Germany kick-starts work on a new White Paper

Every few years, the German government defines its security policy guidelines in a so-called White Paper, which receives its name from the colour of the document's cover. The last edition was published in 2006 and before that, in 1994. In a globalized, rapidly changing world, such lengthy intervals turn White Papers into much more than just sequels. In 1994, just a few years after German reunification, security policies were put on a new footing. The 2006 analysis was influenced by the 9/11 attacks on the US - and their consequences. At the time, security policies were attuned mainly to Afghanistan. Russia was defined as a partner; the Arab Spring and the emergence of the "Islamic State" (IS) terrorist militia were still in the distant future. 2015 sees a changed world: war rages in Ukraine, Russia and NATO eye one another like they did when the Iron Curtain still stood, and Germany is delivering weapons to the Kurdish Peshmerga fighting against the 'IS.'

A new White Paper is "overdue," according to Defence Minister Ursula von der Leyen. Redefining the relationship with Russia is one of her goals. Germany, she warned, should not give in to illusions: Vladimir Putin is resorting to dominance and spheres of influence to replace internationally agreed rules and guaranteed rights. "The Kremlin's new policy began long before the crisis in Ukraine and will occupy us for a very, very long time to come," she added. Speaking at a conference in Berlin to launch the compilation of the planned White Paper, the defines minister also underlined the importance of finding ways to re-establish a reliable neighbourhood with Russia at some point. Over the next year and a half, more than 200 internationally-renowned politicians, researchers, media and industry experts, Bundeswehr and other NATO armed forces are scheduled to debate Germany's future security policies in workshops, at conferences and hearings. Germany's new White Paper is due to be published in the summer of 2016.

Public opinion is of interest, too. Citizens can offer ideas, suggestions and criticism in a forum on a special website. "Germans have been complaining for a long time that there is no real political debate on security policies and the role of the Bundeswehr that is not linked to concrete crisis situations," Ursula von der Leyen said. The new White Paper offers that opportunity, she added. Chatham House director Robin Niblett told the conference that the public debate is immensely important. "I'm fully aware that domestic opinion in Germany is highly sceptical about Germany playing a proactive role and about thinking of itself as a mid-sized power, never mind a mid-sized great power," he said. To persuade the public, he urged German leaders to be "consistent in their messages, about the inescapability of Germany's shared responsibility to meet the dangers of today's interdependent world." Volker Perthes, Director of the German Institute for International and Security Affairs (SWP), used the term "regulatory force."

Germany, he said, must be seen as a "responsible mid-sized power that protects and develops, along with others, the European and global order". On the one hand, Germany is too small for the globalized world, he said, adding that it depends on multilateral cooperation. At the same time, politicians have recognized that the country is too large to "simply duck in the face of threatening international developments, or to fill functional niches." Germany isn't trying to seem larger or smaller than it is, the defines minister argued. The country is prepared to take on more responsibility, she said - but that doesn't entail a "rigid catalogue for operations or a checklist for missions abroad." Armed Bundeswehr missions will no longer generally be excluded in the future, von der Leyen said, adding that each crisis and every conflict would be closely evaluated and as a result, operations might differ. The White Paper is set to define the basic capabilities the Bundeswehr needs for an evolving modernization process, and to match demand with its abilities.

Germany must be a reliable alliance partner, von der Leyen urged - and that includes modern arms procurement, up-to-date personnel policies and an adequate budget. She reminded the conference that over the past years, German troops have faced fundamental change: conscription was discontinued, reforms "left not a single structure untouched" and in addition, the armed forces are beset by severe problems with military equipment. The White Paper is to be divided into four sections. Apart from the future of the country's security and defines policies, partnerships and alliances will be on the agenda. What are the possibilities, necessities and boundaries in the EU, NATO, the OSCE and the United Nations? "I believe that in the coming years, we will experience the interconnectedness of our international alliances and organizations, even beyond the customary security architecture," von der Leyen said.

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Grexit comes down to Germany, not Greece

The chances of a Greek exit from the euro zone are roughly 20 percent, but the outcome will be driven more by internal constraints in Germany than factors in Greece, Eurasia Group's senior European analyst told CNBC on Tuesday. "Angela Merkel, the German chancellor, is clearly playing Greece very, very aggressively for a set of domestic reasons. You saw state elections in Hamburg on Sunday. Her party got completely trashed in that context," Mujtaba Rahman said in a "Squawk Box" interview.

Talks between Greece's new government and European finance ministers stalled on Monday. The parties now face a series of deadlines this week to reach an agreement on the terms of the country's bailout.

In the worst case scenario, negotiators fail to reach an accord on the current bailout program or to forge a pathway toward a new funding plan for Greece, Rahman said. With no backstop, Greece would run into funding challenges in mid-March and would likely see more flight of deposits, which could lead the country to impose capital controls, he added. However, he does not see that situation playing out.

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Germany's reputation has been damaged

The acrimonious debate over Greece's financial plight has tarnished Germany's reputation for years to come, says British economist Dennis Novy. Wolfgang Schäuble's stance is "like stone age, climate change denial." We can't see what's happening behind the scenes, but on the surface it does look quite bad I have to say. We've seen lots of posturing on both sides ever since the new Greek government has come in. They clearly have strong mandate - but they want something from the rest of Europe. They want to make a point - they want to make clear that the old ways of doing business are no longer acceptable. The downside of course is that they alienate everyone else in the European Union. On the other side, you also have a lot of horrendous posturing - people plainly ignoring that there has been an election in Greece and the people there really want a change. In terms of substance, the picture is a lot clearer. The economic proposals the new Greek government is putting forward are quite middle-of-the-road sensible policies. The facts are, from an economic point of view, Greece will never pay back that kind of money, the current economic situation in Greece is not sustainable, and there needs to be a change, and the policies of the last five years - the troika-imposed austerity program - is a complete failure. When it comes to policy, it's quite difficult to get something to fail even more - the evidence is just piling in. So on the substance, the Greek government is actually very sensible.

DW: Has austerity failed?

DN: We've had austerity in many countries - not only in Europe but in other countries as well. A lot of people argue that if you make cuts then the economy is going to recover. Our textbooks say that if you cut in times of adversity, when everybody is down, you're just going to further the slump, it's just going to get even worse. And it turned out exactly that way. The further you cut, the bigger the slump - this is no surprise" There's been quantitative easing by lots of monetary authorities, definitely in the US, but also in England, and now the ECB is starting it, and there are lots of other programs along those lines. People have said if you print money it's going to lead to massive inflation, and what we've seen of course is that inflation has been sliding down. Even if you strip out the recent drop in the oil price, core inflation has also been sliding down. The evidence that austerity has failed is just overwhelming, and anyone who says the opposite now is a bit like a climate change denier - it's that kind of debate that we're having. In the face of the obvious, can you still deny what's going on. But the politics is invested in it, and now Germany is essentially arguing like a climate change denier.

DW: Should Germans be more worried about Greece's exit from the Eurozone?

DN: I think it would be hugely damaging to Germany if Greece left the Eurozone. Even if you take a really narrow-minded view and just say, 'I don't really care about Greece, I don't really care what happens down there, I just care about Germany,' the austerity policies happening in Greece are hugely damaging to Germany. You can't see that so clearly, because the German economy is doing well, but they would be doing much better if the rest of the Eurozone was doing better. The Eurozone is their biggest export market by a mile. The reputation of Germany has been so damaged, this will not recover in a couple of years, and this will take a generation. The integration of Europe was very much a German project - this is decades and decades of hard work, putting Germany in the centre of European politics, a lot of that has gone down the drain when it comes to these countries affected by these failed policies. There's a huge damage in that as well, but you don't really hear that in the German media. What you hear are these morality plays - 'oh yeah, Greek people are lazy and they don't pay taxes,' which is so wrong on so many levels. It's a really appalling act of failure of leadership - there is very little leadership in Germany, where politicians say, 'Listen, this is what's going on, the stories you've been hearing in the media are not quite correct, and we have to bite the bullet here a little bit. It's in our national interests.' That kind of argument is completely lacking in Germany. Wolfgang Schäuble - some of the things he says in the media is like Stone Age, climate change denial type of thing - it's really horrendous and the costs are gigantic, even for Germany.