German Finance Minister: Iran nuclear deal protects Israel

Olaf Scholz Photo: ASAP Creative Shutterstock

Minister of Finance and Vice-Chancellor Olaf Scholz tells "Globes" that the lesson Germany learned from history is that we should try to reach agreements.

"There are no economic interests behind our attempt to preserve the nuclear agreement with Iran ..... it's a way for us to protect Israel," German Minister of Finance and Vice-Chancellor Olaf Scholz tells "Globes" on the eve of the visit of a German delegation to Israel led by Chancellor Angela Merkel. The visit will focus on inter-governmental consultations tomorrow in Jerusalem. In his first interview with an Israeli newspaper, Scholz gives reasons for his country's battle in favor of the nuclear agreement and reiterates Germany's commitment to Israel's security, including by supplying submarines "that will enable Israel to defend itself."

Scholz says that the trade war against the European Union (EU) declared by US President Donald Trump and his decision in May 2018 to withdraw from the nuclear agreement and impose sanctions against Iran, which will also affect Europe, show that the EU must take its fate into its own hands by formulating a joint defense and foreign policy. He also warns that "Trumpism" constitutes a danger to all Western democracies. "Defending one’s own sovereignty… is a necessary step for a strong group like the EU," the German minister explains, and expresses support for allowing free trade with Iran through a special corporation designed to evade sanctions, an idea that has aroused a storm in Washington and Jerusalem.

"Globes": Many in Israel, including Prime Minister Benjamin Netanyahu, are worried about Iran’s nuclear and terrorist activities, especially following the 2015 nuclear agreement. What is Germany’s stand on this issue?

Scholz: "About Iran, there is reason to be worried. This is why we worked together with the US American administration, the French, and the British, as well as the UN, to find a solution which gets Iran away from its nuclear program. The EU and the UN believe that the JCPOA is a prudent instrument to keep Iran on that track, though we know the agreement is not the end of the debate. There is something that has to be added, and we would appreciate very much if there is progress in getting Iran peacefully away from developing missiles that could reach Israel and other countries. We are skeptical about the decisions of the current US government - to abolish all agreements from the American perspective. This agreement started to work well."

In a way, President Trump’s decision to get out of the 2015 JCPOA marked a virtual "line in the sand:" on the one side are the US and Israel, on the other Iran and Germany. Why are you fighting so hard to keep the nuclear agreement?

"There is no line. I don’t see this division. We worked very hard with many other countries to find a way to get Iran away from a nuclear bomb. I think this is a common approach - for us as well as for the USA and Israel. It’s a crucial goal. But on the other hand - it’s necessary to think how we can reach it. The lessons we in Germany learned from history - from the successes we have had in the past in unifying a divided Europe, for example - is that we should try to reach agreements. We should try to solve the situation via talk. For us, this is the best solution for this crucial issue."

Are you aware of the negative influence this has on Germany’s image in the Israeli public?

"I believe that many people in Israel recognize that the position of the EU is in the best interest of Israel, of the security in the region and for peace in the Middle East. We share a joint responsibility."

Many Israelis believe that Germany makes this effort because it wants Iranian gas and business, not because of peace. Is that so?

"Economic reasons have nothing do with our attempt to keep the nuclear agreement with Iran. The agreement is a way to keep peace and a way for us to protect Israel. There is enough gas and oil coming to Germany from different sources. And there are a lot of people offering to send gas to Germany, newly the US. Everyone should know we have resources not only from Russia, but from Sweden and Norway, for example."

But Israel rejects this path of the JCPOA. Do you want to save Israel against its will?

"The EU has a different assessment of the situation than the administration of Netanyahu. But we share the common goal of permanently ensuring that Iran’s nuclear program remains verifiably peaceful. On a more general note, Germany believes strongly in the value of a multilateral approach in its foreign policy, and therefore acts in accord with the other European countries."

Do you support the suggestion to set up a mechanism (SPV) to trade with Iran?

"The US decided unilaterally to reenact sanctions against Iran. The US will always have its own strategies and its own decisions regarding how they deal with different problems and how they tackle them. Part of that strategy may involve sanctions. The EU is thinking about defending its own jurisdiction. The question is how we - as the EU - deal with the problem that those sanctions are not limited only to the jurisdiction of the US, but to the rest of the world.

"As the EU, we must be able to decide for ourselves with whom we trade or not. This is not a question which is just related to Iran; it’s relevant to many cases, also those we do not know yet. Defending one’s own sovereignty, defending one’s own jurisdiction, is a necessary step for a strong group like the EU."

"We have a historical responsibility"

Scholz, 60, spent a decade as mayor of Hamburg. He is part of the leadership of the Social Democratic Party (SPD), a partner in Merkel's grand coalition. He was appointed Minister of Finance, a position customarily reserved to the chancellor's party, because Merkel had to compromise and give many cabinet portfolios to her partners in order to form a last-minute coalition in March. German media reports said that Merkel agreed to give this important portfolio to the Social Democrats only on condition that Scholz would be appointed. He served as Minister of Labor and Social Affairs in previous governments, and is considered a smart politician and possibly the SPD's candidate for chancellor in the next elections.

The SPD is currently far from obtaining power, however, and the current broad coalition is also unpopular. Scholz came to the interview directly from a tumultuous session of the Bundestag (German parliament). German politics are currently far from stable. Merkel's coalition is faltering, and the local press is calling her a lame duck after her candidate lost in internal party elections for leading the CDU/CSU faction in the Bundestag. Polls show a decline in public support for her.

Scholz is granting the interview before traveling to Israel for inter-governmental consultations that are part of the special relations between Israel and Germany. These consultations are supposed to take place annually and alternately in Germany and Israel. For various reasons, the most recent consultations were in February 2016. Scholz says that he traveled all over Israel as early as the 1980s and subsequently returned for another visit as part of his activity in the SPD youth group. Like many Germans, he also found something familiar about Israel. "I remember sitting on the beach and everyone around me speaking German, but they were Israelis," he says.

"Germany and Israel have very close ties, as the government-to-government-consultations of our two administrations in Jerusalem show. These consultations are a good chance to discuss a wide variety of topics of common interest, like how to tackle global challenges in the financial dialogue, banking policy, and economic development, among others. And we want to develop this potential of common interests even further in the coming years."

Do you support Chancellor Merkel’s declaration in 2008 that supporting Israel’s security is a “raison d’Etat” (national interest) of the German Federal Republic?

"This is a declaration which is supported throughout Germany - and, of course, I support it strongly as well."

And how does that manifest?

"Germany and Israel are united by a vibrant friendship, have a shared and lively democratic tradition of civil rights and liberal democracy, entrepreneurship and belief in the power of progress. In the future, we need even more cooperation in living these values, not less, to master the challenges of our times. In seeking solutions and join forces internationally, we are very much aware of the responsibility that is rooted in our history. The terrible crimes of the “Third Reich”, committed by Germans against Jews, create a historic responsibility for us and our country with regard to the destiny of Israel. Germany now is a country with many migrants from all different parts of the world - but living in our country, they are all Germans and they too share this responsibility."

There is a lot of talk in Germany recently, and in your coalition, about “Digitalisierung”. Do you think Germany can learn something from Israel in that field?

"Absolutely. Israel succeeded in becoming a start-up country. It was able to establish the conviction that progress in society is possible through developing technological tools with an entrepreneurial spirit. Digitization is the task at hand - and one of the top priorities of the new German government. As Minister of Finance, I am convinced that we can learn from Israel how to shape digitization so that everyone benefits from it. In my former position as the First Mayor of Hamburg, I organized visits to Israel which helped us implement methods to support start-ups and to develop a quite successful eco-system for startups in the city."

And is there something Israel can learn from Germany?

Scholz smiles and answers, "Coming from Hamburg, which is a very modest city, I happily decline to answer such a question."

Let’s continue to a subject that involves both of the previous topics - German-Israeli relations and Iran. Were you involved in the decision to approve the selling of three more submarines to Israel last year?

"I joined the German government some six months ago. The export of military goods is approved by a committee within in the German government, whose procedures are strictly confidential."

Can you say what is Germany’s motivation in providing these submarines to Israel?

"Israel is a close ally of Germany, we feel responsible for the safety of your country and for your ability to defend it."

The process of acquiring these submarines has been a corrupted one. Money from a German corporation - Thyssenkrupp - was used to bribe Israeli security and government officials, according to the plea-bargain signed by the state witness, who was Thyssenkrupp’s representative. Some of that money came from German taxpayers, who subsidized these deals. As the man in charge of this tax money, does that not worry you?

"Notwithstanding the specific case, where I have no insights to, I want to stress: corruption is a serious crime in Germany and our laws and legislation are very clear on this subject."

And speaking of defense cooperation, Germany decided recently to purchase Israeli drones which could be armed.

"We have a good cooperation with Israel in that matter. Nobody in Germany has any problems with buying weapons from Israel. If there are debates, they are about the technological decisions related to them - but not about the country they came from."

Is there criticism because Israel uses drones in the West Bank and Gaza?

"Not that I am aware of."

Do you support arming the drones?

"There is a debate about this technology in Germany and many people are not happy with the idea of arming drones."

Do you see Israel as a success story?

"Yes, it’s a democratic state, it is a success if you know the circumstances of building the country. And Israel could be sure that Germany will always be supporting it to be even more successful in the future."

"We face trade wars and a rise in nationalism"

Like many Europeans, Scholz and his colleagues were surprised by the number of fronts opened against them by Trump in the past six months - a trade war (currently fairly subdued), the nuclear agreement with Iran, public denigrating of the importance of NATO, demands that Germany spend more on military procurement, and calling the EU the "number one enemy" of the US were only some of the statements by the US president.

This led Scholz and his SPD colleague, Minister of Foreign Affairs Heiko Maas, to encourage a sharp response. Maas called for developing an independent foreign policy, and for a united Europe policy in response to Trump's America First policy. Scholz called for development of a European military industry and consolidation of the EU's power in defense and foreign affairs. When asked who in his ministry was responsible for keeping track of Trump's Twitter feed, he quickly answered, "No one."

You have called in your speech this summer in France to strengthen European defense in light of the changing geopolitical situation. What does that mean practically?

"Europe has entered a new phase. I am convinced that we have spent too much time over the last few years discussing problems of the single market and too little time discussing the great political challenges that face us - foreign policy and defense issues, for example. The world is ever changing, we are confronted with destabilizing regimes, with trade wars, with rising nationalistic tendencies. In reaction, the members of the EU must work together even closer in order to defend our freedom, our security, our values, and our democracies. That means taking greater responsibility for our own security and being a reliable international partner for protecting peace and human rights in the world. The reasonable and clever way to ensure that is to work together, make use of synergies, and avoid overcapacities. In short: we need to be more efficient. Currently, more than 80% of military procurement and over 90% of research and technology activities are conducted at the national level. And our systems are fragmented: the EU uses 178 different weapon systems, compared to 30 in the US. All that has to change in order to be able to fulfil the tasks at hand. And we will need further steps: a common approach for military equipment. Thus, we will achieve a better integrated defense policy that would both provide internal security and turn the EU into a serious player within the global military architecture."

Would that also mean “showing your power”, for example attacking in Syria?

"No, this is not what is meant, we focus on defensive issues."

You have said that stabilizing pensions would prevent the rise of Trumpism in Germany. Do you see Trumpism as a threat to a German democracy?

"Populism and division within society is a threat to all our western democracies. If you look at the rich countries of the world - Western Europe, Japan, Canada, USA, Australia - you will find that people lose confidence in their future despite the good economic figures. This is different in Asia, for example, where a new middle class is establishing itself and confidence and optimism is felt almost everywhere. What is the reason for this sense of insecurity and fear of the future in the beginning of the 21st century? My answer: there used to be a strong feeling that if you worked hard and do things right, you get a share and your children and grandchildren too - that feeling has come under pressure. But people need this confidence; otherwise they lose hope and turn to the past, as we can see in slogans like 'America First' or 'Make America great again' and Brexit - 'Take back control.' We have to restore confidence and give the people a solid perspective - guaranteeing pensions and decent wages is a social democratic answer.

Speaking about a changing world, Germany received more than 1.3 million refugees, asylum seekers and migrants in the past three years. As the German finance minister - is that not a long-term burden on the German economy?

"As the finance minister, I know that a big part of the growth of the German economy in the last decades was actually due to migration. Labor migration has shaped the German labor market since the mid-1950s. In Hamburg, one third of the residents have a migrant background; in Germany as a whole people with a migrant background make up one fifth of the workforce. In other words: Germany can handle this."

Do you believe at some point, from an economical perspective, the absorption and integration of these groups would be beneficial to Germany?

"There are a lot of people who already managed to be part of the labor market. We have many entrepreneurs and they will be part of this Germany. Of course, there are also problems to deal with."

Speaking about problems, many Jews in Berlin and elsewhere in Germany are more afraid today than they were before 2015. What can you tell people who are afraid to were a yarmulke in Neukoeln or talk Hebrew on the U-Bahn?

"First, they should know that we are always at their side. Germany is a liberal and open society, where everybody has the right to feel safe. We fight antisemitism and racism and promote the respect for human rights and the rule of law."

Do you define it as a problem?

"Of course it is a problem if someone feels unsafe here. Our responsibility to protect Jewish life will never end, and anyone living in our country should be sure that we defend his or her right to live in freedom and in safety."

Published by Globes [online], Israel business news - en.globes.co.il/en - on October 3, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

Olaf Scholz Photo: ASAP Creative Shutterstock
Olaf Scholz Photo: ASAP Creative Shutterstock
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