Germany, Russia redraw Europe's
frontiers By M K Bhadrakumar
"We asked. She refused." This was what
Polish Defense Minister Radek Sikorski said
plaintively over the weekend at a conference of
European and North American leaders in Brussels.
Sikorski was voicing Warsaw's complaint
that German Chancellor Angela Merkel ignored
Polish pleas to scrap the US$10.5 billion
trans-Baltic North European Pipeline project with
Russia, which was negotiated by her predecessor
Gerhard Schroeder - a project that would cement
Berlin's energy ties to Moscow but bypass Poland
and the Baltic states.
Planned in the
early 1990s after the collapse of the Soviet
Union, the gas-pipeline project was intended to
reduce Russia's
dependence on having to
transit through such countries as Belarus and
Ukraine to export its gas to Europe. The
1,200-kilometer line would transport gas from
Russia's Baltic Sea coast through international
waters offshore Poland and the Baltic states to a
landfall in Griefswald on Germany's coast.
Sikorski said, "Poland is particularly
sensitivity to corridors and deals above our head.
That was the Locarno tradition, that was the
Molotov-Ribbentrop tradition. That was the 20th
century. We don't want any repetition of that." He
was ominously referring to the two poignant
moments in 20th-century history when Poland got
squeezed between Europe's great powers.
He
asked, "If important countries in Europe like
Germany say they want European solidarity in
foreign and security affairs and then say they
want a common policy except for relations with the
United States, relations with Russia, relations
with China, views on the reform of the United
Nations and energy relationships, well, then, what
does that leave for coordination on a joint
basis?"
The remarks were intended to draw
the attention of the trans-Atlantic leaders to the
lengthening shadows of the Russian-German ties
across the vast landscape of Central and Eastern
Europe and Eurasia (and even stretching all the
way to China) that are steadily, inexorably
reconfiguring the international system.
Given that the German economy is
rebounding as Europe's No 1 powerhouse and given
Russia's growing status as the 21st century's
energy superpower - and not the least of all,
China's phenomenal rise - a lineup involving the
three countries would profoundly impact
Euro-Atlanticism.
The signs are that the
full weight of what is unfolding has already begun
sinking in. Sikorski's outburst came within 24
hours of the summit between Merkel and Russian
President Vladimir Putin last Wednesday and
Thursday at Tomsk, the western Siberian oil city.
The timing and the venue couldn't have
been lost on anyone. The summit coincided with the
"informal" meeting of the North Atlantic Treaty
Organization foreign ministers at Sofia, which was
meant to have been an occasion for US Secretary of
State Condoleezza Rice to unnerve Moscow by
unveiling the next phase of NATO expansion into
the territories of the former Soviet Union and the
opening of US military bases in the Black Sea
region.
Before the Tomsk summit, some had
questioned whether Germany's opening to Russia was
a transitory phenomenon of the previous Social
Democratic government or whether its successor
would pick up the initiative and deepened and
broaden the relationship. The meeting cleared up
any doubts on that score and thus marks a turning
point in Russian-German relations.
Merkel
had at times vaguely hinted at her desire to
maintain a degree of distance from Moscow. Indeed,
Washington constantly urged her to do so. That was
more or less the leitmotif of her visit to
Washington in January. The Tomsk summit showed,
nonetheless, that she intended to be guided by
Germany's core interests while continuing with
Schroeder's Russia policy. This would no doubt
annoy Washington and those European capitals
seeking a "tougher", confrontational course
vis-a-vis Moscow. Sikorski's outburst is evidence
of that.
Washington has been striving to
get the European governments to orient toward its
trans-Atlantic leadership on a platform riveted on
the issue of energy security - meaning in plain
terms that Europe's "excessive" dependence on
Russia for energy will make them vulnerable to
Moscow's political blackmail. The campaign is
intrinsic to Washington's strategy of building up
an architecture of "selective cooperation" with
Moscow aimed at delimiting the latter's
re-emergence any time soon as a major player on
the world stage.
In the run-up to Merkel's
visit to Russia, Washington orchestrated a
campaign exhorting European countries to reject
Moscow's reasoning that energy security involved
two aspects that were interrelated - that is,
long-term security of supply for the consumer
countries must go hand-in-hand with "long-term
security of demand" for Russia as the supplier.
Specifically, this concept focused on Russia's
prerogative to acquire assets in the highly
lucrative gas-storage, gas-marketing and power
companies of Europe.
Washington expects to
ratchet up tensions with Russia over the issue of
energy security by July 15, when the Group of
Eight summit takes place in St Petersburg, so that
Moscow cannot possibly realize any long-term
decisions binding the industrial countries.
The US strategy involved rallying European
countries under its leadership in a common stance
vis-a-vis Russia. Merkel has now driven a huge
hole into this strategy by breaking loose and
proceeding to firm up some massive new energy
deals for German companies with Russia, while in
turn conceding to Russia's Gazprom new
opportunities to make acquisitions in the European
energy-distribution network.
At Tomsk, in
the presence of Putin and Merkel, Gazprom and
Germany's BASF signed an agreement on the joint
production of 25 billion cubic meters of natural
gas annually over a 30-year period. This is the
first time Russia has granted a foreign company
access to a strategic gas deposit.
Furthermore, the cooperation involves a
mutually reinforcing agreement on swapping assets.
Gazprom will increase its holding in Wingaz, the
existing joint-venture company with BASF, to 49%,
and also gain a stake in Wintershall, a BASF
subsidiary that owns extensive exploration and
production assets in Libya.
In turn, the
deal will give Wintershall a total of 34% shares
in Severeneftegazprom (a Gazprom subsidiary),
which will raise BASF's stake in the
Yuzhno-Russkoye gas deposit in West Siberia (with
recoverable reserves estimated at more than 600
billion cubic meters) that will be the main source
of natural-gas supplies via the trans-Baltic North
European Pipeline (in which Gazprom holds a 51%
stake while BASF and the German energy utility EON
will have 24.5% each).
What this
back-to-back deal implies for Germany's energy
security is self-evident: at the current rate of
export of Russian gas to Germany, the
Yuzhno-Russkoye deposit contains enough gas for 15
years of steady supply. Production in the deposit
is scheduled to commence in 2008. Interestingly,
Gazprom and BASF also agreed to set up a joint
venture, Wingaz Europa, to sell natural gas in
Europe.
Beyond energy cooperation, an
agreement was also reached during the Tomsk summit
for Russian Railways and the German railway
operator Deutsche Bahn to set up a joint logistics
venture for handling freight traffic. In effect,
this would make Russia a major transit route for
the trade flow between Germany and the
Asia-Pacific region - especially China, a major
trade partner and investment destination for
Germany.
Yet another significant outcome
of the summit was the offer made by Putin to pay
off Russia's entire debt to the Paris Club this
year. Russia's aggregate debt to the Paris Club
(which handles troubled debtor countries) stood at
$29.8 billion as of last October, which includes
$9.5 billion to Germany. (Russia took on the
Soviet Union's entire foreign debt of $107.7
billion in 1992 under an agreement with the other
former Soviet republics.)
Without doubt,
the Russian-German summit in Tomsk has rewritten
the ABCs of the global energy dialogue. Germany
has asserted that it reserves the right to work
out its long-term energy security with Russia on a
bilateral, mutually beneficial, pragmatic footing
- and that it brooks no outside or third-party
intervention.
Conceivably, other European
countries will follow Germany's footsteps.
(Apparently, French President Jacques Chirac is
heading for Russia.) The Netherlands is already
emulating Germany's example of allowing Gazprom
into its domestic retail market. Where does that
leave the short-lived US dream of a new
trans-Atlantic leadership role over energy issues?
From the composition of the high-powered
delegation of German industries that accompanied
Merkel (and given the Christian Democratic Union's
close ties with German industry), it is evident
that the alchemy of close Russian-German ties
forged in the smithy of Putin's friendship with
Schroeder remain intact despite the change of
government in Berlin. (Merkel is a fluent speaker
of Russian.)
The US will have to rework
the entire strategy of mobilizing the smaller
states of Eastern Europe, the Baltic region and
southeastern Europe as a bloc separating Russia
from Germany. It is abundantly clear that Berlin
and Moscow have the mutual desire to deepen and
broaden their relationship, notwithstanding the
prickliness of pro-American states such as Poland
or Ukraine.
It could not have been a
coincidence that Putin chose the backdrop of the
Tomsk summit to announce the long-awaited decision
on the route of Russia's longest oil pipeline from
Eastern Siberia to the Pacific Ocean, bypassing
ecologically sensitive Lake Baikal. Accordingly,
the construction work was launched near the town
of Taishet in the Irkutsk region on Friday.
The pipeline will run along a 4,000km
route to give Russia access to countries of Asia,
especially China. Putin drove home to anyone who
was listening that Russia indeed was determined to
develop the option to turn to Asian markets if the
West remained obdurate and illogical on issues of
energy.
He said in Tomsk last Wednesday,
"Unfortunately, we very often run into unfair
competitive practices on global markets. Despite
the huge demand for energy, we are being limited
under all kinds of pretexts in the north, south
and the west. We should look for a sellers' market
and integrate into global development processes,
considering that Asia-Pacific countries are
developing extremely rapidly, and they need
cooperation with us."
Putin in effect
posed an existential choice to Russia's European
partners: they can choose to board the Great
Russian Energy Express and make good while the
gravy train runs, or, alternatively, they are at
liberty to stay behind while the train itself
changes course and careers away eastward to where
the sun rises. Sikorski may have asked on behalf
of Uncle Sam, but it is no wonder that Merkel
refused to stay behind.
M K
Bhadrakumar served as a career diplomat in the
Indian Foreign Service for more than 29 years,
with postings including ambassador to Uzbekistan
(1995-98) and to Turkey (1998-2001).
(Copyright 2006 Asia Times Online Ltd.
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