The German Crunch Point


During January, in the dead of winter, Germans watched as their gas supplies fell markedly. When they suddenly realized that Russia had screwed down the tap, they stood wide-eyed at the sudden realization that Germany may have placed too many eggs in the Russian energy basket.

What happened is that, using a spat with the Ukraine over gas prices as the excuse, Russia deliberately cut gas supplies to Ukraine, knowing full-well that by so doing the pressure would drop all the way across the chilled landscape of Central Europe to its main customer: Germany. It is through Ukraine that much of Germany’s gas flows from its source in Russia.

The fact is that Germany presently relies on Russia to supply a whole third of its oil and gas supplies. Such a level of dependence provides a nice bargaining tool for Russia—but it poses a significant geopolitical conundrum for Germany.

Pipeline Politics

During Gerhard Schröder’s chancellorship, Germany enjoyed warm and close relations with Russia’s President Vladimir Putin. It was a convenient politico-economic relationship. Russia got German investment to kick-start its ailing economy, and in return Germany got preferred access to Russia’s massive energy resources.

This relationship culminated in the Germans negotiating a clever strategic energy deal with Russia intended to meet the German and Western European demand for energy. This agreement, once carried to completion, will link Russia to Germany by routing a pipeline directly from the Russian distribution point in the town of Babayevo, 800 kilometers east of St. Petersburg, to the coast at Vyborg, thence undersea to the town of Greifswald in northeastern Germany.

Bypassing the overland pipeline routes through Central and Eastern Europe, this northern pipeline will also avoid a more direct land route via the Baltic states by routing around them, under the Baltic Sea. Although this adds considerably to costs, in terms of German strategic interests this is a classy move. Not so for the rest of the European Union. This undersea pipeline will give Germany direct control over the distribution of gas flowing from Russia to the principal EU nations. In this plan, Germany becomes the gateway between Russia and other EU nations.

Not only will this pipeline bypass the Baltic and Central European member nations of the EU, it deliberately avoids the aspiring EU member nation of Ukraine. Thus, regardless of the winter shenanigans involving Russia’s demonstrated power to turn off the gas to Ukraine and break the will of its government, Russia will no longer need Ukraine’s cooperation in distributing gas unhindered to the EU, by far its largest customer. By 2010, when this undersea link between Russia and Germany is due for completion, Russia will be able to hold Ukraine to ransom by turning off the gas tap with no effect on the rest of Europe, which, it is planned, will receive gas routed through Germany instead.

But, as Hamlet said, there’s the rub.

As long as Berlin and Moscow remain friends, Germany will have the power to control the gas flow from Russia to EU nations, which draw a quarter of their energy needs from Russian sources.

So this is a powerful strategic tool for Germany to use in bargaining with other EU nations if they do not follow Germany’s will on the future direction of Europe. Just as the Germans have ensured that they control the gates on the much-used canal and river routes from East to West Europe, they will hold the whip hand when it comes to controlling much of the supply of gas to the EU as well.

If this project proceeds, Ukraine will be left out in the cold by both Germany and Russia, for Ukraine is the bargaining chip within the whole scenario.

The deal is this. Behind the scenes, Germany has quietly agreed to trade off Ukraines efforts to join the EU for access to Russian energy. In exchange for Germany’s energy deals, Russia gets its massive breadbasket of the great Ukraine plain returned to its orbit, and a buffer zone to boot between an eastward-spreading EU and a historically unpredictable ally, Germany. The EU, on the other hand, courtesy of Germany acting as the gateway to Western Europe, gets access to Russian gas.

By the year 2010, when the Baltic Sea pipeline is completed under the guiding hand of chairman Schröder (who, after leaving the German chancellorship, accepted a controversial job offer by Putin to oversee the project), Germany will strategically control the flow of gas to the principal EU powers. As Russia demonstrated in January, that leverage can make or break a government’s will, or bend it to the power of the controller.

The problem is, as Berlin discovered this winter, this still leaves Germany vulnerable to the whims of its major energy supplier, Russia. It is obvious that the German-dominated EU, not least Germany itself, urgently needs an alternative source of energy in order to minimize the risks imposed by dependency on a single major supplier, Russia.

This situation has only served to underline that Germany, and, by definition, the EU, can ill afford any prospect of failure in its energy diplomacy. This is why Germany has sought a leading role in the Middle East peace process. After January’s wake-up call, watch as its efforts to secure sources in Latin America, Africa and the Middle East intensify.