Splits in the German Capitalist Class – Ampel Coalition Members at War

Economic downturn is intensifying competition between German industrialists aligned with China and the US


Last year in discussing Merkel’s retirement I wrote that: “In the dynamic of 21st century capitalism, under Merkel Germany has tried to ride several horses. But the increasingly tense race between USA and Chinese imperialism, will likely force Merkel’s heirs to be clearer about opposing US imperialism.”

Since the Russian neo-imperialist attack on Ukraine, the confrontation between USA imperialism and the bloc of Chinese-Russian imperialism, has split the German capitalist class. That class which is at the center of the EU is pivotal for the USA to influence, or should we say ‘control’. We can highlight three particular instances where this division became evident below.

The two opposed blocks are quite clear – one led by the Greens (especially Federal Economics minister Robert Habeck and Foreign Minister Annalena Baerbock) and the FDP, favour a more overt partnership with (or subservience to) American imperialism. This means burning bridges with China. This block also aims to tie the EU to the USA’s apron strings. Opposing them is the majority of the SPD led by Chancellor Olaf Scholz, who wishes to maintain economic links with China. This would enable markets for German capital and ultimately to maintain an independence of the demands of US imperialism.

This battle between the two blocks unfolded during the Russian imperialist war against Ukraine. The blocks take according positions on this war. The more bellicose Greens wish to ramp up further arms shipments to Ukraine. In contrast the SPD tries to adopt a more ‘cautious’ policy, while acquiescing in military build-up and verbally condemning Russia. But the war aspects of this needs a separate discussion. Here I focus only discuss specific recent events.

The Nord Stream Affair

On 26 September 2022, a series of explosions hit the Nord Stream pipelines – both 1 and 2 – crossing the Baltic Sea, which led to major leaks of the natural gas. More importantly they blew holes that allowed salt water to enter destroying any potential to be ever used. These pipelines were majority owned by the Russian state company Gazprom. A map of the pipeline course and a blow-by-blow dating is in Der Speigel.

This happened in the territorial waters of Sweden and Denmark – off the island of Bornholm. These countries wrote to the UN that “several hundred kilograms” of explosives had damaged the pipes.” (New York Times; Oct. 25, 2022). All observers accept a deliberate intentional sabotage. However while Denmark, Sweden and Germany have launched investigations, these are fractured and separate. Sweden refused a joint investigation as the matter was “too sensitive”.

Those countries refuse to discuss reports of recent USA and NATO warcraft activity near Bornholm. Yet between August to September 22 a US fleet – “the largest US naval battle group since the cold war ended” – was cruising through the Baltic Sea, and the USS Kearsage reconnoitered around Bornholm.

Three plausible perpetrators are implicated: “Was it the Russians trying to rattle the West, the Americans trying to sever a Russian economic artery or possibly the Ukrainians trying to take revenge on Russia? — what is known remains as cloudy.”

But the ‘Baltic Pipe’ – carrying Norwegian gas to Poland – was unaffected. Had Russia been involved, this was a much more likely target. As for the Ukranian hypothesis, this would only further exacerbate potential European gas shortages, and was unlikely to endear Ukraine to its European allies. It seems far more plausible that the USA was responsible.

The USA had long argued vehemently against the Nordstream pipelines. Under Chancellor Merkel, the German Government enabled the deal with Russia. It was with considerable reluctance the USA appeared to acquiesce. Therefore a natural question, as Der Speigel puts it, is: “Did the USA, as immediately discussed in many voices on Twitter, kill the pipeline project, which has always been unloved?”

The very probable USA ownership of the sabotage is shown by the following. Firstly as reported first by Der Spiegel on 27 September: “The U.S. Central Intelligence Agency (CIA) had weeks ago warned Germany about possible attacks on gas pipelines in the Baltic Sea… The German government received the CIA tip in summer.”

Secondly, three very open statements of US President Joe Biden, his top State Department official Victoria Nuland before the explosions, and those of his Secretary of State Antony Blinken after the explosion – leave little doubt.

In February 8th 2022, Biden threatened to “bring an end to it (the Nord Stream pipelines) if “Russia invades””. Victoria Nuland echoed those remarks.

As Russia launched the formal war, it began limiting energy flow via the older Nordstream 1, forcing immediate energy crunches on Europe. Oil and gas industrialists in the USA exulted as their profits soared (see also Ukraine and the Profits of War).

Immediately after the mysterious explosions, the smug Blinken posed as the savior of Europe, saying: “We’ve significantly increased our production as well as making available to Europe liquefied natural gas.  And we’re now the leading supplier of LNG to Europe … We’ve worked to release oil from our Strategic Petroleum Reserve to make sure as well that there is oil on the markets and to help keep prices down….Ultimately this is also a tremendous opportunity.  It’s a tremendous opportunity to once and for all remove the dependence on Russian energy …That’s very significant and that offers tremendous strategic opportunity for the years to come.”

“The U.S. Secretary of State, Antony Blinken, did not accuse Russia and instead said it was in “no one’s interest” to destroy Nord Stream 1 and 2. “The United States and NATO/EU seem remarkably relaxed about sabotage of a piece of critical infrastructure,” reported an oil and gas reporter for Reuters. Or, as Michael Shellenberger reported: “NS 1 and 2 were not delivering gas. But there is an important precedent/principle. Lack of high-profile response from Washington, London and Brussels itself an important story.”

Finally Europeans in the know are well aware of the real identity of the saboteurs. Radek Sikorski, Polish European MP and former Polish Defense Minister and Deputy Minister of Foregin Affairs blurted out a tweet: “An online debate erupted between senior Polish officials over who is responsible for the destruction… Sikorski, attributed to the United States the sabotage. “Thank you, USA,” Sikorski wrote on Twitter.”

President Putin of Russia recently again dangled the carrot of re-opening the supply of gas through the Nordstream 2 pipeline, finished last year at a cost of $US 11 billion. “Mr. Putin told an energy conference in Russia that delivering natural gas to Europe through the remaining strand of Nord Stream 2 would be a matter of “just turning on the tap.”

But that is unlikely. Warfare now includes the sensitive sea beds of the world, where the “US Senate’s failure to ratify the UN Convention on the Law of the Sea” – gives it free rein.

German Industrial expansions in China versus the USA

There are two separate groups of industrialists in Germany, mirrored by their political representatives. The two opposing directions being pursued are either pro-China or pro-USA. Ultimately, both blocks propose moving production in significant measure to either China or to the USA. For example, the CEO of BASF Germany Martin Brudermuller confirmed:

‘BASF Germany … recently announced that it was intending to “downsize “permanently” in Europe, with high energy costs making the region increasingly uncompetitive. The statement from the world’s largest chemicals group by revenue came after it opened the first part of its new €10bn plastics engineering facility in China a month ago, which it said would support growing demand in the country. “The European chemical market has been growing only weakly for about a decade [and] the significant increase in natural gas and power prices over the course of this year is putting pressure on chemical value chains.”’

Olaf Scholz made his position clear in an opinion piece for “Frankfurter Allgemeine Zeitung” on the eve of leading a major business delegation to China. Scholz rejected any “decoupling” of relations with China. The business trip was continually undermined by loud criticism from the Green-FDP elements of the Traffic-light Coalition. But Scholz’s position reflects a dominant strand in German capital, which wants access to the large market of China. In recent years this has expanded:

“In the first half of 2022, German companies’ direct investment in China hit a record high, surpassing… tens of billions of euros, according to… the German Institute for Economic Research (DIW Berlin)… This is proved by intensive investments by German enterprises in China. … BASF inaugurated the first plant .. on September 6 in South China’s Guangdong Province…. German auto parts manufacturer Hella announced in July that it will expand capacity in China and open a new lighting plant in Changzhou. Robert Bosch Venture Capital GmbH, a subsidiary of Bosch Group, announced in June that it will set up a new fund of 250 million euros for start-ups in China.”

Meanwhile the opposing and thus far smaller, pole of German capital, plans branch plants in the USA, tempted by investment funds and the lure of cheap energy:

“German companies are expanding their presence in the United States – at the growing expense of production sites in Germany… huge investment programs in the USA… economic stimulus measures, some in the triple-digit billions, to induce German companies to set up production sites in the United States…. the Northvolt company is considering suspending its plans to build a battery factory in northern Germany and instead to build a plant in North America. At the same time, the existence of energy-intensive industries is being jeopardized in Germany… The threat of their relocation abroad – particularly to the USA, where energy prices are significantly lower – is tangible.”

US and China Aligned Wings of German Capital

Meanwhile ‘Green’ Habeck tries to obstruct pro-Chinese moves of German capital: “Habeck’s economy ministry refused to extend Volkswagen’s investment guarantees for China, citing the repression of Muslim Uyghurs in the western region of Xinjiang. The ministry is now working on plans to cap the number of such guarantees for China.“

The pro-USA camp tried blocking China’s acquisition of port facilities in Hamburg. This is where Scholz hails from politically: “The Chinese shipping company COSCO’s acquisition of a stake in a terminal in the port of Hamburg, agreed upon last year, was approved last week only with certain restrictions. Federal ministers from the FDP and Greens had done their best to prevent it.”

In the event, Habeck was only able to reduce the acquisition of the stake to a minority position. But this of itself was welcomed by the USA.

Moreover in the strategically important sector of semi-conductors and chips, initially it seemed as if the German firm Elmos, was to be taken over by a Swedish company Silex –owned by Chinese semiconductor group Sai Microelectronics. While apparently approved, now Habeck has vetoed it.


We do not weep for either factional block of German capital. However we do argue that this is the prelude to the coming inter-imperialist war. While this many still be years off, all these manouevres are intensifying. Only a genuine workers party in as many of the countries driving the re-division of the world will help. Parties masquerading as “Green” or “Social-Democrat Socialists” – or indeed parties masquerading as “Marxist-Leninist” as in China – are simply covers for differing sections of imperialists.