The Munk Debates Podcast - Friday Focus: Germany – Japan

Episode Date: February 10, 2023

Friday Focus provides listeners with a focused, half-hour masterclass on the big issues, events and trends driving the news and current events. The show features Janice Gross Stein, the founding director of the Munk School of Global Affairs and bestselling author, in conversation with Rudyard Griffiths, Chair and moderator of the Munk Debates.  The following is a sample of the Munk Debates’ weekly current affairs podcast, Friday Focus.   On this week’s edition of the Friday Focus podcast, Janice and Rudyard step back from day-to-day international events to go deeper into the futures and fates of two nations that exemplify the pressures and changes the current geopolitical environment is forcing on countries around the world. Japan and Germany share the history of being defeated WWII powers that rose in the intervening decades to become economic powerhouses. As great power tensions soar, they are being forced to choose sides and abandon longstanding policies of non-aggression and demilitarization. Where does this all lead? And what do countries like Japan and Germany say about the future of geopolitics? To access full-length editions of the Friday Focus podcast, consider becoming a donor to the Munk Debates for as little as $25 annually, or $.50 per episode. Canadian donors receive a charitable tax receipt. This podcast is a project of the Munk Debates, a Canadian charitable organization dedicated to fostering civil and substantive public dialogue. More information at www.munkdebates.com.Become a Munk Donor ($50 annually) to get 72-hour advanced access to the full length editions of Friday Focus and Munk Dialogues. Go to www.munkdebates.com to sign up. Hosted on Acast. See acast.com/privacy for more information.

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generous contribution. Hello Friday Focus listeners. Roger Griffiths here. The Chair of the Monk Debates. Welcome to this. Our weekly program digging into the big issues and ideas. as in the news. We do this each and every Friday with Janice Gross Stein, the founding director of the Monk School of Global Affairs, internationally renowned scholar and author. Janice, great to be in conversation with you. Great to be here with you, Roger. We're going to do something a little bit different on today's show. Instead of dissecting the week that was as fascinating as it was, we want to go pull back a

little bit and try to think about, maybe something we'll do throughout the year, think about countries and geographies right now that are undergoing changes that kind of help us understand this geopolitical and international moment that we're in the forces that are play. And who knows, maybe even what the heck might happen. And you and I have been talking over the last couple weeks, Janice, about the extent to which Germany and Japan are fascinating kind of case studies. kind of twinned countries in an interesting way. We can unpack that. And that by exploring what's happening in those countries and to those countries and how they're responding to this geopolitical

moment, there's maybe some interesting clues that we can divine about what happens next. Just give us your thesis on this. Well, you know, let's start with Germany, Roger, which is an amazing success story, frankly. Shattered by World War II, divided. was able with support of the United States and the kind of grudging support of the then Soviet Union to reunify and undertook some really tough economic reforms, really tough economic reforms, and then designed a strategy for growth that was based on. privileged access to cheap Russian energy and really great access to the Russian to the Chinese export market as well as

using the euro to benefit from selling into poor European countries. That's been the German economic miracle in two or three sentences. When you say it that way, it sounds a little different from the way Germans would describe it. But that really has been the success story. And they have never let their

manufacturing base rust. They've updated. They've modernized it. They are high precision manufacturers. And they genuinely sell to the world under very favorable terms. Well, Russia invades Ukraine. And a new chancellor with no experience, this was Angela Merkel's doing really this strategy. A new chancellor comes in and says, oh, my God, a Zaytn vendor, which means a sharp turn, a change, a sharp change. This model doesn't work if you don't have cheap access to Russian energy. And let's build in the second big problem, as the United States is tightening. its competition with China, that big export market, which Germany had sold into and done extremely well, China was Germany's largest trading partner, not the EU, China. That's at risk

too. And that is just a fundamental shock to the German economy, to German society, German politics. And I think Olaf Schultz in some sense has been reeling ever since. You saw him lag, lag, lag in the discussion of tanks. Last week it was painful to watch. He needed Joe Biden to lead before he could move. And so the German press call him the laggard chancellor, some of them. And I guess the final piece here, Roger, to talk about is much of the German public are pacifist. they still carry with them the weight of what they did.

Their government did not they. Their government did in the Second World War. And you saw it explode in the German past, the idea that German tanks would roll through Ukraine. This, right, that evokes a memory for them of World War II, which frankly no other country in Europe has. This is a genuinely divided, troubled society as it leaves behind something that worked really well. And because the world changed, they have to devise a new path forward now. I've heard from people who have traveled recently in Germany that there's a real division between eastern west when it comes to perceptions of the Ukraine war. And in eastern Germany, it is decidedly unpopular.

there is very little support for this war and for, for instance, things like sending, you know, leopard tanks to Ukraine. And it's interesting. I think that may explain from the outside what looks like a kind of bizarre and at times unfathomable, you know, hesitation and rectitude on the part of Chancellor Schultz and how Germany has generally approached this war, kind of hot and cold at various times. I sense Janice, there's a lot of divisions within Germany and that maybe of all the countries of the NATO alliance, this is the one where Putin can exert the most pressure in terms of potentially fracturing a consensus on this war within NATO. You know, I don't know how, you know, how long Putin's arm is now, how much he can reach in because what he, and the reason for that is, is, is, but what he has done, as you've said yourself, what he's done to civilian population in Ukraine

is just provoking revulsion in much of Europe. But that doesn't in Germany necessarily translate into support for the war. And that's a difference that the Germans will make, that nobody else will make. And the reason for that, as I said, particularly in West Germany, they still carry with them a historical memory,

even though they are not of that generation of German militarism. And there's almost nothing for them. That will justify a much more aggressive German posture. Schultz promised to increase German defense spending by 2%. Again, that is a massive change. up to meet the NATO requirement of 2%. That is a massive change in the German budget. Their economic model will not work now,

that they have to pay much higher prices for energy. So there is unct. There's worry. There's worry about the economy. There's worry about their society. And frankly, in East Germany, and there is still a division between East and West and social terms and economic terms for sure. As you know, Putin has appealed to right-wing populace all over the world.

And there is some of that, which is more heavily concentrated in East Germany. So there is lower support for what Schultz is doing. Now, you turn around, you roll off Schultz, that's your domestic challenges. They are huge, far greater than any that Angela Merkel ever faced. and Poland is screaming at you and the Baltic states are screaming at you. Don't you understand the message? We're going to transfer your tanks whether you authorize it or not. And Olaf Schultz looks out at a world.

He just simply doesn't know, Richard, and does what German chancellors have done for 70 years, looks to Washington and says, I will not be out in front of any U.S. president. And that's why we had that almost choreographed conversation where Joe Biden made a decision that he knew made no sense on the ground. I don't think those Abrams tanks will ever see action. He was all done to provide cover for Germany.

If Germany is a bit of an object lesson in terms of this geopolitical moment, at least as it factors in Russia, What does the future hold? What is the lesson that we could extrapolate from this? Is it that at the end of the day, you are going to get dragged, kicking and screaming, into a larger coalition, this movement. It's beyond Europe. It's a coalition of the so-called democracies. It's a concerted policy of the government in the United States and the administration of Joe Biden to ally, like-minded. democracies against their authoritarian competitors. Is that where this ultimately ends up?

I think it's a really interesting question. And it speaks to how big branch shoring and reshoring movement will ultimately turn out to be reddered because, you know, I'm a skeptic of that. and Adam Tuse just put some really interesting, really interesting data in his substack report, which shows, in fact, that we're not seeing a great deal of data change in which countries are trading with. Tell us who's Adam Tews. Adam Tews is an economist who has a substack publication. chart book it's called. He's the one. He's easy. He's the, um, the economist's desure of the moment,

uh, in the center left. He, he coined the term Pauley crisis. If you run across that one, which means we are in the middle of convergent crises coming at us. And Pauley Crisis made a big splash at Davos this year. Okay. If anybody wants to go and, and have a look. You'll find it. But I think he's right on this, that the restructuring of the global economy is less than we think. But I think for Germany, the challenges are different. What is clear, they can never make themselves dependent again on Russian energy in the way that they were. Where they are wholly dependent on it, Radyard.

That's a lesson that I think every European leader has learned as a result of this. and there's going to be a restructuring of global energy markets coming out of this war. That one's done, I think. There's nobody, no developed countries that's going to make themselves vulnerable. The bigger question of Germany's future, how much you sell into the Chinese market? Because you can't sell a lot still. That's my point. The Chinese market is not going to be shut down for very high-end, advanced,

precision manufacturing, which has military implications. Look at all those qualifications. There's going to be restrictions. But the Chinese market will come back and be open for business. And, you know, world which has had this kind of security shock, how does Olaf Schultz maneuver between the United States and Beijing? That is a huge challenge for him going forward. Perfect. Let's pause there and come back on the other side of the break to talk about our other case study, Japan. There's some similarities with Germany, but also some fascinating differences. There are signposts as to what this new world is that we're in and the forces that will define it. Back right after this break. Thanks for listening to this excerpt of the Friday Focus podcast to get full-length editions of each and every episode of this. program, simply go to our website,

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