Angela Merkel is loth to take sides over Huawei

EVERY GERMAN knows the torments of Funklöcher, the patchwork of telephonic dead spots unmolested by radio signals, where smartphones fall silent and internet connections evaporate. Stuck for years in the slow lane of the rich world’s telecoms, Germany is determined not to be left behind as fifth-generation (5G) networks gear up to connect factories, cars and devices. But the government’s plans have hit an unexpected roadblock.

Like other rich countries, Germany has been agonising over whether to let Huawei, a Chinese telecoms giant, bid for contracts to build its 5G networks. Huawei offers experience, expertise and value; its kit makes up 70% of Germany’s 4G network. But securocrats worry that Chinese spooks may exploit “back doors” or other vulnerabilities supposedly built in to Huawei equipment. Others worry about relying on suppliers linked to potential adversaries. What if the Chinese government banned Huawei from “exporting” crucial software patches during a trade dispute with Europe? The American government, which banned Huawei in 2011, has threatened to withdraw intelligence-sharing from Western governments that fail to fall into line.

Germany’s Huawei row has become perhaps Europe’s biggest debate over China policy yet. It taps several sore spots. The country’s large export sector leaves it exposed to trade chills; China and America are its first- and third-biggest trading partners. It is eager to lose its reputation for telecoms backwardness. But it fears another breach with America after splits on Iran, defence, energy and much else.

No wonder the government is divided. Angela Merkel, the chancellor, and Peter Altmaier, her economy minister, wish to keep the door open to Huawei by leaving technical agencies to adjudicate; the foreign ministry and intelligence services are opposed. Even livelier resistance has emerged in the Bundestag. The Social Democrats, junior coalition partner with Mrs Merkel’s centre-right Christian Democrats (CDU), have taken a notably tough line on exposing “critical infrastructure” to Huawei. Opposition parties, such as the Greens, are Huawei-sceptical, too.

That leaves the CDU as a swing player. Its MPs are normally loyal to Mrs Merkel, but for many Huawei is a red line. Norbert Röttgen, head of the Bundestag’s foreign-affairs committee, is trying to convince his CDU colleagues to back a resolution that would urge the government to make foreign telecoms suppliers pass a “trustworthiness” test. Given the links between the Chinese state and business, that could prove impossible for Huawei to meet.

Mrs Merkel, in the twilight of her chancellorship, is losing control of the debate. But she refuses to budge. She fears a Huawei ban would trigger retaliation against Germany’s extensive interests in China; Beijing has a “huge menu” to choose from, says Janka Oertel, an Asia-watcher at the European Council on Foreign Relations. Mrs Merkel also worries about an EU-China summit she will host in Leipzig in September. Rows over Huawei could scupper goals like a bilateral investment treaty.

But Mrs Merkel also has geopolitics in mind. She wants to avoid taking sides in the burgeoning US-China tech cold war. A Huawei ban in Germany, especially if aped by other European countries, could widen the rift. Mrs Merkel chose the occasion of a transatlantic award ceremony this week to argue that China should be tied into the multilateral order, not excluded from it.

Yet MPs are unconvinced. Having failed to win them over, Mrs Merkel may want to delay a Huawei decision until after a discussion among EU leaders in March. A common European strategy could shield countries from Chinese retaliation. The debate also suits those who want a more active European industrial policy. Since the Chinese state props up its firms, dirigistes argue that the EU should help European 5G kitmakers like Nokia and Ericsson.

But delay cuts both ways. On January 29th the European Commission will suggest that governments should consider banning dodgy suppliers, as part of a “toolbox” of 5G security proposals to sway decision-makers who are still undecided. Mrs Merkel may seek compromise by barring Huawei from “core” elements of Germany’s 5G network but not the (more lucrative) “peripheral” antennae. Yet that is not good enough for her critics, who say 5G tech renders the core-periphery distinction defunct. Mrs Merkel would like not to choose. But she may have to. ■