The complicated negotiations over the European Union’s future budget, which pit the so-called frugal states led by Germany against the friends of cohesion led by Romania and Italy, the relationship between Germany and Romania, and the electoral rise of the far right in several German states and its effect on Berlin’s foreign and European policy, are among the main topics addressed by Germany’s ambassador to Bucharest, Angela Ganninger, in an interview with CaleaEuropeană.ro on the occasion of German Unity Day, marking 36 years since Germany’s Reunification.
According to the diplomat, Germany wants a larger European budget, not a smaller one, but not at any price. “No, the budget will be bigger,” Ganninger said, specifying that the discussion is about the size of the increase. An increase of 20 or 25 billion euros in Germany’s contribution “is simply not realistic,” she explained, adding that own resources could be “one element” of the compromise.
The ambassador assured that cohesion policy “will not be eliminated” and that an agreement in the Council by the end of the year is in the interest of the beneficiary states, otherwise the funds will not be available from 1 January 2028.
The negotiations are taking place against the backdrop of Russia’s war in Ukraine, now in its fifth year, rising energy costs, and competitive pressure from China and the United States.
On bilateral relations, Ganninger described defence cooperation through the SAFE instrument as a “mutually beneficial” situation: German companies can expand their production capacity, while Romania has an industrial base that can be reactivated and modernised. The involvement of defence industries could become, in her view, “the core of a much broader cooperation” between the two countries.
On the AfD’s success in Saxony-Anhalt and the results of the other regional elections, the diplomat said they reflect a mood that is “perhaps more anti-system,” fuelled by the cost of living, rents, and a sense of insecurity. She noted, however, that the state has 2.1 million inhabitants “out of more than 80 million,” that foreign and European policy are decided at the federal level, and that Germany remains “a reliable partner”.
CaleaEuropeană.ro: Madam Ambassador, last year, on German Unity Day, you told us that Germany accepts and is ready to play a leading role in strengthening Europe’s security and competitiveness. One year later, what has changed? And has Germany had to assume even greater responsibility for Europe?
Angela Ganninger: I think some of the fundamentals are still the same. Our government still works along for security, freedom and prosperity.
These are the main topics we deal with. I think some of the challenges have not changed. I mean, Russia’s war of aggression against Ukraine is ongoing, and it is already in its fifth year.
The war has perhaps changed in the way it is being fought and in its repercussions for neighboring countries, the European Union and its member states as well. We have additional challenges, such as the energy supply that comes through the Strait of Hormuz or no longer comes through the Strait of Hormuz. This is an additional geopolitical challenge, and it further increases energy costs in our countries, which, of course, affects the population but also our industries and has an impact on our competitiveness.
We have other challenges that were already there before and that may have changed a little to some extent, but we still have Chinese overproduction on our markets, which we must deal with. I think the European Council will discuss this in October. We need a level playing field with China in the economic field. We don’t have one now, and this will be a topic of discussion.
And then there is, of course, U.S. policy, which is also a factor in our relations. It was already a factor last year, and it still is, although it may be a little less predictable than it was in the past.
CaleaEuropeană.ro: Yes, it’s a difficult moment. We’ve also seen President von der Leyen’s speech at the State of the Union, in which she mentioned China and the trade deficit. The deficit with China amounts to one billion euros per day. The European continent is also affected by the way the U.S. is recalculating its troop presence and repositioning its forces in Europe.
As we record this interview for the 3rd of October, German Unity Day, we’ve just witnessed a remarkable sequence of regional elections in Germany. I’m mentioning them because we all see Germany as Europe’s main economic powerhouse.
The AfD’s historic victory in Saxony-Anhalt, its strong result in Mecklenburg-Western Pomerania, and Die Linke coming first in Berlin. Chancellor Merz’s CDU failed to enter the parliament in Mecklenburg-Western Pomerania. What do these elections tell us about the political mood in Germany today, and how concerned should the rest of Europe be?
Angela Ganninger: The German government remains consistent in the understanding of its role in keeping Europe together. You have to understand the structure of our state and what these regional elections mean within the overall structure of Germany. There are elections in the federal states. We have 16 of them.
Saxony-Anhalt, which the AfD has called a big success, has 2.1 million inhabitants. That’s about half, maybe a little more than half, of Berlin’s population. It’s not a small state, but its population is not that large.
2.1 million out of more than 80 million. I just wanted to put this into perspective in relation to the whole federal state. And then, of course, the results of these elections show that the mood of the people is perhaps more anti-establishment, leaning more towards the extreme left or the extreme right.
I don’t think that this translates directly into foreign policy or European policy, because these are federal responsibilities. They are not handled at the level of the Länder. Foreign policy and European policy are coordinated at the federal level.
We will remain a reliable partner, but we also understand that people feel under pressure, both economically and because of the changing world around them, geopolitically and economically.
Housing was a major issue in Berlin because rents are very high. There can be different issues that preoccupy the population, but many of them have to do with the changing environment and perhaps a growing sense of insecurity, both in terms of physical security and economic security, given all the challenges we have discussed.
And the cost of living is another concern; alongside all the challenges we talked about earlier.
The federal government understands its role, and the answer to all of this is to have a coherent European response, as far as we can. As the 27 member states of the European Union, we can have an impact in our relations with China and with other economic actors.
We can have an impact in supporting Ukraine. Collectively, we are much stronger. That’s the main perspective we still have on Europe, on our cooperation and on our foreign policy: to find partners who want to maintain the international order and uphold the rule of law in international relations as the basis of those relations.
From our perspective, building and strengthening these kinds of partnerships is one of the answers to this feeling of insecurity that we see, not only in Germany.
CaleaEuropeană.ro: The reason why I insist on asking how concerned the rest of Europe should be is that we have a pattern in Europe: sometimes, when you have political difficulties in different countries, they turn left, far left or far right, and the mood and the way that country plays at the European level become somehow more national.
And considering that we have upcoming and tough negotiations when it comes to the budget, when it comes to security, when it comes to competitiveness and so on, how will Germany, as the main European power, balance between these? Because sometimes a strong European answer, which is preferable, could affect electoral dynamics.
Angela Ganninger: I think our answer is not going to be a nationalistic answer because trade policies are European policies these days.
Competitiveness is a very important issue for us at the European level. And this also influences the new budget. For us, it’s important to have a different budget, at least one that is structured a little bit differently from the past, and to place greater emphasis on competitiveness and new technologies, R&D, and all that it takes to prepare the European Union not only for the security challenges but also for these economic challenges, and to remain an important economic player in the face of China, the US and others who are investing heavily in AI.
If we want to be a competitor, a genuine competitor in this field, we also need to step up our efforts collectively. I think there is often a kind of debate that doesn’t really capture the details. I mean, people just say, “Germany wants to cut the budget.”
No, the budget will be larger. The Multiannual Financial Framework will be larger than before. But the debate is about the amount by which we increase it, how much we increase it.
CaleaEuropeană.ro: If I can jump in on this one, because we have the Commission’s proposal of two trillion euros for seven years. We know that Europe wants to spend more and better on defence and competitiveness. Everyone wants that. They are the friends of cohesion and agriculture. We know that. While Germany is simultaneously promoting the idea of having not necessarily a cut budget, but a more disciplined budget. But who is ultimately expected to pay for Europe’s new ambitions and to try to fix the budget in a way that serves everyone’s interests?
Angela Ganninger: I think we have to find a collective solution, as always. The net contributors, of course, expect to increase their contribution to some extent, but not by 20 or 25 billion euros in Germany’s case. It’s simply not realistic from our perspective.
CaleaEuropeană.ro: Own resources, maybe?
Angela Ganninger: It could be own resources. It could be an element. I think we are now waiting for the Irish presidency to put a new proposal on the table that might bridge the gap to some extent. It will not entirely bridge the gap.
It could perhaps help channel the discussion in a way that facilitates a compromise. In the end, we don’t expect to have the same or even a lower budget than before, but a larger one. And ultimately, it will be the heads of state and government who conclude the deal, hopefully at some point, taking into account the different perspectives.
We always managed to find a solution. From our perspective, the need to make Europe fit for the future is even more pressing now, given all the challenges we have discussed. If we want to be a player in the future, we have to take this into account. As I said, everybody understands that cohesion was a very successful policy.
CaleaEuropeană.ro: But can it continue to be so in the future?
Angela Ganninger: It can also be in the future. It will not be cancelled from the agenda of the Commission or from the agenda of Europe. This is not the debate. The debate is how we allocate the budget to better address current challenges. Another element from our perspective would be to reach a compromise at the level of the Council by the end of this year. I don’t think we have a disagreement with Romania on this point. It would be good to reach an agreement this year because we have elections in many large member states next year.
Electoral campaigns are always times when it’s difficult for governments to compromise, as we discussed earlier. So if we can reach a compromise at the level of the Council this year, we still need to negotiate with the Parliament. And as we have a new structure, it will take more time to prepare everything so that it’s ready on 1 January 2028.
That’s in the interest of the cohesion countries because otherwise cohesion money will not be flowing at the beginning of 2028. There’s a lot of work ahead for the negotiators and, in the end, the heads of state and government. I think there is a willingness to find a constructive compromise, at least on our side, and I assume also among the friends of cohesion. I hear this from both sides.
But it’s also not unusual for everyone to highlight their priorities at some point and then gradually come closer together as the negotiations progress.
CaleaEuropeană.ro: One more question on economics. Usually, the European budget has been conceived as a budget that helps the less developed countries that joined the EU after 2004 to catch up economically, improve their living standards, and so on.
But nowadays, we know that we have these structural economic and security deficits, as well as issues with high energy costs, global competition, dependence on China, and a relationship with Russia that is no longer what it used to be. Could this budget be an incentive to keep German and European competitiveness high and revive our own industrial base?
Angela Ganninger: Hopefully, yes. I mean, that’s part of why we need to invest in R&D, to have venture capital for startups, and to support all these kinds of elements that may not be sufficiently developed at the moment, so that we can be part of this new economy that is really changing the world at this point in time.
I think if we don’t manage to do that, then we’ll have an even bigger problem financing all kinds of social and other benefits, leveling up, and so on. And I think it’s not a question of Germany benefiting while Romania doesn’t. We need to benefit collectively.
We are a single market. We need to benefit collectively and create supply chains that are more resilient within Europe. So, for everyone, it’s not a question of one against the other.
It’s a joint effort to make Europe more competitive, more stable, and an active player in international politics.
CaleaEuropeană.ro: Moving from the economy to security, we know that we have Russia’s war in Ukraine. The Leipzig hybrid attack of Russia has been a target on European soil. We have had drones taken down here in Romania, as well as warnings from France and Poland about Russia’s aggressive behavior. Are we prepared to deter and counter Russia’s reckless actions, which many people are speaking out about nowadays?
Angela Ganninger: I think we are in the process of preparing ourselves better. We realized in 2022 that we were not so well prepared. We were still in the mindset of a peace dividend after the reunification of Europe. I think we are in the process of preparing ourselves.
If I speak from a German perspective, we have increased our defense spending dramatically. We have the Hague NATO pledge. We are already at 1.5% for this infrastructure, defense infrastructure.
We are at 2.7% now for the rest of the core defense budget. We will probably reach 3.5% by 2029. This is all part of a collective effort. We also have instruments in Europe, like SAFE, through which we can collectively strengthen our defense and deterrence.
Because it has long been known that, collectively, we spend a lot on defense, but we don’t spend it efficiently. And if we better integrate our defense industries and supply chains, with production sites in Romania in the context of SAFE, for instance, and create a more integrated European defense industry, it will help all of us.
CaleaEuropeană.ro: Where would you place this cooperation between Germany and Romania? In what type of framework? Because when you just Google the news in Romania, we see that Germany gets a lot of the pot from SAFE. How could this be linked to interoperability, economic growth, and the industrial base, but also to a tangible sense of security and benefits for both countries?
Angela Ganninger: I think this is the whole purpose of the instrument. The rules are the same for everybody, and I think there has been a very transparent process here. The army has defined the needs of the Romanian defense forces.
The Minister of Economy was involved in the localization process. What does Romania want to have built here? This was a very strong point in all the discussions with the companies, as far as I know. I mean, I haven’t been part of this, but localization, production sites in Romania, and an integrated supply chain have been very important elements in these discussions.
CSAT then approved everything, and the proposals went to Parliament. There is a whole setup for deciding how to award the contracts, and this is the way it should be done.
I think this was a win-win situation for the German companies, which need to expand their production sites. Demand for some of their products is now so high that they cannot meet it with their existing production facilities.
So the question was whom to partner with and where to expand production. Romania was a strong partner, with an existing industrial base that could perhaps be more easily refurbished, reestablished, and modernized to produce modern technologies, including defense technologies. There is also an established network of companies, as we know from the German civilian companies operating here.
Once a company invests, it creates an environment of suppliers that deliver spare parts and other components needed to be part of this kind of ecosystem. For German companies, this will become more of a defense ecosystem, and Romania also seems like a very good place to develop it.
This will create jobs and added value, which was an important point for the Romanian government.
It will also enhance the security of supply chains by bringing in European suppliers and components and creating an ecosystem that is more integrated within Europe and can produce much more once it is established. Of course, we first need to invest and build it up, but I think this is a win-win situation that will benefit our collective security.
CaleaEuropeană.ro: One question security, because we know that we have strong bilateral ties. Germany is our main economic partner, the German minority here in Romania is very important, and the Romanian diaspora in Germany is also important, so we have a strong, primarily economic partnership. What do you expect from each other, at the diplomatic and political level, Berlin and Bucharest, to move toward a more genuine strategic security partnership, now with this boost from SAFE?
Angela Ganninger: Well, I think incorporating the defense industries creates an environment where we have a better understanding of each other in this field and better knowledge of what can be done here and what can be done there. It may also lead to more technical exercises. I think it can be the nucleus of much broader cooperation in this field.
Of course, we have to consider the entire eastern flank and share who is doing what and where. The French are very strong here with the battle group, and we are in Lithuania with the brigade, and so on, so we won’t duplicate things. This doesn’t mean duplicating all the efforts that are already being made, but I think it will enhance our understanding and strengthen our ties in the defense sector.
CaleaEuropeană.ro: Our last question is about the legacy of German Unity Day. We know that this day is ultimately a historic promise that the division between East Germany and West Germany can be overcome and that unity can create renewal. More than three decades after reunification and the fall of the Berlin Wall, what lessons from Germany’s experience can still help Germany and Europe today to renew ourselves in a time of fragmentation, insecurity, and instability?
Angela Ganninger: Maybe first, I would emphasize that the reunification of Germany was part of a much bigger movement. It’s not only about Germany. It’s about the fall of the Iron Curtain, the reunification of Europe, in a sense, and the enlargement of the European Union. What’s been achieved in the past decades is really the reintegration of not only East Germany, but also many Eastern and Central European countries into the EU, and the creation of a strong Europe with strong economic ties, strong defense ties, that we talked about earlier, greater cohesion, and much more cooperation within Europe.
I think we should not forget, even though there are challenges now that affect populations everywhere in Europe, that this is a very precious achievement. All of us collectively live in a world where we have freedom of speech, freedom of movement, and many other freedoms that were not available or did not exist previously in many parts of Europe.
We should maybe appreciate a bit more what we all have here. Many parts of the world are envious of how we live in Europe. We still face challenges. We need to see that. We shouldn’t underestimate the problems, of course. But I think reunification really is an occasion to look at the achievements and the benefits of what Europe has achieved together.
