March 12, 2019
US threatens withdrawal of security co-operation with Germany
This is going to be a decisive year for the future of US-European relations. In a worst-case scenario we end up with punitive tariffs on German cars, first steps to a US withdrawal from Nato, and sanctions against European companies that trade with Iran, Russia and China. A more immediate threat, as revealed by the Wall Street Journal yesterday, relates to Huawei's bid to equip Germany's 5G networks. The US is threatening to reduce German access to classified security information. The US administration issued the threat in the form of a letter presented last Friday by Richard Grenell, US ambassador in Berlin, to Peter Altmaier, German economics minister.
The US argument is that 5G systems are much more software-reliant than previous generations of telecommunications networks. Even if Huawei were to deliver an initially secure system, constant software updates would make it possible for Huawei to include backdoors for the Chinese security services. The complexity of the software makes it impossible to control, the US side argues. The US threat is not to cut Germany completely off from all security channels - that would be against the US' own interests - but to reduce the flow and the transparency of the information. If Germany were to allow Huawei to build its 5G network, US security agencies would work on the assumption that any information they transmit would end up in China.
The Wall Street Journal writes that even this modulated threat would deeply upset the German security community, which is heavily dependent on the CIA, the National Security Agency and other US intelligence agencies for Germany's own security.
The big question is: how will Germany respond to this threat? There are no easy choices. Germany does not have sufficient independent intelligence capacity, so it is vulnerable. But Germany is also dependent on Huawei's telecommunications technology. The 5G auction offered a unique opportunity for Germany to modernise its patchy mobile telecoms infrastructure. Without Huawei, these efforts would be set back by a further two years because much of the existing 4G infrastructure is based on Huawei technology - and 4G and 5G systems are not compatible across suppliers.
To ward off a potential US threat Germany has tried to introduce a strict security protocol that includes the vetting of Huawei personnel operating the network. The negotiations for a Chinese-German no-spying agreement, which we recently covered, served the purpose to make it possible for Huawei to bid in the German 5G auction which scheduled to start this month. If Germany were to yield to US pressure, it would not only suffer an industrial setback but might become more vulnerable to further US blackmail attempts, including threats against firms participating in the NordStream 2 gas pipeline consortium.