NS2-Deal: Toad with Sugar Coating

The impact of the Biden-Merkel-Agree­ment on Nord Stream 2 in Ukraine is simply dis­as­trous. Espe­cially among western ori­ented, reform-minded people trust in Germany and the US fell at a record low. China is already filling the vacuum, offer­ing big invest­ments and trade deals, specif­i­cally in agri­cul­ture and tech. Germany and the US must recon­firm their support for the secu­rity, eco­nomic mod­ern­iza­tion and demo­c­ra­tic tran­si­tion of Ukraine and Central Eastern Europe at large. We doc­u­ment Ralf Fücks’ todays com­men­tary for spiegel.de.

Now it is offi­cial: Germany and the USA have settled their dispute over the Nord Stream 2 gas pipeline. The Biden admin­is­tra­tion has given the green light to a highly con­tro­ver­sial project that has strained German-Amer­i­can rela­tions and opened up deep rifts within Europe. What the German gov­ern­ment is cel­e­brat­ing as a diplo­matic success is, however, a com­pro­mise to the detri­ment of Ukraine and the climate: The Nord Stream 2 toad is being coated with plenty of sugar. This does not make it any more palatable.

It starts with the fact that the Germans and the Amer­i­cans have nego­ti­ated over the heads of Ukraine — at whose expense Nord Stream 2 is going. That is rotten style. The Euro­pean allies of the USA and Germany are being con­fronted with a fait accom­pli — and Ukraine is being put of with non-binding dec­la­ra­tions of intent and finan­cial con­so­la­tion plas­ters. The dec­la­ra­tion con­tains many well-sound­ing procla­ma­tions and few con­crete oblig­a­tions on the part of Germany.

Nord Stream 2 was a geopo­lit­i­cal project of Vladimir Putin from the very begin­ning. It gives the Kremlin a free hand to increase polit­i­cal and mil­i­tary pres­sure on Ukraine without jeop­ar­diz­ing the gas deal with the EU. The current deal with Wash­ing­ton leaves this flank open.

Worse still, the German gov­ern­ment rejected the Amer­i­can pro­posal to include a so-called “kill-switch clause” in the oper­at­ing agree­ment for the pipeline. This would have made it pos­si­ble to inter­rupt the gas supply runs if the Kremlin took aggres­sive steps against unruly neigh­bors. This fear is all too jus­ti­fied in view of Russia’s recent mil­i­tary maneu­vers and Putin’s repres­sive poli­cies — he recently wrote in an essay that the border between Russia and Ukraine had no his­tor­i­cal or moral jus­ti­fi­ca­tion. The German gov­ern­ment has thus removed the only pro­vi­sion from the Nord Stream 2 agree­ment that would have unam­bigu­ously linked the oper­a­tion of the pipeline and the secu­rity of Ukraine.

Germany’s vague announcements

This borders on a free ticket for Putin. The joint state­ment by the United States and the German gov­ern­ment con­tains vague announce­ments that Germany will “act at the national level and press for effec­tive mea­sures, includ­ing sanc­tions, in the Euro­pean Union” in response to new aggres­sive mea­sures by Russia.

It could hardly be more unbind­ing. One can imagine how impressed the hard­lin­ers in the Kremlin will be by this announce­ment. They know the score in Berlin. One only has to recall the dis­en­chant­ment that Robert Habeck’s loud musings trig­gered, namely that Ukraine could not be denied mil­i­tary equip­ment for self-proliferation.

In a joint state­ment, the Ukrain­ian and Polish foreign min­is­ters put their finger on the problem. They reaf­firm their coun­tries’ oppo­si­tion to Nord Stream 2 as long as there is no answer to the secu­rity risks it entails. And they rightly point to Ukraine’s futile efforts to join the EU and NATO. Here, too, Germany has played and con­tin­ues to play a key role. The bit­ter­ness of many Ukraini­ans that they are being left out in the cold by the West is all too understandable.

The German-Ukrain­ian agree­ment is full of vague pledges to Ukraine, but poor in con­crete com­mit­ments: It states, for example, that Ukraine’s gas supply should be secured inde­pen­dently of Russia if nec­es­sary. In addi­tion, a “Green Funds” for Ukraine is announced, which is to promote energy effi­ciency, renew­able ener­gies and the entry into the pro­duc­tion of hydrogen.

The sums com­mit­ted are unim­pres­sive. The German gov­ern­ment is to con­tribute $175 million to the “Green Funds”. Other donors and the private sector are expected to provide further invest­ment of up to one billion dollars, but these are vague promises for the future. Even this sum would be far from suf­fi­cient for green­ing the Ukrain­ian energy system and its inte­gra­tion into a Euro­pean hydro­gen alliance. In any case, this is a prospect only for the distant future — unless we accept the pro­duc­tion of “yellow hydro­gen” based on elec­tric­ity from Ukrain­ian nuclear power plants.

The Kremlin links future gas transit via Ukraine to Kiev’s “well-behav­ior”

The planned con­tin­u­a­tion of gas transit through Ukraine beyond 2024 is on shaky ground. The Kremlin has already announced that it will make future gas exports via Ukraine depen­dent on the well-behav­ior of Kiev. Eco­nom­i­cally, after the com­ple­tion of NS2 there is no need for this. Nord Stream 2 and the newly con­structed Turk Stream pipeline together have a capac­ity of 90 billion cubic meters per year. They can com­pletely replace the current gas transit through Ukraine. And that is pre­cisely their purpose.

Also from an envi­ron­men­tal point of view, there is no need for addi­tional gas pipelines. If the new, ambi­tious German and EU- climate goals are to be taken seri­ously, natural gas con­sump­tion must fall sig­nif­i­cantly before the end of this decade. Without the two to three billion dollars in rev­enues from gas transit, however, Ukraine will lack the means to mod­ern­ize its exten­sive pipeline system and convert it for natural gas exports.

A triumph for Putin

If this pseudo-com­pro­mise goes through, it will be a triumph for Putin: Despite the con­tin­ued inter­ven­tion in eastern Ukraine, despite Russia’s threat­en­ing pol­i­tics, despite his crony­ism with Lukashenko, despite the massive repres­sions in Russia and the repeated crit­i­cism of the Euro­pean Par­lia­ment, the Germans will go through with their bilat­eral project with Russia. Russia is more depen­dent on energy exports to Europe than vice versa. These exports finance the state budget and secure polit­i­cal influ­ence. It is incom­pre­hen­si­ble why Wash­ing­ton and Berlin are giving up the lever­age to tie the com­mis­sion­ing of Nord Stream 2 to sub­stan­tial con­ces­sions by Moscow.

It remains to be seen how Con­gress will react to this con­ces­sion by Pres­i­dent Biden. In polit­i­cal terms, Biden has received nothing in return: neither a more deci­sive German stance toward China nor a clear com­mit­ment to increase Germany’s con­tri­bu­tion to NATO. With only a few weeks to go before the elec­tions, this federal gov­ern­ment would no longer have a polit­i­cal mandate to do so.

The ques­tion remains why Angela Merkel has put every­thing on the line to push this unsea­wor­thy project through in the last few meters of her term of office — without any con­ces­sion from the Kremlin. Her com­mit­ment to Nord Stream 2 over­shad­ows her pre­vi­ous Ukraine policy. In the past, she has shown a clear will­ing­ness to stop the Kremlin with sanc­tions if nec­es­sary. She has stood up for per­se­cuted oppo­nents such as the fem­i­nist protest band Pussy Riot and helped save Alexei Navalny’s life after he was poi­soned. But in the end, she did every­thing she could to help a project succeed that would strengthen Russia’s influ­ence in Europe in the long term. That is not a good legacy. 

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