Germany, Russia, and the Rise of Geo-Economics; The Paradox of German Power

In This Review

Germany, Russia, and the Rise of Geo-Economics
By Stephen F. Szabo
Bloomsbury Academic, 2015
200 pp. $112.00
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The Paradox of German Power
By Hans Kundnani
Oxford University Press, 2015
160 pp. $27.95
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Germany—which boasts a trade surplus larger even than China’s, plays a preeminent role in the EU, and enjoys a reputation for sound domestic governance—might be today’s most underrated global power. Its power rests not on military might but on what Szabo describes as “geo-economic” clout, derived from the practice of a kind of commercial realpolitik that privileges the country’s economic well-being above all other interests. Especially important is the influence of big export and foreign investment firms on German policies. Szabo focuses in particular on the complex, clandestine, and sordid drama of recent German-Russian relations. The actors include giants such as the German engineering firm Siemens, which has long faced accusations of corruption and bribery (and has admitted some wrongdoing), and Gazprom, the state-controlled Russian energy conglomerate, which in 2005 hired former German Chancellor Gerhard Schröder to chair the board of an affiliate it had formed to build a major Russia–Germany gas pipeline. Szabo’s core thesis—that big business runs the show in Berlin—has been somewhat overtaken by events, as German firms have helped shoulder the large costs of sanctions against Russia and might do the same in the wake of a eurozone-backed restructuring of Greek debt. Yet this analysis remains an original and indispensable corrective to the overly political-military focus of most writing on Europe, Russia, and global politics.

In his wide-ranging book, Kundnani examines the exercise of German geo-economic power in Europe. He reviews the well-known history of “the German question”—the long-running debate about Germany’s proper role in Europe. He goes all the way back to the story of the country’s initial unification in 1871 and examines its postwar policies in order to show that present-day Germany is more straightforwardly self-interested than is commonly argued. Until recently, Germany exploited a combination of successful labor reforms, rising global demand, and a privileged position in the eurozone to generate enormous and, for others, destabilizing trade surpluses. A desire to defend this advantage explains in large part Berlin’s hard line during the euro crisis. Germany, Kundnani argues, increasingly exercises a “semi-hegemonic” position, at least within Europe, due to its growing influence and tough diplomacy.

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