The Ukraine crisis makes clear three fundamental facts about EU foreign policy.

First, the European Union as a whole is not the key player in managing the crisis, getting a peace process off the ground, or pursuing negotiations with Russia. Rather, a coalition of individual member states drives the negotiation process. Thus far, the only exception to this rule has been the energy sector, where the EU Commission played a key role in mediating between Ukraine and Russia for this winter’s gas supply. This was, however, mainly due to the efforts of former EU Commissioner for Energy Günther Oettinger.

Second, the main Western players are neither the United States nor NATO in solving the crisis. President Barack Obama has focused his policy on establishing sanctions against Russia and expressing symbolic support for the U.S.’s allies in Europe, especially the Baltic States and Poland but also the new Ukrainian government. But Washington considers responsibility for solving this crisis as lying with the EU – and Germany in particular. Sanctions, however, are no substitute for an active policy. Barack Obama’s lack of interest in talking to Vladimir Putin shows that he sees this crisis more as a means of showing at home that he is a tough foreign policy actor. The economic costs and security risks are much lower for the U.S. than for the EU. From a U.S. perspective, Europe has to take more care of its own security and increase its defense budgets. NATO suspended cooperation and reduced its communication with Russia to a minimal level. In this sense, it is more an instrument to protect its European member states from Russian provocations than to become a platform for managing the crisis.

Third, Germany has taken a leadership role in all negotiations from the beginning. It reanimated the Weimar triangle in February of 2014, working with France and Poland to stop the spiral of violence between the security forces and the Maidan. It played a key role in creating the “Normandy format” with France, Russia, and Ukraine at the time of the D-Day celebrations of June 2014 in France. Furthermore, Chancellor Angela Merkel and Foreign Minister Frank-Walter Steinmeier are regularly in contact with President Putin and Foreign Minister Sergei Lavrov. At the same time, the German chancellor supported sanctions against Russia after its annexation of Crimea and its support for war in parts of the Donbass region. It was Merkel who brought EU member states together to step up the sanctions after illegal elections were held in Lugansk and Donetsk regions in November 2014.

Germany’s new role in the world

This Ukraine conflict takes place at a time when Germany’s political elite is actively formulating a more proactive foreign policy, not only in Europe but also in the rest of the world. Speeches by Steinmeier, President Joachim Gauck, and Defense Minister Ursula von der Leyen at the Munich Security Conference in early 2014 all signaled this shift. Reviewing German foreign policy has been one of Steinmeier’s key political priorities as foreign minister in his current term. Without doubt, the country’s growing economic and political power compared to the EU’s overall economic and institutional crisis has strengthened Berlin’s role in Europe. While Germany has always defined itself as an economic power, the intensified discussion of its foreign policy profile in recent years shows a growing understanding within the policy elite that Germany must take more responsibility with regard to crisis management and peacekeeping in the world. From a German perspective, the decline of U.S. power, combined with the world’s growing multi-polarity and fragility, calls for more responsibility in Europe and by the EU in the world. This is also linked to German economic interests, which need stable and open markets, rule of law, and functioning states in order to thrive. The fact that this foreign policy review process is taking place against the background of German society’s ongoing skepticism towards engaging more in international conflicts or even in military missions poses a challenge for foreign policy elites.

A closer look at German public opinion is warranted, however. A survey published by the Körber Foundation in May 2014 shows that 60 percent of Germans are against more international engagement, while 37 percent support a more pronounced international role for Germany. This is nearly the opposite of 1994 poll results, where 62 percent supported more engagement and 37 percent opposed it. Asked what priorities German foreign policy should pursue, respondents put protection of human rights (66 percent) at the top of their list, followed by environmental and climate protection (59 percent) and ensuring energy security (57 percent). The protection of German economic interests was in thirteenth place (25 percent), lagging even behind support for weaker states against outside aggression (26 percent). With the exception of energy security, survey results show a clear disapproval of current Russian policy. An April 2014 Allensbach survey for the Frankfurter Allgemeine Zeitung showed a steep decline in German support for cooperating closely with Russia (32 percent, compared to 55 percent in 2009) and an increasingly negative image of Vladimir Putin, whose popularity among Germans has reached its lowest point since 2000 (65 percent of those surveyed have a negative view of him.)

The roots of the changing relationship

Reframing Germany’s Russia policy has been part of the foreign ministry’s current review process, but the newly emotional tone of the discussion shows how important – but also how polarized – the relationship with Russia is. Alienation between Germany and Russia began to grow with the end of Dmitry Medvedev’s presidency and has become especially pronounced since Vladimir Putin’s return to the presidency in 2012. The change in chancellorship in 2008 from Gerhard Schröder to Angela Merkel brought not only a shift in atmosphere but also marked a decline in Russia’s importance for German leadership, which was discouraged by limited success in improving the business climate in Russia, stagnation in the fight against corruption, limited rule of law, and growing tensions in the common neighborhood. Above all, however, it was the crisis in Ukraine, and Russia’s annexation of Crimea in particular, that brought an end to Germany’s post-Cold-War Russia and Eastern policy. The failure of the “Partnership for Modernization” project is also a failure of Willy Brandt’s political heirs, who simply reheated his Ostpolitik of the 1970s and served it up for another quarter century after the fall of the Berlin Wall. “Change through rapprochement” (Wandel durch Annäherung) had been a key slogan of this policy, with goals that included support for democratization, rule of law, and Russia’s integration into Europe through economic cooperation.

Germany’s complete loss of trust in the current Russian leadership, especially the decline in personal relations between Merkel and Putin, however, has gravely damaged bilateral relations. For the German political elite, the Ukraine crisis has become a Russia crisis – a reality check on all existing assumptions, with Ukraine merely standing in for the general state of relations with Russia. As a result, even the most convinced German social democrat has had to admit that Russia and Germany do not share the same values and have different interests on fundamental questions. German domestic and foreign policy today is based on a legal approach, focusing on the rule of law and the protection of international law. To a German political elite keenly sensitive to the lessons of the Nazi past, Russia’s violation of international law and challenge to another state’s sovereignty – through its annexation of Crimea – are inacceptable. This is the crucial point, even if parts of German society and the German business world do not completely agree with Chancellor Merkel’s consistent policy.

Reframing Germany’s Russia policy

There is a positive side to this reality check: an end to German naivety about Russia. A longstanding misperception of Russian interests is over, even if the long-term goal remains: to support stability and prosperity in Europe. The goal can no longer be to “help Russia become like us.” Now, in hindsight, we see how this policy ran counter to Putin’s own goal: to protect first and foremost Russia’s sphere of influence – even against economic rationale.

The foundation is now in place for a more pragmatic approach to Russia. We saw three phases in the German political elite’s review process on Russia. First, Dmitry Medvedev’s step back from a second term and Putin’s return to the presidency in 2012 marked a disillusionment with Russia after it has placed high hopes on Medvedev’s rhetoric of modernization. Second, the annexation of Crimea brought a fundamental shock, which led the German foreign policy establishment to re-evaluate both the Kremlin’s policy and its own assumptions (i.e., the growing realization that the Russian president perceives the future of the European order in a fundamentally different way). Third, Germany has since November 2014 entered the phase of rebuilding a new Russia and Eastern policy to reflect the new conditions while at the same time conducting crisis management in Ukraine.

Five important new insights will shape the future:

The first conclusion to draw from this crisis is that Russia is not the only country in the East. There is also Ukraine, Belarus, Moldova and other post-Soviet nations. For the first time Germans are seeing Ukrainians as distinct from Russians, a people interested in integrating with the EU and sharing European values. This realization has also influenced historical memory of Nazi crimes in the East; awareness is growing that not only were Jews and Russians victims of the inhuman Nazi campaign against the Soviet Union but also Ukrainians, Belarusians, and many others. This realization helps support an end to the “Russia first” approach of Germany’s Eastern policy of the last two decades and replace it with more balanced relations with other post-Soviet states. EU neighborhood policy and in particular Eastern partnership will therefore become more important for Germany, not least because of Berlin’s interest in stabilizing countries in the EU’s immediate neighborhood.

Second, one mantra of German foreign policy has always been that peace and stability in Europe is only possible with, not against, Russia, but Germans have had to learn that peace in Europe is neither with nor against Russia possible at the moment. This means that Germany and the other EU member states need a new risk assessment with regard to Russia. They must increase their defense budgets to protect themselves. At the same time, however, there is a clear consensus among German policymakers that direct military support or intervention in Ukraine would worsen the situation with Russia and will not help to resolve the conflict. EU member states have to develop plans for improving self-defense with and without NATO in areas of hard and soft security risks. The U.S. will continue to play an important role in Europe in the context of NATO, but it will be less and less willing to balance the limited defense budgets of EU member states.

Third, taking these new security risks into account, Germany’s future approach to Russia will consist of “cooperation, where possible, risk precaution, and active defense, where necessary,” to quote Karsten Vogt, a leading former foreign policy adviser. This means that in the future, Germany’s Russia policy will be a combination of engagement and containment. Cooperation and engagement with Russia will always be an important part of Germany’s Eastern policy, but as Merkel and Steinmeier have learned in recent months, it is extremely difficult to find a common denominator with the Russian leadership on the common neighborhood. Both leaders lack Russian counterparts with the political will to talk about how to reduce the damage. At the same time, asymmetric wars within the common neighborhood, Russian propaganda campaigns against many EU member states (including Germany), and growing repression inside Russia threaten European security and stability and require new responses from Germany and the EU. The mainly homemade economic crisis in Russia is seen as a particularly dangerous threat to both Russian and European stability. Rather than being the result of EU sanctions, it is due to the markets’ loss of trust in the Russian government’s ability to react to its own economic and political crises (combined with the Russian economy’s growing dependency on a high price for oil which declines to a new low).

Fourth, from a German perspective, instruments of collective security will play an increasingly important role for security in Europe. Military solutions to this conflict are ruled out by the Germans. We have to renegotiate security in Europe with Russia and to improve instruments for building trust. But for Germany (and the EU) this is about repairing the principles of the Budapest Memorandum, with emphasis on the integrity of borders and acceptance for the sovereignty of states but with no new division of Europe. Germany will use this year of the Serbian OSCE chairmanship and particularly its own chairmanship in 2016 to strengthen this organization’s role in maintaining European peace. As Foreign Minister Steinmeier pointed out at a December 2014 meeting of the OSCE council of ministers, Germany will in the short term use the OSCE’s instruments as much as possible to stop the military escalation in the Donbass region and secure the Ukrainian-Russian border through monitoring missions and the contact group. In the middle term, the OSCE should become like the CSCE again: a relevant forum for dialogue, cooperation, and confidence-building measures in Europe. The U.N. for its part cannot play a key role in this conflict as long as it is blocked by its Security Council members – Russia and the U.S. Furthermore, it would be surprising if Russia accepted a U.N. peacekeeping mission that included soldiers from NATO member states close to the Russian-Ukrainian border.

NATO will increase its importance as a defensive alliance to protect its members from any provocations or threats from Russia and to build security in its neighborhood (also on behalf of non-members). At the same time, the NATO-Russia Council should become a crisis-proof communication forum for practical cooperation and trust-building with Russia, as well as a platform for exchange between NATO and the CSTO.

Fifth, Germany/the EU have to redefine their interests in Eastern Europe and have to learn under the new conditions where cooperation with Russia is possible and where not. This is as true for the rest of the world as it is for Europe and the common neighborhood. Finding a joint solution on Iran, stabilizing Syria and Afghanistan and fighting Islamicist terror throughout the world are indeed common goals. Against this background, the EU’s shared neighborhood with Russia has become the key area of conflict with Russia; both sides have different interests there, even if they cooperate in other regions. While Germany and the EU want to liberalize and democratize states like Ukraine, Moldova and Georgia, Russia wants to protect its sphere of influence and seems to prefer lack of transparency and weak states in its neighborhood.

The Eurasian Economic Union (EEU) could be an instrument of communication on economic policy between the EU and Russia. But as long as Russia develops this institution as a protectionist instrument directed against EU standards and free trade, it will be difficult to find common ground on a free trade zone between Vladivostok and Lisbon. A possible cooperation on the EEU should not replace the often meaningless EU-Russia summits of the past with a new similar instrument. Instead it needs to become a platform for concrete negotiations. But this, too, needs a common vision.

A new modus vivendi

The biggest challenge for both sides is to rebuild trust and establish a new modus vivendi. For the German government the goal of this policy cannot be a new Yalta – not containment based on a new division of Europe – but a new Helsinki, with equal security for all and acceptance of the sovereignty and borders of every state in Europe. A Yalta-type option would isolate Russia even more; it would accelerate its economic downturn and turn the common neighborhood into a fragile and dangerous zone – hardly in German interest. Promoting the values of the Helsinki Accord, on the other hand, would reflect the reality of the 21st century; it would promote economic development and interdependence in Europe, more security for all and social exchange across borders. Maybe that is what the current Russian leadership fears most: open societies and the free exchange of people, ideas, and goods. For Russian society this should be much more attractive than economic decline, less welfare, and more insecurity at home and throughout Europe.

The first step to reach these goals is to fulfill the Minsk Agreement of September 2014. Russia, Ukraine and the separatists have to act visibly to de-escalate the conflict in Eastern Ukraine. That means withdrawal of heavy weapons from both sides, a clear demarcation of the border of the separatist regions, stationing of international observers on both sides of the territories’ border, and a halt to sending Russian weapons to the separatist regions. To freeze this conflict for the time being and preserve Ukraine’s neutral status towards NATO are both acceptable conditions if Russia stops its asymmetrical war and its military support for the separatists. All this could help end the second and third stage of sanctions that have been introduced as a reaction to Russian activities in Eastern Ukraine. Concrete and visible steps to de-escalate the crisis could make it possible to strengthen or build platforms for discussing the future of security in Europe with Russia, not vice versa. All negotiations on Ukraine should stem from the basic principles of the country’s territorial integrity and sovereignty stipulated in the Budapest Memorandum of 1994.