Baltic Sea

Russia outmaneuvered Germany on Nord Stream 2 and now all of Europe is paying the price


Russia supplies around 40 percent of German gas consumption and Germany is by far the largest export market. Berlin has fewer concerns than its allies about its reliance on Russian gas because it sees energy relations as mutually beneficial. She believes that Russia needs to sell as much gas to Germany as Germany needs to buy gas, and that alignment can prevent tensions from spiraling out of control.

This view has its roots in West German Ostpolitik 1970s, which placed great emphasis on building a gas relationship with the USSR as part of a policy to relieve tension in Europe by expanding trade and recognizing borders. The gas business, strongly opposed by Washington at the time, was a commercial success for both sides, but did not prevent a renewed rise in the East-West confrontation in the early 1980s.

However, many in Germany’s political class continue to believe that the Ostpolitik The model for dealing with the USSR should remain the basis for dealing with Russia today. They believe it paved the way for the dramatic changes in Soviet foreign policy under Mikhail Gorbachev that led to German unification.

This peculiarly German approach has hampered the EU’s efforts to develop a diversity-based strategy for energy security. In order to bring Russia closer to Europe, Chancellor Gerhard Schröder pushed for the construction of the Nord Stream pipeline, which connects Russia with Germany directly under the Baltic Sea, and wiped away the objections of several EU allies in the east, including Poland.

These countries saw dangers in expanding gas relations with Moscow after it did not hesitate to use gas supplies in its immediate vicinity as a political weapon and stopped supplying gas to several southern European countries in 2008 because of a dispute with Ukraine over gas transit. Lithuania, a vocal opponent of the project, had seen several politically motivated disruptions in Russian energy supplies over the years.

While Schröder had formed a personal friendship with Vladimir Putin, Angela Merkel was on guard. Her East German background gave her an instinctive appreciation of Putin’s personal diplomacy, which was shaped by his KGB training. However, it did not respond to the clear signs after 2012 that Russia is not only moving away from Europe but preparing for confrontation.

When Russia annexed Crimea in 2014 and tried to stir up a counter-revolution in Ukraine, Merkel rejected German political orthodoxy and rallied the EU countries for a policy of economic sanctions that should put pressure on Moscow to consider a further escalation of the conflict in Donbas . The Ukraine avoided the worst, while the German economy swallowed a bitter pill with hardly a murmur.

But old instincts quickly reappeared. In 2015, two German companies were part of a European consortium that signed a contract with Gazprom to double the capacity of the Nord Stream pipeline. The project clearly had a negative impact on Kiev as it generated significant revenues from gas transit and sought to preserve it as a means of self-defense against Russia.

Despite multiple opportunities to kill the project, Merkel allowed it to happen in the face of fierce opposition not only from Ukraine and several Central European countries, but also from a powerful bipartisan consensus in the US. She rightly anticipated that the Biden government would not sanction an ally and instead strike a flimsy deal with Germany to protect Ukrainian interests.

It is ironic that a project supported by Germany as a contribution to European energy security has encouraged Gazprom to withhold gas supplies in order to convince German and EU regulators to start up the now completed pipeline as soon as possible.

Against the backdrop of exploding gas prices, the upcoming federal government will not have time to reassess the project. Not for the first time in recent years, Moscow is teaching Europe a lesson in the art of strategy.

John Lough is an Associate Fellow of the Russia & Eurasia Program at Chatham House and author of Germany’s Russia problem (July 2021, Manchester University Press)