Why doesn’t Germany take Trump’s outstretched hand on Ukraine?
Rationally, it cannot be explained because Germany would be one of the biggest beneficiaries if Trump made peace. But it seems we don't want to benefit. We want to be right. At all costs.
Disclaimer: The information contained in this article is not and should not be construed as investment advice. This is my investing journey and I simply share what I do and why I do that for educational and entertainment purposes.
This article is entirely free to read.
In case you don’t know, I am German and live in Canada. That’s why I refer to ‘we’ at times.
TLDR Summary
Ukraine and Russia are in a stalemate, either side with little hope to achieve their objectives. Trump has understood that which is why he wants to end the war through diplomacy. And he wants to accomplish that by honoring the American commitment to NATO and Ukraine.
Peace would be very beneficial for Europe and especially for Germany. It’s baffling that German politicians are not jumping on the Trump train to make it possible. Instead, they are antagonizing the US out of pure spite.
Rationally, this is not explainable. But psychologically, it has to do with pride and principle, a mindset that is deeply engrained into the German collective mind. When in doubt, double down. No matter how much it hurts you.
Economic and military reality
On March 2, 2022, days after Russia’s invasion, I published my initial thoughts on this war in the article below.
Here is a key quote from that article:
The only possible outcome is establishing a neutral (and demilitarized) Ukraine without any ties to NATO or EU. The West can decide whether that will be worked on before or after millions of people are dead or ruined. The first step is for NATO/EU leaders to state publicly that Ukraine will never be allowed to join them. As long as they do not do so they share responsibility for the current escalation. To be clear, Russia is responsible for people killed by Russian missiles. But the West carries their share of the responsibility for the current situation, too. Both can be (and in my opinion are) true at the same time.
Unfortunately, that article and the fears I articulated therein have aged very well.
The current conflict started in 2014 when Ukraine pushed for NATO/EU membership as part of the Euromaidan protests. European leaders gave Ukrainians hopes that were never realistic. That was the original sin. Russia then made it clear it's a red line for them. Putin has connected his own political fate to this issue. Connecting Ukraine to the West requires taking him down. Whether one likes it or not, one has to accept it. Or be ready to conquer Moscow to enforce it which I am sure nobody wants (or believes to be a realistic option). Once Russia can be convinced that Ukraine won't seek that West connection anymore, the war will be over.
So far, nobody has tried to convince him of that. And so, a bloody war has been ongoing on Europe’s doorstep for over three years now. About a million people have died, 300,000 of whom were soldiers. Another million soldiers have been wounded. On both sides many of them being conscripts, i.e. people who did not want to fight.
These numbers are closing in on Verdun during World War I, one of the most horrible battles in the history of humankind. And just like in Verdun, Ukrainian and Russian soldiers have been butchering each other pointlessly for several years, each side with little hope to achieve the objectives set out by their commanders. It's a tragedy that's unfolding mostly outside of the visibility of the global media. They don't want us to see the horror, I guess. We might change our minds on the matter.
It’s a stalemate with very little movement in frontlines. And it’s a very expensive one. The West, incl. the US and EU, have spent north of $200bn so far to maintain it.
In this context, the new US president has stated that his primary foreign policy goal is to end this war. He wants to achieve it diplomatically and while continuing the US support for Ukraine. He even invited Zelenskyy into the White House to sign a deal to finance Ukraine’s reconstruction. During this press conference he reiterated that he stands by the US commitments to the NATO by the way.
Zelenskyy used this meeting to start renegotiating the terms of this agreement on public stage. He demanded military security guarantees and discredited Trump (in his own office!) for his goal of ultimately seeking a diplomatic solution to the conflict. Think for a moment what those ‘guarantees’ would look like in practice. It would require the US to commit their own soldiers if necessary. It would effectively be Ukraine joining the NATO. Do we really want to risk Russian and US soldiers officially and directly engage in combat in the middle of Europe? This demand is absolutely insane.
This press conference was an unprecedented affront and utter diplomatic failure from Zelenskyy. After watching the whole 49 minutes of the press conference, any reasonable observer would see Zelenskyy 100% at fault for the escalation. Pay attention how much patience Trump exhibits for more than half an hour. How he defends Zelenskyy against provocative questions such as his outfit. He wanted this press conference to be a success.
Oddly, almost the entire global media coverage of this event paints it as the absolute opposite. Nobody (outside of the US at least) criticized Zelenskyy’s performance. Instead, it’s being interpreted as America’s final rug pull on Ukraine and Zelenskyy. Western leaders rushed to express their support for him and some, esp. Germany, were quick at declaring the partnership with the US dead. The country that freed them from Nazism and defended them for decades. Another affront. And again, Trump literally committed to NATO in that very press conference.
The incoming German chancellor, Merz, is eager to invest $500bn into expand the military, almost 10x of the current annual spending. I wonder how Russia will react to that. Perhaps arming up to?
Merz even plans to amend the constitution in a rush to bypass spending limits (which is completely at odds with his campaign just weeks ago). And I predict today that Germany will reintroduce the military draft that was paused in 2011. Someone has to operate all that new equipment, no? German politicians are sleepwalking the country into an ever more intense confrontation with Russia. And at the end of it German conscripts may be fighting in it!
It’s an incredible hysteria. A hysteria that is completely at odds with the interests of the German population.
Europe in general, and Germany in particular, would benefit a lot from peace.
The Ukraine war has nuked the German economy. It’s now in the 4th (!) year of recession. And that is happening with massive fiscal deficits at about 5% of GDP. Including the unworthy off-budget shenanigans, the true annual deficit is north of $200bn every year. And that does nothing as a fiscal impulse to the economy. They are simply lighting it on fire the moment they spend it.
Energy costs are spiraling out of control because cheap Russian energy was supposed to keep the export machine going and become a cornerstone of the energy transition. Intermittent energy sources require cheap natural gas as a complement.
In contrast, the US are beneficiaries of the war, at least in relative terms. Their companies have become more competitive against European peers because of cheap and reliable domestic energy sources. And the US defense industry has generated dozens of billions of Dollars of extra revenue. It’s therefore unsurprising that US stocks have outperformed European stocks greatly over the last couple of years.
So, if Trump makes a serious attempt at ending the war, any reasonable German political leader should be eager to pick up the phone, call him, thanking him for his efforts and offer help to reach a solution. I could not think of a better outcome for Germans than a quick and constructive peace deal, ideally including the potential of procuring gas from Russia again in the future.
So, why is Merz not calling Trump to say that??? Why is nobody in Germany in the streets to demand that from him? Where does all this warmongering come from? It doesn’t make any sense. There is absolutely no way of justifying it rationally. But I believe there is a psychological angle to it.
Why are Germans choosing this misery?
Please allow me a little history lesson for my attempt to understand it.
In the summer 1918, it became more and more obvious that Germany and its allies were close to military and economic exhaustion. The morale of the soldiers was low from losing ground every day and the population faced economic hardship and starvation.
This triggered a revolution that forced Kaiser Wilhelm II to abdicate on November 9, 1918. His irresponsible foreign policy in the preceding decades had been the primary driver to cause this mess by the way.
A republic was declared in the aftermath. Its representatives quickly signed an armistice on November 11, 1918 and the war officially ended with the Treaty of Versailles in June 1919.
This treaty put a huge burden on the German population because the Allied Powers declared the Central Powers solely responsible for the war and therefore implemented draconian reparation payments.
Germans now faced two possible choices. Either appreciate and embrace the newly formed republic and grow that democratic seed by trying to negotiate themselves out of those reparation payments over time. Or reject this national humiliation and antagonize their foreign overlords which would lead to more military confrontation later.
As we all know, they chose the latter. The stab-in-the-back myth (German: Dolchstoßlegende) gained traction. It claimed that the German forces were undefeated in the battlefield and internal enemies (socialists, communists, Jews) had betrayed them by undermining the war machine from within. This undermined trust in the newly formed republic and contributed to its downfall when Hitler rose to power in the 1930s.
Germany’s history is full of such examples where they faced two choices and chose the wrong one. Was the Weimar Republic easy to live in? Probably not. But was it worse than the ultimate destruction of the country twenty years later? I very much doubt that.
Why do Germans choose wrong in binary situations? Because they almost always choose the more extreme path. We like to double down. Go harder into the pain. To be proven right eventually, even if it costs us everything.
Our principles mean everything to us, no matter how misguided they may be. No matter that most of the costs may already be sunken. Our embracement of nationalism a century ago is not much different from our current embracement of an insane energy policy, immigration policy and our irrational stance on the Ukraine/Russia conflict.
Contrast that to the Americans.
Winston Churchill allegedly once said "You can always count on Americans to do the right thing—after they have tried everything else." I think there is a lot of truth to this. Americans experiment with new ideas and they are willing to drop them once proven wrong. They have pragmatism, compromise and realpolitik baked into their national DNA. Americans mean revert. Germans go all in…until they collapse.
Going extreme is great in engineering. It enables you to build the most powerful and most fuel-efficient engines. But in politics, you need to keep an open mind. Change it if necessary and go the other way. That’s the forte of Americans. When progressives turn too extreme, they elect conservatives and vice versa. That gave them a republic that is 250 years old and counting.
The economic miracle in Germany after World War II happened under the guidance of the US. Germans had no choice, so they could not choose wrong. Americans forced their gift of democracy upon them. And they provided the political environment for German ingenuity (from which ‘engineering’ derives) to thrive.
Have you ever looked into how many US presidents are of German ancestry? Barely anyone. Interesting given that Germans are the largest self-reported ethnic group in the US at about 13% of the population, isn’t it? America’s ascent might be rooted in their ability to channel German ingenuity into economic growth without the political madness that comes with it.
German political extremism has to do with the ambition to 'be good. To be righteous. Whatever our ideological position at any point in time, we will go it all the way to the end. You might rightfully call that stubborn and narrow-minded. Germans consider it virtuous.
Germany is ground zero of wokism.
Wokism filled the void that Christianity left. Christianity understood that justice doesn’t ensure peace. It spirals violence out of control. Charity is what makes humans collaborate and coexist. Wokism is going back from the new testament to the old testament. Especially by its obsession with group justice.
Its definition is that every conflict comes with an oppressor/aggressor and an oppressed victim. Germans have determined that Putin is the oppressor and therefore he must be destroyed with very little regard for their own sacrifices. A recognition of the stalemate would be as painful to the national pride as the realization a century ago that Wilhelm caused the mess, not socialists, communists or Jews.
Wokists divide the world in good and evil. These are naive categories. Children think in those categories. Grown-ups think in terms of incentives, interests and negotiation positions. As a whole, we Germans are a very naive people. It’s visible in virtually all foreign policy positions over the last years and decades.
Aside from this mass psychological attempt to explain this mess, it’s important to understand that there are political actors who benefit from keeping this conflict going. It creates an outside enemy that they can project all causes of their misery upon. Having this helps controlling the population who should obviously be upset with the dramatic mismanagement of the country. This is by the way also why the Greens (once a staunch pacifist party) are the craziest warmongers. Their policies have proven to be the most expensive political mistakes the country has ever done. Having Putin as the enemy helps to divert attention from that.
This has caused a huge media campaign that hides facts like Zelenskyy’s press conference failure from the public. The media coverage of this failure was the exact opposite of what a reasonable person would believe after watching the actual event. Germans don't have the necessary information to understand that Trump is an opportunity to end the war on terms that would help Germany.
What motivates me to write this article?
This delved much more into politics than I usually do. I understand and respect that you subscribed because of financial and economic analysis, not political opinion. The reason I am making an exception today is that I consider it important that these points are made because barely anyone is making them.
A minority of those reading this (I estimate 10-20%) will be deeply offended. They consider Putin the reincarnation of Hitler and hence consider my words either delusional or malicious. Those people are lost and can’t be helped, at least not by me. As for the rest of you, you may be uncomfortable with these words. You may disagree with them. But you are likely equally uncomfortable with the narratives of your politicians and media. It’s you who I am primarily speaking to.
I want you to understand that you are under fire every time you watch the news or open a newspaper. Or more precisely your mind is. Especially if you are in Germany. The national broadcast is funded by the government. Politicians from the governing parties are in the supervisory boards of those outlets. They are not telling you what’s right or true. They tell you what’s helpful for them.
Don’t be afraid to trust your common sense. Even if it challenges your self-perception and where you stand in the society. You are primarily responsible for the wellbeing of your family, not for the current Ukrainian administration to remain in power.
Sincerely,
Rene
Great article! Politicians are too entrenched, having chosen sides (a.k.a. "we're the good guys now"), and public opinion is trapped in a one-way street. In their deranged minds, admitting it would be scarier than turning around. The "German Angst" takes many shapes and forms.
Thanks for taking the risk in writing this