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Opinion Politics

Why Germany, not America, should pay to rebuild Ukraine


While Russia talks tough as it wages war on Ukraine, Vladimir Putin knows the United States will very likely continue to provide Ukraine with critical support. Putin also knows the U.S. has almost inexhaustible resources.

In anticipation of a ceasefire, however, Germany is to host a conference on how to organize Ukraine’s reconstruction. German Chancellor Olaf Scholz plans to co-host the event with European Union Commission President Ursula von der Leyen. They want to prepare a modern-day Marshall Plan to rebuild large parts of Ukraine’s physical infrastructure and reform Ukraine’s many corrupt institutions. The cost will likely range between
$500 billion and $750 billion. One problem? There is no agreement on how to find the money to foot this big bill.

The U.S. should not be a major party in footing the costs.

Top line: There would be no reconstruction of Ukraine if the U.S. had not provided over $50 billion in military assistance to that nation. Without that assistance, there would be no Ukraine, period. The same principle applies to Poland, Britain, and, to a lesser degree, the Baltic states.

The opposite is true when it comes to Germany’s responsibility here.

After all, without the German policy mistakes of former Chancellors Gerhard Schroder and Angela Merkel, it is arguable that the war in Ukraine would never have happened in the first place. In late 2005, when Schroder was still chancellor, Germany approved the Nord Stream One pipeline. This would become the first undersea gas pipeline connecting Russia and Germany. Less than three weeks after he left office, Schroder took a new job. He became the head of the shareholder committee of the company that would build the natural gas pipeline. Schroder’s compensation for being the German equivalent of chairman of the board was $600,000 a year, an extremely large salary for a figurehead position. Was there a quid pro quo?

The U.S. and other countries of Europe opposed that pipeline on the grounds that it would give Russia significant economic leverage over German and European foreign policies. The pipeline was the camel under Germany’s political tent. The same is true with regard to the Nord Stream Two pipeline, as supported by Merkel. Time and the war in Ukraine have proved the U.S. correct. German dependence on cheap Russian energy proved to be the lever that emboldened Putin into vicious aggression against Ukraine. Germany must now pay the bill.

Of course, as the world now knows, rot goes to the core of German politics. The bribery of Schroder and the narrow cronyism of Merkel have cut a gaping wound in Europe’s security and stability.

The U.S. can and should play a role. Through its Agency for International Development, U.S. AID, the U.S. has the skills and experience to oversee all aspects of rebuilding Ukraine. But German taxpayers, not U.S. taxpayers, should be paying the construction bill.

James Rogan is a former foreign service officer who later worked in finance and law for 30 years. He writes
a daily note
on finance and the economy, politics, sociology, and criminal justice.

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