeople feeling that “we are not partners anymore,” German Ambassador to the U.S. Peter Wittig said.
“A lot of trust was destroyed by Putin’s policy,” Wittig said at a Bloomberg Government lunch in Washington yesterday. “And I think it’s a challenge to regain that trust.”
Germany was Russia’s biggest trading partner after China last year, with 6,000 German companies that have commercial ties with Russia, netting $88 billion in trade between the two nations, according to data compiled by Bloomberg.
While it wasn’t in the self-interest of German industry to support economic sanctions to punish Russia for dividing Ukraine, “the leadership of the business world made it clear that Putin didn’t leave us any other choice,” Wittig said.
Over the past six months, the European Union and U.S. have imposed a succession of penalties on Russian companies and individuals that have helped push Russia’s $2 trillion economy to the brink of recession. Russia has suffered capital flight and stock-market volatility since the Ukraine crisis began.
The ruble weakened to a record yesterday, approaching the level at which Russia’s central bank said it would step in to support the world’s worst-performing currency this quarter.
The ruble fell 0.8 percent to 44.2450 versus the central bank’s target basket of dollars and euros at 8:10 p.m. in Moscow. That’s within 0.4 percent of the 44.40 threshold that would prompt the monetary authority to begin buying rubles according to its policy guidelines.
At the start of this year, “nobody had anticipated that Putin would take such a momentous decision” to seize Ukraine’s Crimean peninsula and back armed separatists in eastern Ukraine, creating a rift between Russia and the U.S. and its European allies that “would take us back to a Europe before 1989” and the demise of the Soviet Union, said Wittig, who previously served as Germany’s ambassador to the United Nations.
“Now we are asking ourselves” about the future of “East-West” relations, Witting said. “Putin has signaled that he has renounced” the “partnership that we had.”
In Berlin yesterday, German Chancellor Angela Merkel invoked the 40-year history of communist East Germany as an historical example, saying the EU and the U.S. may be in for a “long haul” in their face-off with Russia, and that there’s no reason for the allies to soften their demands on Putin.
Wittig said that “we don’t know what kind of relationship” will evolve between Russia and the trans-Atlantic allies. Putin has behaved in “unpredictable” ways over Ukraine, allowing him to get “the upper hand in this, because we could not read where he would go next,” he said. The EU and U.S. must be prepared for Putin to take “some steps that might be even more detrimental.”
The “fragile” ceasefire in eastern Ukraine puts the crisis “in a gray zone” after Putin’s “land grab” of Crimea, a “blatant violation” and “challenge to territorial integrity” of Europe, Wittig said.
“It can unravel,” Wittig said of the cease-fire, adding that “very much depends on the separatists and the willingness of Moscow to rein in the separatists, to stop arms delivery, to make them a stakeholder in pacifying that situation.”
Putin’s actions in Ukraine have had far-reaching ramifications on economic, military and political calculations made by European leaders, Wittig said.
Business leaders have reconsidered their engagement with Russia, and European nations that depend on Russian gas are diversifying their energy supplies, moves that “will not change even if relations improve with Russia,” Wittig predicted.
The crisis also has “changed NATO’s sense of purpose,” he said. While members of the North Atlantic Treaty Organization don’t support admitting Ukraine during a hot conflict because it would obligate all member states to defend Ukraine militarily, Germany favors “strengthening the presence of NATO in Poland and the Baltic States” on a “rotational basis,” the German envoy said.
Permanently stationing troops along the Russian border would be counterproductive, Wittig said, because it would contradict the spirit of the NATO-Russia Act of 1997, which envisaged cooperation between the two sides. NATO at the time pledged not to deploy nuclear weapons on the territory of new members. Abandoning the agreement would “very likely trigger” retaliatory action by Putin, Wittig said.
The relationship between the Russia and NATO today is a far cry from 2000, when Putin said in an interview with the BBC that it was conceivable Russia might someday join NATO.
Putin’s determination to destabilize and divide a neighboring state to keep it weak is a sign that Europe will have to cope with a more nationalistic and inward-looking Russia, he said. Still, he said, Germany wants to resist Russia’s tendencies to isolate itself, and that’s why the German chancellor, who speaks fluent Russian, talks regularly with Putin in an effort to influence his thinking.
“We have no interest in isolating Russia,” Wittig said. “It’s our immediate neighbor on the continent. So we cannot afford to have a fissure right in the middle of Europe.”