By Max Bergmann

Germany's policy of engagement and partnership with Russia is rooted in the German experience within Europe. If economic interdependence and integration could transform Germany after both World War II and the Cold War, so German thinking goes, then it might also transform Russia.

Nevertheless, nearly 20 years after the end of the Cold War, Germany's efforts -- as well as those of Europe and the U.S. -- to transform and integrate Russia have failed. Over the past decade, Vladimir Putin's Russia has forcefully rejected integration with the West, predicating its desire for a return to great power status on expanded state power and the assertion of Russian autonomy. But despite Russia's recent shift away from democracy, human rights, and the rule of law, Germany has not only firmly maintained its approach, it has expanded it, leaving the U.S. and Europe divided on this increasingly urgent policy front.

Germany has been slow to come to grips with the clear and obvious failings of its Russia policy, which lie not in the concept underlying engagement, but in Germany's inability to achieve its objectives singlehandedly. Germany is not strong enough on its own to change Russia. It is, however, strong enough to change and unify Europe -- and a united Europe could be strong enough to, in turn, spur Russia to change itself.

Despite divisions within Europe over Russia, events over the last year have now created an opportunity for substantial policy convergence both within Europe and with the United States, centering on a more pragmatic form of engagement. For a common Western approach to crystallize, though, Germany has to lead within the EU. The union is now desperate for German leadership on a number of other issues, too -- from the economic crisis, to energy policy, to Europe's role in the world.

That mirrors growing U.S. expectations for Germany to lead Europe on the global stage. As a presidential candidate, Barack Obama chose Berlin last year in order to speak to Europe. On the financial crisis, his administration has encouraged Germany to step up its support for Europe as a whole. And if anyone needed more convincing that Germany has shed its World War II legacy and returned to being a "normal" country, a U.S. president pled with the leader of Germany to shoulder a greater burden for global security by sending German soldiers to a distant land.

Unfortunately, from a U.S. perspective, the German response has been disappointing. On the economic crisis, U.S. commentators were shocked by apparent German dithering and a reluctance to step up on behalf of Europe. Germany has also demonstrated reluctance to do more on global security. Complicating matters, both Germany and France -- the engines of European integration -- have waned in their enthusiasm for the European project. The EU's "big bang" expansion of 2004 watered down their clout within the Union and saw each country subtly revert to a more parochial approach toward European issues. As a result, Europe is in the midst of an identity crisis, one driven not just by the economic collapse, but also by a general loss of solidarity and direction.

While there are few indications that Germany will step up, there will be increasing urgency for it to do so. Russia and the EU remain engaged in a geopolitical tug of war over their "near abroads," and the deepening economic crisis and resulting political instability may intensify the competition. The EU will need Germany's support and leadership if it is to maintain its influence within the region.

We have arrived at a moment in which Germany could again lead Europe. The problem with moments is that they pass quickly.

The Defeat of Germany's Ostpolitik

German policy toward Russia is founded on the premise that liberal economic and political engagement will socialize Russia to European norms and values, resulting in Russia's gradual integration into the European sphere. It is rooted in the 40-year legacy of Ostpolitik -- the policy of "change through rapprochement" -- which was founded on the premise that engaging East Germany and the Soviet Union could gradually lead them to change their behavior and outlook, and eventually even serve to undermine the communist system. A 2006 strategy paper on Russia produced by the German Foreign Ministry updated the policy slightly to focus more on economic ties, calling specifically for "rapprochement through economic interlocking."

Frank-Walter Steinmeier, Germany's foreign minister, explained in article for the German Council on Foreign Relations that "the model for success is not based on divisions and isolationism but rather on integration and interaction . . . supported by a spirit of reciprocity." Constanze Stelzenmuller, writing in Foreign Affairs, explained, "Berlin's current policy of engagement has been based on the assumption that successfully guiding Russia into the rule-based world of Europe would be the greatest triumph of German soft power." But Stelzenmuller also notes the policy's fundamental flaw: "It assumed a reciprocity of interests and intentions" with Russia.

The policy has indeed led to the development of close ties between the two countries. Germany has become Russia's largest export market as well as its largest market for energy. Germany has supported the expansion of Russian energy companies into the European energy market, on the grounds that it would reduce Russian incentives to manipulate energy supplies. In fact, rather than emphasize the need for diversifying energy supply, Germany has sought to develop more direct energy routes to Russia. It has heavily supported the Nord Stream pipeline, which would directly connect Germany and Russia via the Baltic Sea, and Germany's former Chancellor Gerhard Schroeder now even works for Gazprom on the project. Meanwhile, German businesses have invested heavily in Russia.

As a result, Berlin has gained more influence in Moscow, especially when compared with other EU capitals. Its privileged place in terms of bilateral relations has made it an important partner for Moscow, with Germany widely seen by Russia's leaders as the gateway to Europe. Nevertheless, the hope that interaction would gradually acclimatize Russia to European norms has definitely not been realized. In fact, to the contrary, Germany's partnership could now be seen as an obstacle to changing Russian behavior.

While Russia's increased economic integration with Germany and the West has created some important constraints on its behavior, Moscow has also sought to exploit these connections. In other words, Russia, too, has had its own reasons for developing the bilateral relationship -- namely, to expand its influence over the European energy sector, as well as to exploit its relationship with Germany to advance its interests within Europe. Russian policy toward Europe as a whole has been to avoid working with it collectively and to focus on bilateral arrangements, particularly in the energy sector.

In so doing, Russia has demonstrated that interdependence is a two-way street. Just as Germany has sought to change Russia's behavior, Russia has also sought to change Germany's, and as a result Europe's. Russia has used the Berlin-Moscow relationship to shield itself from the EU's harder-line Eastern European countries and to prevent the development of a coherent pan-European policy toward Russia. The close German-Russian relationship has also served to focus Germany's Russia policy more on bilateral interests, rather than on pan-European ones.

As a result, German policy has at times been reflexively supportive of Russian positions. For instance, Germany essentially turned a blind eye as Putin aggressively weakened democracy, human rights, and civil society. Former Chancellor Schroeder even called Putin a "flawless democrat." Germany is often sheepish about EU policies that might annoy Russia -- even those that reflect its core values and are in the interests of the EU. German business interests have a stake in maintaining the current Russia policy. That includes, by extension, an interest in blocking efforts to change and integrate European energy policy, which could serve to decrease the EU's dependence on Russia, thereby making it less susceptible to shocks and shortages.

Additionally, Russia's hostility toward its near-abroad, and even toward Germany's fellow-EU member countries, has not led to a shift in German policy. Russia's highly aggressive approach toward the less-accommodating EU countries has included engaging in cyber-attacks against the Baltic states, erecting tariffs against certain EU countries, conducting assassinations with radioactive materials in London, and exploiting ethnic tensions to undermine EU efforts to stabilize the Balkans. This has only further intensified these countries' fears of Russian belligerence, solidifying their harder-line approach and undercutting the German argument for engagement and partnership. Mark Leonard and Nicu Popescu of the European Council on Foreign Relations argue that by failing to address this challenge, Germany's "creeping integration" approach "plays into the hands of Russia's explicit strategy of building asymmetric interdependence with the Union," in which Russia's leaders seek to "create a situation where the EU needs Russia more than Russia needs the EU."

However, Germany has quite effectively argued that to treat Russia as an adversary, rather than as a partner -- as proposed by many in Europe -- would only lead to greater insecurity for Europe. This has been the central debate within the EU and one that has sharply divided the Union. But while an adversarial approach toward Russia would be dangerous, the past decade has clearly revealed the severe limitations of the German approach. Germany is simply not strong enough on its own to change Russia through a policy of engagement. In fact, such a bilateral approach has served more to weaken Europe than to strengthen it.

Converging Toward Pragmatic Engagement?

Various developments have now created an opportunity for Europe and the U.S. to move past this binary "friend or foe" debate, and toward a more common and pragmatic approach toward Russia. They include Russian over-reaching over the past year, the arrival of a new U.S. administration, a recognition -- however slight -- by Germany of the need to recalibrate its policy, and the increased clout handed to Germany within the EU as a result of the economic crisis.

Following the Russia-Georgia war last August, Russian leaders, as well as many in the West, interpreted their overwhelming military victory as signaling Russia's return as a major international force. Although Moscow's brash, 19th-century-style exercise in geopolitical bullying initially seemed to pay off, subsequent developments served as a reminder that we are no longer in the 19th century. The international isolation and rebuke that followed, along with the dramatic fall in Russia's stock market caused by spooked foreign investors, served to dampen the party in Moscow. The severe impact of the global economic crisis, falling energy prices, and outrage within Europe over Russian manipulation of gas supplies this winter all further demonstrated to Russia that it had overplayed its hand. As a result, Moscow has sought to broadly ease tensions.

Next page: Rejecting a binary choice of partner or adversary . . .

The Obama administration, eager to avoid adding a geopolitical conflict with a nuclear power to its already crammed foreign policy agenda, has rejected the binary choice between treating Russia as a strategic partner or strategic adversary. This marks a significant shift from the Bush administration, which vacillated incoherently between these two poles. On the one hand, the Bush administration sought desperately to maintain the superficial personal relationship between President Bush and President Putin. On the other hand, Vice President Dick Cheney and other neoconservatives in the administration strongly supported the expansion of democracy in Russia's near abroad through the president's so-called "freedom agenda."

The Obama administration has laid out a middle course by trying to "reset" the relationship. Lost are the pretensions of the U.S. and Russia sharing common values, corresponding outlooks, or even a mutual friendship. But also lost is the view that Russia is inherently a hostile adversary. The relationship has instead been placed in its appropriate context, with the administration seeking to engage Russia on a more pragmatic basis. This more pragmatic approach recognizes that, for instance, the thorny issue of NATO expansion will have to be delayed until a rapprochement with Russia on this subject can be achieved, if ever. Instead of emphasizing the controversial, the administration is emphasizing the possible, namely nuclear cooperation.

Russia's actions following the Russia-Georgia war have also led to a slight backlash in Germany. While Germany initially, and perhaps correctly, blamed Georgia and its leader Mikheil Saakashvili for the fighting, as the conflict continued and Russia sought to exploit its gains, according to Stelzenmuller, "the mood in Berlin abruptly changed." Germany could no longer simply pretend that engagement was working the way "rapprochement through economic interlocking" was supposed to. Steinmeier called Russia a "difficult partner" and said its actions were illegal, while Chancellor Angela Merkel affirmed Georgia's right to become a NATO member. Germany has not dramatically shifted its Russia policy over the past year. But Merkel, as Stelzenmuller notes, has "recalibrated the German-Russian relationship cooly and deliberately."

There is some reason to believe that the harder-line approaches among Eastern European EU members will also be weakened somewhat, creating the opportunity for more commonality within Europe. Obama's shift away from the more hard-line elements of the Bush administration's Russia policy, as well as a general departure from his predecessor's distinction between "new Europe" and "old," should serve to undermine the more confrontational approaches by limiting their ability to exploit the Euro-Atlantic divide. Additionally, the economic crisis has made the EU's heavily hit eastern countries more reliant on aid and assistance from the EU and its wealthier countries, namely Germany. Meanwhile, a more conciliatory posture on the part of Russia could further undermine calls for confrontation.

None of these structural shifts guarantee any significant policy transformation within Europe. But combined, they do open the door for a more coherent pan-European approach to Russia. Forging a more pragmatic policy of engagement toward Russia will require German leadership. It will also require a willingness by Germany to shift away from a policy that seeks engagement for the sake of the bilateral relationship to a more deliberate approach that puts the interests of Europe first.

Rivalry for Influence in Eastern Europe

As demonstrated by the Obama administration's approach, the U.S. is able to deploy a compartmentalized policy toward Russia, focusing on a few core areas of commonality while pushing aside areas of contention. But Russia's resurgence over the last decade has greater implications for Europe than it does for the U.S., and, as a result of its close proximity, Europe will be unable to implement a similarly selective approach. This is the case especially in its near-abroad, where Europe and Russia are on a geopolitical collision course -- a collision Europe will likely lose unless Germany shifts its weight.

The issue of NATO expansion may have been tabled, largely due to Russian objections, but the EU's role in the states to its east has not. These states, many of which aspire to the European model, act as a buffer between the EU and Russia, and Europe has a tremendous interest in seeing them turn toward the West. As a result, they have become the site of a modern geopolitical struggle pitting European "soft power" against more traditional Russian "hard power."

Europe as an actor pretends that it doesn't play power politics. But while it doesn't conquer, it does absorb. Having already incorporated the Baltics and former Warsaw Pact countries into the Union, the EU is now moving to consolidate its hold on the Balkans, while increasing its presence around the Black Sea. Romania and Bulgaria are now EU members, and Turkey is in accession talks. And with the EU's gathering efforts in the Ukraine and Georgia following the Orange and Rose revolutions, it is further encroaching on Russia.

Russia, meanwhile, views the EU's efforts to promote and deepen democracy, the rule of law, and civil society as ideological instruments used to expand the trans-Atlantic sphere of influence. Just as the U.S. feared the ideological spread of communism in the Caribbean and Latin America, so does Russia fear the Europeanization of its own "sphere of influence." So while Russia dismisses European "soft power," it is also deathly afraid of it, seeing it as an expansionist force that can undermine Russian authority.

The intensity of Russia's response to the EU's steady advance reveals how seriously it takes the geopolitical implications. Putin and President Dmitry Medvedev have forcefully asserted the view that Russia's smaller neighbors reside in its natural "sphere of influence." Russia has made clear its willingness to use all of its geostrategic tools to retain and expand its influence -- whether by cutting off oil and gas supplies to Ukraine and Georgia, or harassing and undermining the reformists. Russia has also taken advantage of any opportunity to make the EU look weak. In the Balkans, for instance, it attempted to obstruct Kosovo's independence, encouraged the Bosnian Serb entity to succeed, and encouraged the Serbian government to reject the EU in exchange for a partnership with Russia.

But despite the eagerness of many countries in the region to move closer to Brussels, Europe has been slow and uncertain about its approach. Exhausted and divided from the "big bang" expansion, Europe has sought to engage the region without offering the carrot of potential membership. It developed the European Neighborhood Policy, first outlined by the Commission in 2003, in an effort to promote trade, foreign assistance, investment, good governance, the rule of law and democracy. In short, this policy sought to mimic the advantages and incentives of membership without actually making these countries members.

Not surprisingly, the policy failed to create much enthusiasm among the targeted countries, and Europe initially provided little else for them to be excited about. Recently, however, the EU has sought to expand its efforts. Mimicking the French-led Union for the Mediterranean partnership, Poland and Sweden pushed for a new Eastern Partnership with the Ukraine, Moldova, Belarus, Georgia, Armenia and Azerbaijan. The partnership will attempt to develop a free-trade area, giving these countries greater access to the EU market. It will also ease travel restrictions, and provide almost $1 billion in EU assistance funds targeted toward governance reforms.

However, Thomas Valasek, of the Centre for European Reform, fears that the EU's efforts won't be enough to solidify the region's support for the European model, since the "thinking of many governments [in the region] has become short-termist; long-term goals like building EU-compatible political and economic systems matter much less than political survival." Despite its own economic downturn, Russia could seize on the economic desperation of countries like Ukraine, and offer significant financial assistance in return for acquiescence.

Andrew Wilson and Nicu Popescu warn further that "the Union is in danger of losing the hearts and minds of its eastern neighbors because of its complacency and long-winded approach to crises." There is also a danger that the economic crisis may constrain Europe's willingness to engage, causing it to instead revert to "fortress Europe," in which it increases protectionism and expands visa restrictions on foreign workers.

Germany could provide the necessary support to the Eastern Partnership, but to do so may upset its domestic business interests, and risk unsettling its bilateral relationship with Russia, which responded with hostility to the EU summit where the partnership agreements were signed earlier this month.

This parallels the EU's response to the economic crisis, where despite the potential for a common European strategy, the EU's institutions ultimately lacked both the budgetary capacity and the political support needed to take aggressive action. Here, too, the question of German leadership was once again crucial. In the absence of EU capacity, the eyes of Europe -- especially Eastern Europe -- turned to Berlin. Some even questioned whether the EU would survive. While Merkel eventually assured assistance for EU countries in need, there was a clear reluctance on the part of Germany to subsume its national interests to those of the EU as a whole. This is in stark contrast to most of the last 50 years, during which Germany has seen its interests as one and the same with Europe's.

While the economic crisis hit at the heart of what Europe is -- a heavily integrated and powerful economic force -- the crisis of Europe's Russia policy hits at the heart of what Europe has promised to be: a global actor speaking with one voice. Russia is the biggest foreign policy challenge for the EU and presents a tremendous obstacle toward achieving a common European foreign policy. As Timothy Garton Ash argued, "There will be no European foreign policy unless there is a European Russia policy."

Without German leadership in developing a common energy policy and in supporting EU interests in its near-abroad, the EU will continue to flounder in its relations with Russia, threatening its foothold in the east and its credibility on the world stage. The opportunity is there for Germany to once again lead Europe. But opportunities are only what one makes of them.