14.3.2025

Negotiations as a game

Two weeks ago, the embarrassing press conference took place in the Oval Office, in which the President of Ukraine was humiliated, berated, and subsequently expelled by the US President and Vice President in an undignified manner. Two statements were made: "You don't have the cards" and "With us, you have the cards." They were uttered by a man for whom the world consists solely of deals, for whom all moral standards, partnerships, law and order are irrelevant, and who considers himself the greatest negotiator in the world.

There is some truth to these statements in their pragmatics. Negotiations are comparable to games. In the early 1990s, game theory was taught at the University of Marburg. It deals with rational decision-making in social conflict situations, which is derived from both one's own behavior and that of one's opponent. "Two cars are driving towards each other. First option: Car A swerves. Second option: Car B swerves. Third option: The game ends fatally," said a professor at the time. In recent weeks, it has become clear on several occasions how the outcome of a game depends not only on which cards are in one's hand, but also on how they are played.

Good Cards – bad Game: The Ceasefire

Donald Trump wanted a quick end to the war. The promise to achieve this within 24 hours was ridiculous, but it fits his character. The desire itself is not a bad thing. The cards he held could have been worse: The US is the world's strongest military power, supported by numerous other strong Western partners, the vast majority of whom see the need to support Ukraine. Ukraine itself has proven to be astonishingly resilient. The Russian army is weakened after three largely unsuccessful years of war, with losses of soldiers approaching seven digit figures. The Russian economy, already less than half the size of Germany's, is in ruins as a result of sanctions and massive inflation, and the population can barely make ends meet financially. The only two bad cards were the Russian president's boundless brutality and ruthlessness towards his own army and his globally effective propaganda network, his real power factor.

The "best negotiator in the world" made little of this "good hand." First, he brought Russia back onto the political stage as a fully-fledged player and strengthened it internationally. Next, he almost panicked and built up pressure for a ceasefire to come very quickly, no matter what the cost, thus making himself a slave to his absurd election promise. If a negotiating partner doesn't have time, they are already in a weakened position when their counterpart does. Next, by rejecting Ukraine's NATO membership and abandoning the return of conquered parts of the country, Russia's core demands were met in advance, thus giving away two trump cards for free. The biggest mistake, however, was completely misjudging his counterpart in several respects: believing he was seriously interested in a ceasefire, believing he would give in to any of his maximum demands, which he hasn't done for three years, believing he would respect Donald Trump even though he continued to bombard Ukraine with missiles even after January 20, and believing he would adhere to any agreement, which he never has. Putin now dictates the terms, and Trump is under enormous pressure to deliver quickly. These are no longer good cards.

Mixed Cards – Good Game: The Debt Package and the Greens

Last week, a massive debt package to secure the country's defense capability and restore a functioning infrastructure was agreed upon in Germany between the likely future coalition partners, the CDU/CSU and the SPD, which is to be passed in the old Bundestag. This passage requires a two-thirds majority, which, after the other parties withdrew, is only possible with the Greens. Disregarding basic political principles, however, the future coalition partners have miscalculated and failed to bring the Greens on board. Instead, they have proclaimed the debt package as a coming resounding success and appealed to the political responsibility of the Greens to approve the package – these Greens, whom the leaders of the CDU and CSU had previously insulted and attacked in the most vicious way.

The cards were mixed in this situation. The Greens knew that this gigantic package would not be passed without their approval. Those are pretty good cards. However, the incoming governing parties also knew that, given the current rapid upheaval in the world order and the upcoming new composition of the Bundestag, this debt package had such momentum behind it that its failure was virtually not an option. Those are weak cards. What the Greens made of this paper was impressive in several respects:

First, they responded to the continued and unobjective bashing from the ranks of the conservative parties during the first reading in the Bundestag on Thursday with a factual and justified response. There is no denying that this debt package represents a 180-degree turnaround from the Conservatives' mantra-like defense of the debt brake during the election campaign. The changed world order was already evident before February 23rd.

Second, instead of letting the package stall in the decisive vote, the Greens announced earlier this week, three days before the first reading, that they would not approve it in its current form. This enabled negotiations to reach a reasonable result with a challengingly short but realistic lead time. This was fair and constructive.

Third, the Greens naturally used these negotiations to push their ideas through as far as possible, but also recognized how far they could go in this situation. As of today, an amended package has been agreed – on these dimensions in four days.

Fourth, the points put forward are sensible. The hundred billion for climate protection are just as necessary as investments in security and infrastructure. Climate change is also a major ticking time bomb, just the clocks are turning more slowly than the security situation. Outside of the Greens' core area, the expansion of defense spending to include internal security and cybersecurity takes into account the changed situation in these areas. The stipulation that the special fund for infrastructure must be expenditures for additional projects and not ongoing expenditures even introduces an element of fiscal discipline into the package, a topic normally championed by conservative parties.

The headline of our last article was "Europe is growing up." In Germany this week, we owe this to some extent to the Greens.