Merkel-Putin meeting unlikely to close wide political gap

The last time that Angela Merkel and Vladimir Putin met, Barack Obama was still in the White House. Now the German chancellor and Russian president are to take up their difficult relationship in the era of Donald Trump. Ms Merkel’s first visit to Russia to see Mr Putin in Russia in two years this week offers only slim hopes of easing the tensions between Berlin and Moscow. The two leaders, who will meet on Tuesday, have deep differences over issues ranging from the Syrian war and violence in Ukraine to allegations of Kremlin-backed political interference in western Europe. But both appear keen to renew their longstanding personal contacts — and perhaps to explore how much the election of Donald Trump to the White House might change the global political balance. Both capitals have played down any suggestion that there could be a breakthrough in the Ukraine conflict, which has brought ties to their worst level since the end of the cold war. Gernot Erler, the German government’s special envoy for Russia, said: “I cannot be very optimistic about progress. Mr Putin will be very confident about his position and the chancellor will also stick to hers.” European diplomats have mooted a new meeting of the Normandy Format, in which the leaders of Russia, Ukraine, France and Germany, have tried to stabilise eastern Ukraine, most recently at a fraught meeting in Berlin in October.  Related article Putin’s friend emerges from shadows in Ukraine Close ties with Russian president prompts suspicion of Kiev’s negotiator There is little hope that such talks would suddenly end a conflict that has cost about 10,000 lives since 2014. But it is EU — and German — policy to keep lines of communication open. As Mr Erler says: “We remain very critical about the annexation of Crimea and the fighting in eastern Ukraine. But we want to maintain the dialogue with Moscow. So the chancellor keeps talking to Mr Putin.” Stefan Meister, Russia specialist at the Geman Council for Foreign Relations, suggested that Ms Merkel might be able to encourage Mr Putin to be more accommodating over Ukraine by warning that increased belligerence might provoke Mr Trump to respond “in a dangerous way”, perhaps by increasing military activity in Syria. There is speculation in Moscow that Mr Putin, who has yet to meet the new US president, is interested in gaining some insight from Ms Merkel, who visited Washington in March and subsequently played host to Mr Trump’s powerful daughter, Ivanka, in Berlin. Nezavisimaya Gazeta newspaper wrote in recent days that Mr Putin needed to “get a first-hand impression”. However sharing information about Mr Trump “may be on Russia’s agenda but is certainly not on Germany’s”, says one German official. The Kremlin is a bit puzzled over what’s going on in the world since the guy the US media depict as our puppet has taken over in the White House Fyodor Lukyanov, chairman of the Council on Foreign and Defence Policy The Kremlin initially hoped for a friendlier approach to Russia from Mr Trump, who praised Mr Putin in his election campaign. But Moscow’s expectations of the billionaire president have changed following the resignation of Michael Flynn, Mr Trump’s pro-Moscow first national security adviser, and the apparent advance of officials with sceptical views, including Mr Flynn’s successor, HR McMaster. “The Kremlin is a bit puzzled over what’s going on in the world since the guy the US media depict as our puppet has taken over in the White House,” said Fyodor Lukyanov, chairman of the Council on Foreign and Defence Policy.  German and Russian officials said the two leaders would also discuss energy and economic ties and the upcoming G20 summit, to be hosted in Hamburg in July by Ms Merkel.  Ms Merkel will seek to persuade Mr Putin that the EU is stronger than he believes — and better able to maintain a united front on economic sanctions on Moscow. She can point to some recovery in pro-EU sentiment in western Europe and setbacks for nationalist forces critical of the EU that the Kremlin has often supported.  Related article Germany edges towards greater Nato role with troops in Lithuania Political and practical issues mean it will take time for country to meet US demands While the UK is still heading for Brexit, the Europhile Emmanuel Macron looks set to defeat the far-right Marine Le Pen in the French presidential elections. In Germany, which holds a parliamentary vote in September, the eurosceptic and pro-Russian Alternative for Germany (AfD) has slipped in opinion polls. Whether Ms Merkel chooses to broach the issue with Mr Putin or not, she also knows there is considerable concern in Germany that the Kremlin might interfere in September’s elections in ways similar to its alleged intervention in the US. German intelligence has said that Russia was very likely behind a 2015 hacking at the Bundestag in which large amounts of data were removed. As usual, language will be no problem: Ms Merkel speaks fluent Russian, learnt growing up in the former East Germany, while Mr Putin has an impressive command of German from his days as a KGB officer in Communist times in Dresden. But the meeting at the Black Sea resort of Sochi may do little to close the wide political gap between the freedom-loving chancellor and the authoritarian Kremlin boss.

Nissan and Mitsubishi to tighten Southeast Asia alliance

Nissan and Mitsubishi Motors plan to tighten their seven-month old alliance in an effort to fight dominant rivals in the crucial Southeast Asian automotive industry. The two Japanese companies will deepen sharing of suppliers, services and technology as they target even greater cost-savings than already announced, said Carlos Ghosn, head of a partnership that also includes France’s Renault. Southeast Asia will be a test of the expanded alliance formed when Nissan took a 34 per cent stake in Mitsubishi last year after its rival was hit by a scandal over faked fuel-economy data. The alliance argues that overlaps between the two companies’ operations in the region could help it take market share from competitors such as Toyota. Nissan’s push in Southeast Asia comes at a time when the US car market is coming off its peak and as the group faces intensifying competition in China, its traditional stronghold, from local carmakers. Mr Ghosn said that while 2017 was shaping up to be a “very strong” year for all three alliance companies, Nissan and Mitsubishi had to co-operate in Southeast Asia to improve a market share he said was “way below” its potential. At the first signal there is not a wish but a will to electrify the car market in the Southeast of Asia, we will be there Carlos Ghosn In 2016, Nissan held a 5 per cent market share in the Asean region, according to Morgan Stanley MUFG Securities. While Mitsubishi’s position was stronger with a share of 7 per cent, its competitiveness and product line-up have weakened after cuts to research and development.  “By working together we are going to be able to strengthen product offer, localisation — a lot of things that are going to make both companies much better and much more competitive in the Southeast of Asia,” Mr Ghosn said. He added that sharing of purchasing and logistics would be followed by pooling of technologies and production platforms. “These are things you are going to see in 2018, 2019, 2020,” said Mr Ghosn, who was speaking at the end of a visit to Thailand and Indonesia last week. Mr Ghosn, who is chairman of both Nissan and Mitsubishi, said the alliance would increase capacity usage and utilise its plants in a “much more rational way”. Nissan also recently appointed a Mitsubishi official to head its operations in Indonesia. “We are going to have the same partners, we are going to use the same technology,” said Mr Ghosn, who stepped down as Nissan’s chief executive in April to focus on the alliance. “That’s the only way we don’t duplicate.” Read more Renault and Nissan push ahead in smart race to connect to drivers Alliance’s head of connected vehicle strategy discusses pricing and other challenges  Nissan and Mitsubishi have estimated that the alliance will generate a combined ¥49bn ($438m) in global cost savings in 2017-2018 and ¥100bn in the following fiscal year. Mr Ghosn said the alliance was ready to push ahead with electric cars in Southeast Asia once governments offered the industry support. “At the first signal there is not a wish but a will to electrify the car market in the Southeast of Asia, we will be there,” he said. In addition to Mitsubishi’s stronger position in the region, Hitoshi Isozaki, analyst at Morgan Stanley MUFG Securities, said Nissan could also benefit from the alliance by tapping into the sales and distribution network held by the broader Mitsubishi group, which includes a trading house with ties to Southeast Asia. “It would be difficult for Nissan to achieve its global share target of 8 per cent unless it captures the Asean markets,” Mr Isozaki said, noting that its share of the global car market stood at 6 per cent in 2016.