An Interview with Ambassador Klaus Scharioth, Former German Ambassador to the United States

by Forum Staff on April 22, 2013

AmbScharioth PhotoAmbassador Klaus Scharioth served as German Ambassador to the United States from 2006-2011. He studied law in Bonn, Geneva, and Freiburg, as well as international relations at the Fletcher School of Law and Diplomacy, Harvard Law School, and the John F. Kennedy School of Government. In 1976, he joined the German Foreign Service. Since then he has held posts around the world, including Quito, Ecuador, the Permanent Mission of the Federal Republic of Germany to the United Nations in New York, and Chef de Cabinet to the NATO Secretaries General Wörner, Claes and Solana. From 1999 to 2002 he headed the Political Directorate-General and was Political Director of the German Foreign Office. From 2002 until March 2006, Dr. Scharioth served as State Secretary, the highest civil service post in the German Foreign Office. He currently is the Dean of the Mercator Fellowship on International Affairs.

In an interview with The Fletcher Forum, Ambassador Klaus Scharioth discusses the future of the transatlantic relationship, the euro zone crisis, the rise of China, the scheduled withdrawal of NATO troops from Afghanistan, and the challenges of confronting climate change. He addresses U.S. foreign policy in President Obama’s second term and provides shrewd advice to young professionals aspiring to careers in public service.

FLETCHER FORUM: 2012 saw little tangible progress for the euro zone as it slipped back into recession. What do you think should be Germany’s role in helping to spur more spending and revive growth, as the biggest and most robust economy in the euro zone?

SCHARIOTH: It is not just a question of Germany’s role, but of how all euro zone members can work together. In my view, we need a four-track approach. First, we have to provide liquidity, which is lacking. The slightly better off countries like the Netherlands, Austria, Finland, and Germany will have to show solidarity to help solve the liquidity problem. In that regard, we have made good progress: we have established the ESM, the European Stability Mechanism, with about 500 billion euro (700 billion dollars), and the European Central Bank has increased its balance sheet by a factor of five in the last few years. Second, we need to put our house in order. We have to really see to it that the countries that are in trouble get to the root of the problem, which is a lack of productivity and of competitiveness. In some cases, there is also a lack of governance, which means that tax collection is not as good as it should be, especially for the well to-do. We have to help these countries, but they also have to help themselves by implementing these difficult reforms. They should work to improve competitiveness and to eliminate structural deficit through reforms. Third, we have to help those countries in need to improve their capability to innovate, their capacity for competitiveness, and their productivity. I suggest that we use the cohesion funds and the structural funds of the European Union for this purpose. This strategy would shift the focus to those countries primarily. We must place the emphasis on innovation, productivity gains, and competitiveness, rather than on, for instance, housing—so to avoid another real estate bubble. Fourth, and most importantly, we must begin to coordinate fiscal policy. The birth defect of the euro is that so far, we only have a common monetary policy but we do not yet have a common fiscal policy.  Coordinating fiscal policy is critical, and later on, coordinating economic policy will also be necessary.

FLETCHER FORUM: There has been an increasing number of calls for Germany to accept one of a number of proposals to issue “eurobonds” that would allow collective debt backed by the euro zone as a whole. In light of the recent Cypriot ballot, how seriously is Germany considering these eurobond proposals?

SCHARIOTH: I don’t think it is a response that we need now, because it might give the wrong signal and take off necessary pressure to implement reforms. It’s very difficult to put these reforms in place, as they are quite harsh, but I think they are necessary. We have to avoid the sentiment that deficits don’t matter; they do matter.

FLETCHER FORUM: Germany and Russia’s traditionally close bilateral relationship is increasingly strained due to the Cypriot bailout and Russia’s crackdown on NGOs and German political foundations. Is this a challenge or an opportunity for the future of the bilateral relationship?

SCHARIOTH: Both. As is so often the case, challenges and opportunities lie very closely together. I think German leaders will continue to raise issues that concern us, like the ones you mentioned, in discussions with their Russian counterparts. Having said that, there is no doubt that Russia will continue to be a very important partner in the future. If we really want to construct European security, we should do it with Russia rather than against Russia. There are many common interests and problems worldwide that can be solved only in cooperation with Russia, such as nuclear nonproliferation and Iran; so it would be a mistake not to recognize that we have to continue to work closely with Russia.

FLETCHER FORUM: What are your thoughts on the proposed US-EU free trade deal? Do you think the Transatlantic Trade and Investment Partnership (TTIP) could serve to stabilize economies on both sides of the Atlantic? Are there any serious negative consequences posed by such an agreement?

SCHARIOTH: No, I think it’s an excellent proposal. It is basically a follow up to what Germany proposed in early 2007 when we had the rotating EU presidency. We then, together with the U.S., created the Transatlantic Economic Council as the forum to push these ideas. I think this Transatlantic Trade and Investment Partnership is an excellent idea whose time has come. Of course, trade is important, but trade is not the main thing. We have average trade barriers of about 2.8 percent. It’s important but not the decisive point. The two main areas are investment and regulations. More than fifty percent of all U.S. foreign direct investment goes to the EU, and more than fifty percent of all foreign direct investment here in the United States comes from the EU. And those jobs that are provided by foreign direct investment tend to be manufacturing jobs. So if you really want to bring manufacturing jobs back to the United States, foreign direct investment from the EU is crucial. Therefore, you have to do everything possible to make investment attractive for all sides, and also to protect it.

The most important aspect of the TTIP is that we work on harmonizing regulations and standards, because they serve as true trade barriers and are tremendously costly. Both the EU and the United States have the same goal to achieve very high safety standards, but we approach it slightly differently. Therefore, we should consider which safety standards and regulations we could just mutually accept. We could say, for instance, that a car that fulfills European safety standards is automatically also admitted to the United States, and vice versa. For new products, we should consider if there are areas where we could develop a joint standard or joint norms, such as in nanotechnology or electric mobility.

FLETCHER FORUM: What is a realistic timeline for the TTIP negotiations, and is there any real concern that the two sides will be unable to reach an agreement?

SCHARIOTH: I hope that there is some low-hanging fruit. It will depend on if we succeed in putting together the right agenda. I’m quite confident that the European Union will get a mandate to negotiate by mid-year and I hope that Congress grants President Obama special negotiation powers. In that case, I imagine that progress could be made to negotiate the TTIP within one and a half to two years.

FLETCHER FORUM: The U.S. announcement of the “pivot to Asia” has led many in Europe to question the enduring significance of the transatlantic relationship. How would you evaluate the U.S.-EU relationship in the context of the stated shift in U.S. strategic priorities?

SCHARIOTH: In my view, the transatlantic relationship is in pretty good shape. I have never really criticized this so-called U.S. pivot to Asia. I think it is in the European interest that the U.S. stays engaged in Asia. Europe should also stay engaged in Asia, and actually, if you look at the map, Europe is part of the Eurasian landmass, so we have as much interest in Asia as the U.S. does. So both the United States and Europe take a strong interest in Asia, and I think that is good for both sides. I don’t believe it is to the detriment of the transatlantic relationship. There are no two other regions of the world that are as close to each other, as far as values are concerned, as Europe and the United States, and by that I mean the values of the enlightenment: democracy, freedom, liberty, human rights, rule of law, minority protection, tolerance, and freedom of the press. We would do well to remember that all of these things which seem so self evident to us are not the standard all over the world. This closeness on values draws Europe and the United States together and makes this partnership especially fruitful.

FLETCHER FORUM: What is the European strategy in engaging an emerging China? In your opinion, is there is a clash between the U.S. and EU approach vis-à-vis China?

SCHARIOTH: I believe the EU and U.S. approaches are compatible and actually pretty close. The current and previous U.S. administrations have tried to make clear that it is also in China’s interest to understand that they are a stakeholder in the international system. Similar to the U.S., Europe would like to have very good relations with Asian countries, and as we do in our relations with other countries, we will continue to raise differences of opinion also with China. We have a different view on intellectual property rights, the rule of law, and human rights and we will raise these issues, as does the United States. So I do not believe that there is a divergence in the European and U.S. approaches to China.

FLETCHER FORUM: As NATO begins to wind down in preparation for its 2014 withdrawal of ISAF troops from Afghanistan, what are the primary challenges that European contributing countries face? What will be the implications of the conclusion of operations in Afghanistan for the transatlantic partnership?

SCHARIOTH: We all agree that our mission in Afghanistan will not be over after 2014. It will change in its nature. It will be less military. We will still have military personnel there to do some training, but it will be significantly reduced. But it would be a huge mistake to say that we no longer care about Afghanistan. The United States and Europe will continue to help Afghanistan with their police forces, strengthening government institutions, tax collection, job creation, and alternative livelihoods for those who were previously engaged in drug production. There are many tasks that still remain and I think it is crucial that the Europeans and the Americans stay engaged in Afghanistan.

FLETCHER FORUM: Does NATO have a role to play in Syria, now or in the future?

SCHARIOTH: Right now, I don’t see it, because a NATO presence would only be possible in Syria if we would have a UN Security Council mandate and I don’t see that happening. NATO has taken certain measures, for instance to have German and Dutch patriot missiles placed in Turkey to protect it in the event of an attack. But I don’t think that for the foreseeable future NATO will play a role inside Syria.

FLETCHER FORUM: What is the EU’s future role in peacekeeping? Can and should the EU invest more heavily in capabilities to ensure it can successfully conduct increasingly complex peacekeeping operations?

SCHARIOTH: I think that is one of the strengths of the European Union. In the years since 1999, we have been developing and continually strengthening what was first called European Security and Defense Policy, now called Common Security and Defense Policy. The EU has now sent numerous peacekeeping operations all over the world, including the Balkans and Africa. I’ll remind you of the very successful mission to the Democratic Republic of Congo some years ago. The huge advantage of the European Union is that it provides for the whole spectrum of activities, from early prevention to military peacekeeping, but also to those things which go hand in hand with military peacekeeping, such as rebuilding a society post-conflict, stabilization, and the whole process of rehabilitating the society. This is a huge advantage of the European Union—in certain situations you could have one actor in charge of everything. Therefore, I’m convinced that the European Union will continue to play a very important role in peacekeeping, and post-conflict stabilization.

I do not, however, foresee any European countries, nor the United States, increasing their defense budget. It’s simply not realistic. But I think what we should do is to try to make better use of the means we have. For instance, in Germany, we have been trying to restructure our military, which carried much of the burden during the Cold War. The German Army had a huge number of tanks, which was necessary at the time, but the Cold War is over and we must restructure our forces in a way that reflects Germany’s modern day requirements. Tanks are rarely needed in Afghanistan, for instance. Instead, our troops need well-protected, lighter vehicles. In the future, we need more mobility, lighter forces, and less costly transportation capabilities. All European countries are in the process of restructuring their armed forces but this takes time. But the hope is that we can make better use of scarce means.

FLETCHER FORUM: What can the transatlantic partners learn from one another with regard to energy policy, and how might they cooperate to combat climate change?

SCHARIOTH: Climate change is one of the key issues of the day. There are two challenges currently which put the survival of humankind into question: nuclear proliferation and climate change. Therefore, we have to learn as much as we can from each other, because it is such an important question. It needs to be solved, and the window of opportunity is not that large. We have to get our act together. In my opinion, we have to get a legally binding global agreement with full commitment from all players. It would not suffice if a country like Germany or Italy does a lot and others do not. We must all contribute; therefore, I would argue for a legally binding document. I know how difficult it is, but I think we have to do it.

There are plenty of opportunities for us to learn from each other. Ten years ago in Germany, only six percent of our electricity production came from renewable energy. Today it is twenty-three percent. We could share how we achieved this. We certainly didn’t do it immediately, and we made errors, too. We implemented a very interesting new energy law, the so called feed-in-tariff, that gave incentives to everyone—not only to companies, but also to citizens—and it works. We even have a more rapidly growing share of renewable energy than we predicted. The German plan is to have eighty percent of all our energy needs coming from renewable energy by 2050, which of course would reduce CO2 emissions dramatically. We are also one of the very few countries who have now over-fulfilled our Kyoto obligations. But there are other countries as well that have made some very interesting efforts, so I think there is a lot we can learn from each other. What I would stress is that it needs to be a common effort. It will not work if just one country does it alone. That’s why, a few years ago, Germany created the Transatlantic Climate Bridge where we try to help states and cities who are interested in learning how to do it.

FLETCHER FORUM: Do you have any advice for President Obama as he wraps up his second term?

SCHARIOTH: In my view, President Obama has done a very good job. He not only announced in his Prague speech a huge change in nuclear policy. What is more, he followed through with the Nuclear Posture Review, asserting for the first time that the United States will no longer use nuclear weapons against a non-nuclear weapon state in full compliance with its obligations. He also said no to new nuclear weapons, and established the long-term goal of Nuclear Zero; I believe he is serious in his efforts to curtail nuclear proliferation. This is tremendous progress, and I very much hope that he continues to act on these promises. I would advise President Obama to push this Transatlantic Trade and Investment Partnership, which he announced during the State of the Union. This would also have a strategic impact, strengthening the U.S. and Europe. Additionally, I hope he finds a way to be more proactive on climate change. I know from many conversations with close advisors of the administration that the U.S. and Germany think very similarly. The challenge is to convince the American public and to get it through Congress. I hope that President Obama will continue to actively regulate financial markets. The Dodd-Frank Act is a very good first step, but we have to go further. Again, this is something that we can only solve together. It is important that the United States and Europe work together, because seventy-five percent of all financial markets are in the U.S. and Europe. So if we agree on how to regulate financial markets, it would really have an impact.

I’m very grateful that the United States is a fully active member in the EU 3+3 negotiations with Iran. We also should not exclude direct bilateral talks between the United States and Iran in supplementation to those talks. In addition, I believe the Middle East peace process is very important. It is good that Secretary Kerry has visited the region, and I think that only if the quartet works together—the United States, the European Union, Russia, and the United Nations—can we see success there. But I believe that the United States has to be in the leading role, because they have a particularly strong position in the Middle East. We must also address the question of the Arab Spring—again, something that we can only do together. We also have to tackle the problem of failing states. Afghanistan taught us that we cannot just let failing states fail. So we must work together, as with questions such as water scarcity, cybersecurity, and countering violent extremism. From my point of view, those are the most urgent points on the transatlantic agenda, but of course there are many other issues that we could tackle together.

FLETCHER FORUM: Given your distinguished career in public service, what knowledge or experience would you share with aspiring foreign service officers and young professionals interested in pursuing a career in public service?

SCHARIOTH: Attending The Fletcher School is already a good start. I think that one has to really work on one’s skills. Learn to be short and precise. Learn how to listen. Learn how to be a team player. As today’s world is increasingly characterized by globalization and mutual interdependence, lone players won’t do. You can achieve what is achievable in all situations only if you work as a team. Reach out to the other side, because most of the problems that we talked about today are not zero-sum games; there is a possibility of benefit for both sides. Look where there could be a win-win for both sides. For that, you have to have an ability to put yourself into the head, heart, and mind of the other side to understand what she or he really wants. These are just a few skills a future diplomat must master, but they are also some of the most important ones.

 

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