Podcast: European unity vs Putin, energy shortages, & economic pain

TRANSCRIPT: European unity vs Putin, energy shortages, & economic pain

Christoph Heusgen:

We will have a very tough winter in Europe with the high energy prices. There may be some. The support may be lessening. We do have parts in Europe where the pro-Russian propaganda actually is setting in and is selling. But overall, I think we stand firm.

Ian Bremmer:

Hello and welcome to the GZERO World Podcast. This is where you'll find extended versions of my interviews on public television. I'm Ian Bremmer. And on this episode, we are looking at the tough year ahead for Europe, and escalating Russia-Ukraine War has mobilized much of Europe to Kyiv's cause, but it's also destabilized the region, bringing with it many economic, political, and social challenges. And they're going to be lasting long after the war's over, if it's going to be over any time soon. Out of this climate of fear and instability, the far right has become resurgent, making political gains in many national elections.

And then there's China, intent on reshaping the global order in its favor. It's a lot to chew on and chew I shall with German Diplomat, Christoph Heusgen, who served as this country's Ambassador to the United Nations and is now Chairman of the Munich Security Conference. Let's get to it.

Announcer:

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GZERO World would also like to share a message from VISA. The pandemic has dealt the world an almost generational setback in ending global inequality, but there are ways for technology to help get things back on track.

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Ian Bremmer:

Ambassador Christoph Heusgen, so nice to have you on GZERO World.

Christoph Heusgen:

Thank you very much, Ian, for having me.

Ian Bremmer:

First thing we have to talk about is the Russia War, and we're about nine months in now. Give me first your take on how you think this is going, on the ground for the Europeans, for the Russians? Quick view.

Christoph Heusgen:

Well, how much time do you have? First, on the war itself, it's going very badly for the Russians. They don't advance anymore. Actually, they have to withdraw from some parts. The Ukrainian military is much more motivated, better trained, better led and the Russians have problems.

What the Russians have turned now is to see if they can undercut the readiness of the population to support this war. They're destroying infrastructure. This is, by the way, war crimes. They're destroying infrastructure, they're destroying electricity and everything, but they totally miscalculate the Ukrainians. They miscalculated at the very beginning. Their resolve to fight back, to defend their country, is unbroken. They will continue to do that. Even the ethnic Russians, that the Russians pretend to protect from the Ukrainians, they're the toughest ones because they see what Russia does to the area where they live.

Ian Bremmer:

Where they lived.

Christoph Heusgen:

Yes, Mariupol or Kherson this is destroyed by the Russian, so this is going to go on number one.

Number two, the support for Ukraine continues to be very positive. I want to say American leadership has been key providing weapons to Ukraine. But it took some time for us Germans to do that. But the Ukraine's appreciate all the quality of our weapons of some others. So we support that. Again, I believe this will go on for some time. Putin is not ready to give in. Zelensky will continue to fight. So Putin tries also to undermine the resolve of the supporters of Zelensky.This is why he comes up with threats of the use of nuclear weapons. Everybody's scared, and this is why he's very active in the Global South to spread his narrative. It's the West that is responsible for the high energy price or the high price of grain. So he's using that. But so far so good. We got fantastic votes at the UN General Assembly, 141, 143 votes. So that's where the support for Ukraine stands.

Ian Bremmer:

So we've just talked a little bit about some of the things that Putin has escalated when the war's not working out for him. For example, he's hitting civilian infrastructure. There's lots of war crimes. He's talking about nuclear weapons. All that's escalatory. And yet on a couple of occasions at least we've seen that when his bluff has been called, he hasn't done very much at all. So for example, Finland, Sweden invited to join NATO. He said if they do that, there'll be military consequences. They did that. No military consequences. Says he's going to cut off the grain deal in the Black Sea. The Turks say they'll still facilitate it. The Ukrainians keep sending the ships through and the Russians back down and almost immediately say, no, no, no. Okay, we'll stick with the deal. Do you see any signs as this war continues to go badly for the Russian military on the ground, that Putin might actually be showing some signs of wavering more broadly on the war?

Christoph Heusgen:

I don't see this. I think that Putin is determined to see this through. There maybe tactical moves he sees, by the way, which is very positive on the grain deal. He sees that his narrative, well, the West is responsible for this. The Africans don't buy this anymore. So he recognized that he had to carve in, but I don't see right now that he's ready to give in. So he will continue. As I said before, he thinks that the West is weak and that also Ukraine at some stage cannot withstand the aggression by Russia. He's wrong, I think. But the problem is the human suffering continues.

Ian Bremmer:

Where is the West weaker? Is it among the Europeans with the economic hardships this winter, next year, difficulties on energy, some governments that seem like they might waiver? The Italians, for example, even the Germans perhaps, or the United States, where you start to see both on the progressive left and the Maga right, some shakiness about why you'd want to spend all this money on a war that's very far away?

Christoph Heusgen:

Putin watches this very carefully.

Ian Bremmer:

Sure.

Christoph Heusgen:

Of course he hopes for this. He hopes that after the midterms or in the US or after elections in other countries, this resolve to support Ukraine will weaken. So far it's not happening. We have seen in Italy where you have a kind of populous government that the new prime minister stands firm on it. In Germany, we have polls while they say, yes, we are suffering and higher energy price, but the resolve is still there to support Ukraine. But there's no guarantee. We will have a very tough winter in Europe with the high energy prices. There may be some, the support may be lessening. We do have parts in Europe where the pro-Russian propaganda actually is setting in and is selling. But overall, I think we stand firm.

Ian Bremmer:

But what's the area that you're most concerned about in terms of wavering over the next six, twelve months, let's say?

Christoph Heusgen:

Well, it's what I said, energy prices. If governments...

Ian Bremmer:

So it's Europe?

Christoph Heusgen:

It's Europe. Yeah. No, it's Europe. It's Europe. It's when energy prices go up and if governments don't succeed in having targeted support to those small businesses, to those people who have low salaries, all of a sudden are confronted with high energy bills, there may be some opposition. But overall, I think this will hold. In the US, I think that having talked to congressmen and senators from both aisles, my impression is the support for Ukraine will be there. There is of course during the election campaign, there is some talk about why should we support Ukraine? We should rather put the money on the, I don't know, the US Mexican border or something. But overall, my impression is that the support for Ukraine is firm.

Ian Bremmer:

Now, a quote from you, which is, "The end of Putin's regime is going much faster." How much is that wishful thinking? How much are there actual indications that there is a level of weakening of Putin's own regime internally?

Christoph Heusgen:

You see that there are cracks. You see that it's not as coherent as it was before. The military is criticized heavily also from the establishment. You have seen that hundreds of thousands of Russians have fled the mobilization. People are not happy. Putin promised that there will be no general mobilization. Basically, he went through it. At the beginning, he took people from the outer regions of Russians, minorities. Now it derived in Leningrad, it derived in Moscow. So there is some uneasiness. I would not say it's at a turning point, but remember there is a certain history in this country. Khrushchev was replaced. Gorbachev was replaced. If this continues and people see how their living standard is going down, this may change, but it's not going to happen in the next few weeks.

Ian Bremmer:

It's near term.

Christoph Heusgen:

It's near term. Because at the same time, what you have seen over the years is that Putin has systematically, basically killed opposition leaders or poisoned. He has really stopped all NGOs from working and the media. The media, the Russians are indoctrinated. And you see this even in places. Even in my own country, you have places in Berlin where they have a strong Russian community and they believe they're Russian narrative.

Ian Bremmer:

Now I have to ask you about the Nord Stream pipelines. Nord Stream 1, Nord Stream 2 cost billions of dollars, billions of euros to build Russian pipelines. They of course weren't operational, but suddenly they blew up. It's been several weeks, several different investigations going on by the Europeans. We have heard nothing. What do you think the status of that is? If you had to put your money on it, who actually was behind it and why?

Christoph Heusgen:

Well, there are several options of course. You look at the different countries and you see what would be the motivation behind it? And how it's difficult to say. I would say countries that have always been against it, from the West, so to speak. If they would be caught blowing up the pipeline, this would really create huge tensions within the-

Ian Bremmer:

The coalition.

Christoph Heusgen:

... the West and the coalition. So my guess was the Russians. I think that they just to destroy, to demonstrate what they can do, what they're ready to do to destroy infrastructure. But this is just my guess.

Ian Bremmer:

If we get no indication, no evidence of that from the investigations over the coming 2, 3, 4 months, would that change your view?

Christoph Heusgen:

No, because I know that objectively it's going to be very, very difficult to do this research. It's I think 100 meter below the surface, you see something blown up. It will be very difficult to find out. But maybe at some stage they find out what the explosives are where, you can put it. But even there, you cannot be sure that one didn't use the explosive of somebody else. So...

Ian Bremmer:

If I'm going to be devil's advocate, if it's that difficult to figure out who it was, then your initial argument about why the traditional actors that really don't like these pipelines wouldn't do it starts to decrease.

Christoph Heusgen:

Well, we see. I think it's also with timeline. In the end it's not that important. So I don't think that this will make that in the end a big difference when they find out.

Ian Bremmer:

The reason I think it's interesting and important potentially, and I want to know your view on this, is because if it turns out that it was the Russians and they are blowing up these two pipelines and there's in international waters, by the way. And there's no consequence for it, well then why wouldn't they keep doing it?

Christoph Heusgen:

Yeah.

Ian Bremmer:

So there is that, right?

Christoph Heusgen:

No, there is that. And this brings me to one point, which is very important and this is accountability.

Ian Bremmer:

Right.

Christoph Heusgen:

We see Putin committing war crimes, crimes against humanity. What they have been doing from day one, even when you see how they take population out, when they make young people being adopted, it's close even to genocides efforts. So I think we need to work very hard on accountability, because if we don't somehow succeed to bringing those people into justice who were responsible for this, this may be other people who have again, ideas to do it. And I think we have to defend the international rules based order, the charter of the UN, and if we allow this, we are going to end up in the jungle.

Ian Bremmer:

And from your perspective as the last Russia question, no Russian government officials are going to be invited to participate in the Munich Security Conference?

Christoph Heusgen:

No. We know the officials, those who have not left Russia, they sit on the same ship there and they will just use a forum like the Munich Security Conference for propaganda. You cannot seriously discuss with Sergey Lavrov. We heard this also from friends here at the UN. The guy, you cannot talk to him anymore. So why give him this platform? What we want to do though is to have a discussion about Russia with Russian opposition leaders, with exiled Russians. Maybe we get some people out of Russia. There have been Russian Nobel Prize winners. So we have to have a discussion on Russia and what people believe Russia after Putin will look like.

Ian Bremmer:

So I lied to you. One more Russia question. Which is given that view on, well, we know what they're going to say, they're just propagandizing on public stages, but on private stages, do you support people like President Macron continuing to reach out and trying to engage with Putin in terms of negotiations directly?

Christoph Heusgen:

Well, I think that you have to try and see is there an opening? So to give him a way out, I don't think right now he's ready for it. But from time to time to give him a call and see is the guy ready and does he look for a way out? So can we give him a hand on there? But so far I think Macron has tried a lot and has not succeeded anyway. It goes even further. I mean, Macron worked very hard while Putin at the same time put his Wagner troops back in the Sahel, in traditional French zones of interest-

Ian Bremmer:

The French were pulling out, of course, yes.

Christoph Heusgen:

The French were pulling out, the Russians were pulling in. And so, I don't see that right now. There is a chance, but one should not totally isolate him.

Ian Bremmer:

So, when we talk about China, of course, as you and I are speaking right now, your German Chancellor, Olaf Scholz is literally on his way. It's going to be his first trip as Chancellor to meet with Xi Jinping, and he's also bringing a number of German CEOs with him. That's a very different message than some in the German government like the foreign minister would want him to deliver. It's also a very different message than you're hearing from the United States right now. Talk about what the German Chancellor is thinking when it comes to the China policy?

Christoph Heusgen:

I don't know what he's thinking. I can only tell you my assessment of the situation. Number one, I believe it's important that a German chancellor talks to the Chinese President. Now a few weeks after the party congress, the right moment to do it, one can doubt it. Is it at a time where everybody in Germany, outside Germany is warning Germany from getting dependent again on one country like our dependency energy on Russia, dependency on trade on China? Is it the right signal to send the CEO group with the chancellor? I have doubts that this is the right thing to do at this stage. Also, I regret a bit that the chancellor didn't take up the offer of the French President, Macron...

Ian Bremmer:

To go together.

Christoph Heusgen:

To go together. I think that would've been a strong political statement. We stand together, Germany, France, and we tell you, listen, we are in favor of a ruled space international order, and we want you also expect from China to also to support that.

Ian Bremmer:

Do you think that the German government generally trusts that the French would be aligned on not just that message, but also cutting side deals from an industrial policy perspective? I mean there are a lot of German and French companies that are actually competing in terms of access to the Chinese.

Christoph Heusgen:

Yes, I mean it happens differently anyway, but you can imagine a trip where you just talk politics and you don't talk about economic measures or business opportunities. We are at a stage where with the Russia invasion. We are an inflection point where a lot is at stake. And to talk to somebody who is close to Russia, I think it's important.

Ian Bremmer:

Now, just before the trip there was a big announcement about Cosco, major Chinese state-owned organization that is taking a big investment stake in the Port of Hamburg where of course German Chancellor Scholz was previously mayor. Again, thoughts on does he not see China as a strategic competitor? Is he not worried about him? I mean certainly his view is very different than that of the Biden administration. Where do you think Germany is going on China?

Christoph Heusgen:

Yeah. No, again, this is something that one wonders why this is happening right now after the party congress, which made it clear that we have a different China, we have a totalitarian China. There is no more diversity in the standing committee. It's all one line. And basically Xi has returned to the age of Mao Zedong as the strength that he shows. So at this stage to do this deal, since I think the wrong message, the argument is it's not the harbor. It is part of the harbor and only part of one part of the harbor. But still it sends the wrong message. It sends the message that we just pay a price for over dependency on one country and now we enter into a relationship with another country where we know that they use economic leverage for political gains. So therefore it's a questionable decision.

Ian Bremmer:

Is the German industrial lobby just overwhelmingly strong on these issues? Because they're getting pummeled on high energy prices. We hear from BASF, from Volkswagen that it's just hard to be competitive on the ground right now, given the energy price differential. I mean, I can understand how they would be reluctant to pick a fight with the Chinese at the same time as Germany is potentially heading into a bit of a recession.

Christoph Heusgen:

Yes. No, this is the argument. But when you look at the German business community, you have totally different views. You have the companies that you mentioned to continue to bet on the Chinese market. They also believe that the investments, the number of jobs they supply to China, the market in China where they supply their cars and chemicals, et cetera, that it's so important that for China to stop that is unthinkable. They would harm themselves. But then when you look at small and medium enterprise, overall they have become very skeptical. So the small and medium enterprise, they have seen how more difficult going is, they are witnessing how the Chinese dual circulation theory is actually taking place where small enterprise see how hard it is and how they're copied.

Ian Bremmer:

Because it's more domestic focus in terms of-

Christoph Heusgen:

Exactly. So the German industry is divided on this. The few big ones are continuing to bet on the market and the others become much more skeptical.

Ian Bremmer:

Okay. Before we close, we've talked about Russia, we've talked about China. We haven't talked so much about the German government itself and how you see them performing vis-a-vis the EU as well as for the German people. Anything that surprised you in this first year from Scholz internally?

Christoph Heusgen:

Well, first of all, I must say the start was a very promising one. They really kept everything secret when they did their negotiations. Usually things are leaked to improve your position. So they were off to a very good start. But now...

Ian Bremmer:

The coalition building.

Christoph Heusgen:

The coalition building. It's a coalition of social democrats, of greens and the liberals, which usually they're not a natural match. So they were off to a good start. But now with the pressure mounting with difficult decisions to be made on several issues, you see how this construction is cracking and the atmosphere is not the best. You have criticism no longer being only voiced internally, but publicly, and that's not good. We don't need at a time where of these kind of challenges that we face, energy price rising, inflation in general, war in Ukraine, we need a German government that has a strong coherence.

Ian Bremmer:

And in terms of Germany's relationship with the EU, do you think that that is mostly aligned with where it was under Merkel? I mean, certainly the EU seems to be getting stronger over time. Do you buy that and do you think that Germany's role in it is unchanging?

Christoph Heusgen:

Well, Germany in general knows that Germany cannot cope with the challenges we have worldwide by ourself. We need the European Union, we invest in the European Union. But of course, in the European Union, difficult decisions are taken. And this has been always the case that then you argue with the commission, with the commissioners and see what is the right outcome. I think this hasn't changed. We need a strong European Union and this is what the government is committed to.

Ian Bremmer:

Christoph Heusgen, thanks so much for joining us.

Christoph Heusgen:

Thank you.

Speaker 4:

That's it for today's edition of the GZERO World Podcast. Like what you've heard? Come check us out at gzeromedia.com and sign up for our newsletter Signal.

Announcer:

The GZERO World Podcast is brought to you by our founding sponsor, First Republic. First Republic, a private bank and wealth management company, places clients needs first by providing responsive, relevant, and customized solutions. Visit firstrepublic.com to learn more. GZERO World would also like to share a message from Visa. The pandemic has dealt the world an almost generational setback in ending global inequality. But there are ways for technology to help get things back on track. Visa and GZERO Media have partnered to explore the ways in which digital tools can help close the global equality gap. Visit Gzeromedia.com/closingthegap to learn about the crucial role remittances, digital trade, and the shift away from cash payments can play in empowering underserved groups to participate in the global economy.

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