Putin’s War – Morning Briefing Plus

Hello dear readers,

a dramatic week is behind us, a week that will go down in history as a turning point. We have devoted an extensive cover story to this memorable moment, including what Vladimir Putin intends with this unprovoked and unprovoked attack on Ukraine.

The first open war of aggression in Europe since World War II begins just two weeks after Chancellor Olaf Scholz told Moscow at a joint press conference with Vladimir Putin that war had become unthinkable for his generation. With the Russian President’s order to invade Ukraine the German Ostpolitik is now in ruins.

Just a few weeks ago, SPD parliamentary group leader Rolf Mützenich was straying that everything must be done to “reduce the real danger of war and to break the spiral of threats and counter-threats”.

For years, many European politicians refused to accept that Putin sees military force as a legitimate means of continuing politics. The Kremlin’s lies, they were ignored. The warnings of the Americans also went unheeded.

The Germans always have the highest moral standards for themselves and, above all, for the rest of the world. But when it comes to helping a threatened free country, all that country can bring itself to do is send a few helmets. Given the Russian superiority in the region, German arms deliveries to Ukraine would also be primarily a symbolic gesture. But an important one. Because the attack is aimed at the West, it is aimed at its values ​​– and its freedom.

And when it comes to the sanctions against Russia, I have serious doubts as to whether that could really have been all. I see the danger that Putin will be right in his assessment of the West: We lack the strength and will to take really decisive countermeasures that also cost us something.

A tweet by the competition economist Justus Haucap, who exaggerated the German reaction to the Russian war of aggression as follows, got me thinking: “(1) illuminate the Brandenburg Gate in blue and yellow, (2) Schalke removes Gazprom advertising from their jerseys, (3) fills the Bundeswehr Paper in fax machines on…”

Around the clock, Handelsblatt reporters from all over the world follow what is happening around the war in the East (You can find the most important news here in our news blog). When the lights go out at the Düsseldorf headquarters, colleagues in New York take over, and later in Beijing, Bangkok and Tokyo.

But last week was the closest my colleague Jürgen Kloecknerwho was in Kiev when Russian troops invaded Ukraine.

Last night he reached the Polish border near the Ukrainian city of Lviv with thousands upon thousands of other refugees. On the way, he encountered Ukrainian missile transporters and tanks heading towards the combat zones in the east of the country. It is the beginning of a new flight movement.

In the next few weeks, Germany will have to engage in two dreaded debates: First, how Europe can defend itself in the face of Russian aggression in the future. And second, how to reduce energy dependency on Russia and whether it is wise to shut down the remaining nuclear power plants at a time of increasing energy insecurity. Both are ideologically sensitive terrain, but could be of existential importance in the coming months.

What else kept us busy this week:

1. The European heads of state and government decided on Thursday evening to significantly tighten sanctions against Russia. On Friday, our Brussels office manager, Moritz Koch, learned from EU diplomats that these sanctions are also aimed personally at Putin and his foreign minister, Sergei Lavrov. Your assets should be frozen. By the way, Putin seems to have expected this: Just a few weeks ago, his yacht “Graceful” was in Hamburg for maintenance work. The ship left the shipyard before the work was completed.

The EU has launched a package of “economic and financial sanctions, but also sanctions against those who are responsible for this dreadfulness of the people in Ukraine,” said Foreign Minister Annalena Baerbock in Brussels. “This will ruin Russia.”

2. We talked a long time about the in the morning news conference on Friday Western sanctions discussed against Russia: How they work, whether they really harm Russia – and what consequences they have for the western economies. Here are the most important questions and answers – and which points are still open.

3. The debate has been going on for weeks as to whether Putin will stop gas supplies to Germany in an emergency. And the delivery quantities have been falling for weeks. A day after the attacks, they are now suddenly increasing – Russia is supplying almost twice as much gas via Ukraine and Slovakia as two days earlier. My colleague Kathrin Witsch explains the background.

4. The naivety of German armaments policy is shown in a number: Armament spending should fall from 50.3 billion euros to 46.7 billion euros in 2022. After all, Finance Minister Christian Lindner and even Economics Minister Robert Habeck now agree that this is the wrong direction. “Declining defense spending is no longer appropriate,” says Lindner. The Germans have to get used to this idea.

5. Two interviews caught my eye last week: Former German ambassador in Moscow, Rüdiger von Fritsch, witnessed the transformation of Russia into a hegemonic power. He says the country is “victim of an obsessive man”. You have to ask yourself “on what picture of reality the President’s decisions are based”.

Former world chess champion Garry Kasparov said in an interview with the Handelsblatt: “There is no end for Putin. Dictators never stop by themselves, you have to stop them. I hope Ukraine will be the end because we resolutely stand up to Putin and make sure his regime goes bankrupt.” And he adds: If ex-Chancellor Gerhard Schröder moves into the Gazprom supervisory board, “he should be treated as an accomplice to war criminals will”. Because what is happening in Ukraine is a war crime.

6. By the way, before Russia invaded the country, Ukraine had become one technology hotspot that is important for Europe. Almost 5,000 IT companies were based there, and app developers sold their products all over the world. Nobody knows how the scene will continue. Shortly before the Russian attack, my colleague Hannah Krolle spoke to start-up founders in Kiev.

7. When I met with my colleagues Thomas Sigmund and Klaus Stratmann for an interview with Federal Minister of Economics Robert Habeck, the Russian threat was already in the air. “Should Russia escalate the conflict further, the EU will respond with tough economic sanctions,” said the economy minister. “We are prepared.” In our conversation, Habeck also initiated another, important debate, which subsequently caused widespread discussion: “We should talk about something like a retirement window, not a fixed age.” A flexible pension, so to speak.

8th. Apart from the war in Ukraine, unemployment is the biggest crisis in the German economy. There is a shortage of workers and skilled personnel in almost all sectors. Companies like Fraport and Deutsche Bahn are now putting pressure on people to make immigration to Germany easier. The shortage of skilled workers is now even threatening the energy transition, as Kathrin Witsch analyses: The problem will drastically worsen by 2030.

9. The Handelsblatt Autoteam had already reported exclusively in November that that VW plans to take Porsche public. Now the plans are concrete. In a report well worth reading, Stefan Menzel writes how Porsche CEO Oliver Blume is separating his brand from the VW group. He portrays a manager who has often decided to go his own way.

I wish you a nice weekend.

It greets you cordially
Yours Sebastian Matthes

Editor-in-Chief of the Handelsblatt

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