1 Trade and the resilience of détente
Helmut Schmidt and the economic dimension of Ostpolitik, 1974–1976
Helmut Schmidt and the challenges of détente
At first sight, history played a trick on Helmut Schmidt. It is often argued that history denied Schmidt the opportunity to leave a lasting legacy. Adenauer is remembered for Germany’s Westbindung, Willy Brandt is associated with Ostpolitik, Helmut Kohl will always be remembered for bringing about Germany’s unification. What is Helmut Schmidt’s legacy? Was he a mere crisis manager lacking a broader vision? Is Schmidt destined to go down in history as a “transitional figure”?1 This clichéd image persists to this day. In fact, Helmut Schmidt had a clear conceptual framework for sustainable diplomacy, and he had a sense for Germany’s past and for its future. The 1970s were not merely a transitional phase but a period of profound transformation in which Schmidt was able to play a significant part. Schmidt made a crucial contribution to the longevity of détente in Europe.
His 1974 Moscow Summit was a case in point. It provided Schmidt the opportunity to give fresh impetus to the ensuing network of contacts with the Soviet Union and it leadership. Some new movement was strongly needed. When Schmidt had risen to the chancellorship in May 1974, Ostpolitik’s initial bust-and-boom phase had already been superseded by the tedious day-to-day business, entailing plenty of pitfalls. Leonid Brezhnev had supported Willy Brandt, facilitating the latter’s determination to pursue Ostpolitik against considerable domestic opposition in the Federal Republic.2 Brezhnev had developed trust in Brandt’s capacity to work for a normalization of relations. Both had come to like each other since the days of their private talks in Oreanda on Crimea in September 1971.3 The relationship between Schmidt and Brezhnev was different. Both got to know each other on the occasion of Brezhnev’s 1973 visit in Bonn. It had been a remarkable experience: Schmidt and Brezhnev had engaged in an emotional discussion on the atrocities of World War II. Both had been soldiers, both shared the abhorrence of war, and both developed the capacity to read and to understand each other. From Schmidt’s vantage point, “Brezhnev was not an enemy, but an understandable human being and thus a respected opponent.”4 Soon after his move to the chancellorship, Schmidt sent Brezhnev a personal letter looking back to the 1973 conversation. On 16 May 1974, Schmidt wrote that he “kept their evening encounter in good memory and that he was glad to have met not just a mighty man, but a human being.”5 On 20 May 1974, Schmidt received Brezhnev’s first personal message, including the invitation for the visit that finally took place in October 1974.6
Schmidt believed in the virtue of adept personal diplomacy, and he was glad to maintain the backchannel to Brezhnev that he inherited from Brandt. Schmidt sought a personal relationship with Brezhnev, and his conviction was that personal trust made it possible to disagree, to understand why, and to continue the search for mutually beneficial cooperation. In December 1969, Brandt had his chief foreign policy advisor Egon Bahr establish the secret line of communication in an effort to probe the chances for a renunciation of force agreement with the USSR. The backchannel turned out to be invaluable in Bahr’s negotiations, leading to the rapid conclusion of the Moscow Treaty in August 1970. Bahr’s counterparts were Valeri Lednev and Wjatcheslav Kevorkov. As we now know,7 both were KGB. Lednev worked under the cover of a journalist for “Sovietska kultura” and Kevorkov was a KGB general operating under direct guidance from KGB Director Yuri Andropov, who was the driving force behind Brezhnev’s détente policy in Europe. Bahr considered the channel “indispensable” for Ostpolitik’s success.8 The secret line of communication with Lednev and Kevorkov brought entirely new insights into the Soviet decision-making process. Kevorkov pointed out that, “initially, Brandt and Bahr struggled to find their way in the Moscow’s labyrinth of power. Our main task in the first stage was to assist them in an effort to find the shortest and the most productive way.”9 In a nutshell, the backchannel was invaluable. As Bahr pointed out, “Even in retrospect, it is a frightening thought to imagine us having talks with Brezhnev or Gromyko or Kossygin or Ustinov limited to official contacts and dependent on bureaucratic mechanisms.”10 Helmut Schmidt thought the same way. He asked Bahr to stay on and to manage the backchannel. Brandt’s and Bahr’s close personal rapport had enabled them to handle the channel without much written evidence. However, Helmut Schmidt had to find his own distinctive style in his contacts with Brezhnev. Thus, he wanted written reports on Bahr’s meetings with Lednev and Kevorkov. Schmidt saw Valeri Lednev clearly more often compared to Brandt. Only thus could the channel be continued.11
Back in 1974, the expansion of energy imports from the Soviet Union was the top priority in the preparations for Schmidt’s first visit to Moscow in October 1974. The visit brought two immediate results: First, Schmidt and Brezhnev signed a new framework agreement over the expansion of economic cooperation. The accord had a duration of 10 years and prolonged the agreement that had been signed on the occasion of Brezhnev’s visit to Bonn in 1973. Second, both sides signed the third gas and pipeline agreement.12 Schmidt considered the political dimension of Eastern trade more important than its economic aspects.13 In August 1974, he invited his top economic advisors to discuss trade relations with the USSR. There was agreement over the importance of large-scale projects: Schmidt’s foreign affairs advisor Carl-Werner Sanne argued that spectacular showcase projects were both “a political and a psychological necessity for Brezhnev.”14 By 1974, Osthandel had reached new dimensions: there were 30 major projects, and the overall investment was about 20 billion deutsche mark. Energy trade remained the core business, and Bahr argued that the expansion of Soviet gas deliveries could be used to finance industrial projects across the board.15
From Schmidt’s vantage point, the 1973 oil crisis highlighted the need to diversify West German supplies: Schmidt was eager to use the expansion of natural gas trade with the Soviet Union as a platform for the consolidation of Ostpolitik. A barter exchange for the benefit of both sides, the first gas and pipeline deal between the Federal Republic and the Soviet Union had been sealed in 1970. The Soviet Union obtained Western loans and Western equipment to construct a new pipeline, and it serviced the credits with gas deliveries totaling three billion cubic meters annually. The 1970 gas and pipeline business was mutually beneficial: it endowed the Soviet Union with West Germany’s technical know-how, West German steel, and West German financing to construct a pipeline to transport previously inaccessible Siberian gas to West Germany.16 Moreover, the gas and pipeline deal was an enormous domestic success for the Brandt administration: West Germany’s export of high tech and steel pipes were appreciated as a means of maintaining jobs for thousands of German workers. Natural gas imports were advertised as “diversification” of energy imports, creating stable energy prices and as reliable means of making Western Europe less dependent on imports from the fickle Middle East.17 Thus, Schmidt saw Soviet energy trade as a means to respond to the global energy crisis and the sudden challenge to Western prosperity from the cartel of Middle East oil producers.
At the same time, Soviet trade had enormous political relevance. Trade was more than a mere matter of business. Schmidt saw the expansion of trade as a stabilizing and trust-building instrument of Ostpolitik. Talking to Brezhnev at their October 1974 summit meeting, Schmidt emphasized: “If two countries have a relationship of economic interdependence, they won’t go to war against each other.”18 Schmidt conceived pan-European energy trade as a means to turn Ostpolitik into an irreversible process. Early on, Schmidt gained the impression that Brezhnev and Prime Minister Kossygin regarded the Soviet Union’s economic modernization as their primary task.19 Trade had bold implications. In February 1973, Kossygin told German Minister of Economy Friderichs that the era of détente had paved the road to a more attainable peace. He emphasized that the “the foundations of economic relations had changed.” The Soviet authorities had come to abandon the idea of economic autarky. “One could risk the widest possible cooperation.”20 Indeed, Egon Bahr saw trade as a crucial way to work for changes. In 1973, he made the point that the diminishing weight of the military confrontation in Europe would highlight the relevance of political and economic factors in one’s relations with the Warsaw Pact countries. Thus, over time, soft power would be more relevant than military power. Bahr argued that a carefully planned expansion of economic East–West relations would increase the internal inconsistencies in the Communist countries, contributing to further modifications of the Communist system. The awful suppression of the Prague Spring before his eyes, Bahr conceived any change as gradual change. Over the short and the medium term, trade stabilized the Communist regimes. Thus, from Bahr’s vantage point, the West was to make sure that the emergence of change did not culminate in an explosive and uncontrollable reversal.21
In addition, trade entailed another dynamic element: From Schmidt’s perspective, Soviet trade was key to buy as many Germans out from Eastern Europe as possible. It was a lever to buy the Soviet Union’s consent for the perforation of the Iron Curtain and the expansion of societal contacts between the Federal Republic and East Germany. Economic interdependence across the blocs facilitated the expansion of human contact, which was essential for the increasing dynamics of transformation within Communist societies. Thus, trade was an asset in the efforts to pursue Ostpolitik as an open-ended strategy for Europe’s transformation and Germany’s unification. For the time being, trade and credits helped to buy human contacts, which were decisive to remain a sense of “Germanness.” The concept was that the both Germanies would come closer and closer to each other in economic, cultural and social ways, in the movement of people. East Germa...