The new year is shaping up to be a turbulent one. The euro, the Ukraine-Russia standoff and the Syria crisis are key unresolved foreign policy issues that the German government will have to deal with.
1. The new euro dilemma
Following the dramatic rescue of states in debt, such as Greece, the euro currency's existence is once again uncertain. This is how European Commission President Jean-Claude Juncker described it recently. This time, it's Italy in particular that is giving cause for concern. Even if the government in Rome and the EU Commission have now agreed on a budget compromise, recent events have left a bitter aftertaste: The Italian government of populist Five Star Movement and the right-wing Northern League had openly opposed the Commission. The Commission rejected Italy’s draft budget because, in its view, the new debt was too high.
Germany's former finance minister Wolfgang Schäuble thinks it's a mistake to believe that "more debt and a higher budget deficit would solve Italy's problems." But he believes that ultimately financial markets will discipline Italy: "I think the markets will tell them, 'you won't get any financing,'" Schäuble told DW at the end of October. But he has taken it personally that the Italian government simply wanted to break European guidelines: "I don't like being blackmailed."
Even if a big row seems to have been averted, the Italian government has some strong leverage: If the EU Commission were to punish Italy, it would give right-wing populists throughout Europe even more of a boost. This is certainly the last thing the Commission would want to do a few months out from European Parliament elections. But if it were to give in, its authority would be weakened.
In any case, the debate sets standards for the question of how seriously the EU takes its own rules. French President Emmanuel Macron also made financial concessions after the "yellow vest" protests. They will increase the French deficit again — and be possible fodder for the next dispute.
2. An intensified Ukraine-Russia conflict
The conflict between Russia and Ukraine after Crimea's annexation remains an ongoing issue. Germany and France have repeatedly attempted to broker an agreement, even after the incident in the Sea of Azov at the end of November, when the Russian coast guard denied three Ukrainian ships passage through the Kerch Strait. Moscow considers the strait to be Russian territory exclusively. Ukrainian President Petro Poroshenko appealed to the EU shortly before the EU summit in Brussels in mid-December to "increase international pressure on Russia."
However, the EU is divided on the question of sanctions against Russia. Some countries want to end sanctions because they are bad for business. Others would like to punish Moscow even more. They also criticize Germany for buying gas directly from Russia via the Baltic Sea pipeline, which Germany wants to further expand. According to German Chancellor Angela Merkel, heads of state and government agreed at the EU summit in mid-December "that there are no preconditions for lifting or facilitating the sanctions." But they have not been tightened either.
At a meeting with Poroshenko, European Commission Vice President Valdis Dombrovskis made it clear: "Sanctions are not a punishment. Sanctions are a motivation for Russia to return to the civilized world." Angela Merkel has been repeatedly trying to establish a dialogue with Russian President Vladimir Putin, but has so far failed to find a solution to the conflict with Ukraine.
3. Peace in Syria?
After more than seven years of civil war in Syria, the country has been completely destroyed. Millions of people have fled or been internally displaced. Meanwhile, President Bashar Assad, with the help of Russia and Iran, has been able to win back almost all the areas that had been controlled by insurgents. The terrorist group "Islamic State" (IS) has lost most of its former territory. Germany has been discussing whether hundreds of thousands of Syrian refugees currently living in the country could return to Syria. However, the Foreign Office still considers the situation in Syria too uncertain and a ban on deportations there remains in place.
But European governments are tired of the futile Syrian peace efforts. Some politicians talk, mostly behind closed doors, about coming to an arrangement with Assad despite all their reservations. In an interview with DW, Middle East expert Guido Steinberg of the German Institute for International and Security Affairs believes the German government should have handled the situation better. It recklessly "relied on the fact that the Assad regime would fall within a short period of time. If one had really wanted to overthrow the regime, one would have had to offer military support to the insurgents in some way. Today, Germany is no longer an actor in this conflict at all," says Steinberg.
The federal government is facing entirely different accusations in connection with the war in Yemen. According to the UN, this conflict is the most serious humanitarian crisis in the world. Germany has long supplied weapons to Saudi Arabia, which supports the ousted Yemeni government against the Huthi insurgents and is leading a military coalition to restore it. Even now, with a ban on arms exports to Saudi Arabia in place, German arms manufacturer, Rheinmetall, is allegedly continuing to supply arms to Saudi Arabia through subsidiaries.