Reuters
LONDON (MarketWatch) — Former German Chancellor Helmut Kohl, who with a mixture of cunning intelligence and good fortune led his country’s unification with the Communist east of the country, used to say that you should never enter a room without knowing how to get out.
Europe’s dilemma over how to treat Russia after the weekend Crimea referendum reminds us that the post-Kohl leadership of the European Union has been singularly deficient in learning from the former chancellor’s strategic deftness.
In urging Ukraine a little too eagerly last year down the road toward a strategic association with the West, the EU should have been prepared for a weighty Russian response. Plainly it wasn’t, and it isn’t.
The EU baiting of the Russian bear has been tantamount to a small boy in a schoolyard taunting the playground bully by threatening to take away his favorite box of marbles. What has manifestly not been in place for repelling the inevitable escalation of menace is an adequate fallback strategy — such as alerting the head-teacher about possiblesecurity alerts.
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The trouble for Europe is that, in betraying these shortcomings, it’s been here before. In apparently neglecting Russia’s visceral fears, vulnerabilities and ambitions over Ukraine, Europe’s leadership has now demonstrated the same basic pattern that has been on abject display in previous episodes.
At the beginning of the 1990s, Europe (and Kohl and the Germans this time bore a large part of the blame) did all too little to recognize and then help assuage the underlying tensions that led to the last outbreak of war in Europe, over the breakup of Yugoslavia.
More recently, and more spectacularly from a financial market point of view, the Europeans failed to spot the sources of difficulty that would bring the euro to near breaking point only a decade or so after it was launched in 1999.
The European Central Bank, for example, now acknowledges that it was a major strategic mistake to have looked at the euro EURUSD +0.31% area in its first dozen years almost exclusively as an overall aggregated currency bloc. The ECB (and others) showed far too little interest in delving into the individual country imbalances that were fast becoming fairly evident factors behind the fracturing we have seen since 2010, only slowly and painfully being repaired.
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Over the issue of German unification, Kohl was neither conceptual genius nor all-knowing mastermind.
In February 1989, only nine months before the fall of the Berlin Wall, he berated me for asking him too many questions about reunification and insisted that a new linkup with East Germany, if it came, would arrive through European integration and not through the Communist East simply joining the Federal republic. When the unexpected happened, Kohl profited from the lack of a master plan, made the necessary alliances, weaved his way through the shoals of adversaries and did a deal with the Americans, NATO and Mikhail Gorbachev.
He was immeasurably helped by the oil price being at only $10 a barrel. Had it been higher, the Soviet Union (as it then was) would not have been inclined effectively to sell the old German Democratic Republic to the West with so little reward.
By failing to strengthen and diversify its economy over the last 20 years, Russia is now vulnerable to U.S. and European sanctions. But many of these problems will be felt more in the longer rather than shorter term.
Tension over Ukraine will support energy prices, at least for the moment. Despite efforts to diversify energy sources toward more stable areas of the world, Europe (particularly Germany) probably has more to lose from sanctions in the short term than Russia, showing how difficult it will be for the West to present a united front in the next few weeks.
At this particular juncture of history, President Vladimir Putin may be an impossible person for the West to deal with. In confronting a man who sees his mission as repairing the stigma of Soviet collapse and rebuilding a Greater Russia, Kohl, too, may well have been out of his depth.
But at least, before wading into the deep end, Kohl would have been more aware that he was moving into turbulent and treacherous waters — and would have been slightly more adept in arranging lifeboats and rescue mechanisms to deal with the danger of drowning in his own hubris.
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