German Chancellor Angela Merkel and US Vice President Joe Biden in 2015.

CHRISTOF STACHE | AFP | Getty Images

FRANKFURT – “The times in which we could fully rely on others – they are a little over.”

These were the words of Chancellor Angela Merkel after a difficult G7 and NATO meeting with President Donald Trump in 2017. This phrase was a departure from her usual attitude towards transatlantic relations and was widely seen as a turning point.

Despite numerous high-profile statements from the Trump administration, Merkel preferred to remain calm for the next few years and probably wait for a new president in 2020.

You and the German establishment got what they wanted: In Joe Biden there is a new US leader with a clear multilateral and pro-European agenda.

But while relationships on the surface are much friendlier now, some key questions remain unanswered.

“The big issues like Nord Stream 2 and NATO’s spending target of 2% of GDP remain controversial,” said Andreas Dombret, board member of Atlantik Brücke, a non-profit organization that promotes German-American relations, in a telephone interview with CNBC. Nord Stream 2 is the Russian-led gas pipeline that hopefully will provide Europe with a sustainable energy supply.

“There is no direct approval for the new US administration, especially when it comes to a free trade agreement that is unlikely to be within reach,” added Dombret.

Attitudes to China

Predicting the future of German-American relations is no easy task as many factors go into the mix. For example, the US seems to be demanding a clear commitment to prioritize relations with the White House over those with China and Russia.

“We must fight against the Chinese government’s economic abuses and pressures that undermine the very foundations of the international economic system,” said President Joe Biden in his address at the Munich Security Conference in February.

“The Kremlin is attacking our democracies and arming corruption in order to undermine our system of government,” he added in another part of this speech.

Germany has generally put its own economic interests above all in relation to its relations with Beijing. But that has to change.

“There is a lot of pressure to change attitudes towards China, which is building up within Germany. Parties like the Greens, parts of the (Merkel’s) CDU want a tougher line,” said Noah Barkin, China’s editor-in-chief of the Rhodium Group Praxis in Berlin .

It’s more difficult with Russia, especially thanks to the controversial Nord Stream 2 pipeline, which has widespread support in Germany. The Russia problem is also closely related to the question of NATO spending. Critics say Germany cannot ask for support from NATO but then fails to pay its fair share to the budget while it finances Russia through the gas pipeline and expects the full US shield if something goes wrong.

NATO support

The Greens, a potential kingmaker in Berlin, whose federal elections are due in September, take a different view, which is also recognized in the USA. The Green Party, founded in 1980 with a clear focus on the peace movement and saving the environment, has spoken out in favor of leaving NATO and abandoning military action. The official party line has changed since then, but the party leadership is still struggling to get its members to fully support it.

Germany and other nations have been criticized for not contributing enough to their defense budgets. The NATO target was set at 2% of GDP.

“I think the 2% alignment in NATO spending is an absurd debate,” said Annalena Baerbock, one of the Greens’ Chancellor candidates and a rising star in the political scene, in an interview with Die Zeit.

The direction of transatlantic policy will depend on the composition of the coalition government if Merkel resigns and Germany elects a new leader later this year. If their CDU party rules with the liberal party, the FDP, things will likely go smoothly as both have firm commitments to the US

However, if the CDU merges with the Greens, things will get more complicated, not least because of NATO spending. In the case of a so-called Jamaican coalition of the CDU, the FDP and the Greens, this will have two major counterweights in parliament, in order to possibly water down the legislation it is calling for.