It begins in 2005 during the last days of the Gerhard Schroeder government, when the German chancellor, voted out of office and on his way out the door, signed a pipeline deal with his friend, Russian President Vladimir Putin. Within weeks, Schroeder landed a job overseeing the 800-mile Nord Stream construction project under the Baltic Sea.
Schroeder had actually signed on as cheerleader for the Kremlin. The project is owned by Russia’s Gazprom and is ultimately beholden to the government. The Kremlin connection has turned out to be a lucrative, long-term proposition for Schroeder, who gets to dine with Putin while pocketing a tidy annual fee for his labors of love.
Nord Stream was inaugurated in 2011. Now Nord Stream 2 is scheduled for completion this year. All the while, Schroeder has proved a loyal Putin point man, touting Nord Stream 2 as energy heaven — gas galore and forever more.
Still, let’s not assign magic powers to Schroeder. Western European countries, Germany in particular, tend to turn dreamy-eyed when taking a whiff of Russian gas. In the 1970s and 1980s, West German Chancellor Helmut Schmidt swooned over the prospect of a pipeline barter deal with the Soviets. West Germany would deliver the pipelines, while the Soviet Union would pay with zillions of cubic feet of gas.
The project was strenuously opposed by the Carter and Reagan administrations, yet West Germany refused to buckle. Why would it? The deal was a twofer.
These were the years of Arab oil embargoes and skyrocketing prices. Moscow looked much more reliable than the Organization of the Petroleum Exporting Countries (OPEC). To boot, the tie-up promised political benefits, chaining Moscow and Bonn in mutual dependence. Greedy for hard currency, the Kremlin would be on its best behavior in Europe. The notion was Pollyannaish then, and it remains so today.
Interdependence did not keep Moscow from suppressing Polish freedom in the early 1980s. Nor did it stop the Soviets from fielding a nuclear threat against Western Europe with their SS-20 missiles in the late 1970s. Unlike the trusting Germans, the Kremlin knew — and still knows — how to keep business and strategy compartmentalized.
The construction of Nord Stream didn’t deter Putin from continuing to pursue his geopolitical ambitions, grabbing Crimea, using local surrogates to slice off southeast Ukraine and probing NATO positions in and around Europe.
Now comes today’s puzzle. Unlike Schroeder, Merkel is no friend of Putin’s. In fact, she is a stalwart who upholds sanctions against Moscow’s power grab in Ukraine. And yet, strategic good sense seems to elude her in the contest over Nord Stream 2. She will not bend to Trump, who has told her, according to the Wall Street Journal: “Angela, you got to stop buying gas from Putin.” Trump’s supposed affinity for Moscow apparently isn’t strong enough to override his interest in promoting U.S. energy sales.
Merkel’s argument ranges from the innocuous to the obtuse: “A Russian gas molecule remains a Russian gas molecule,” she recently told the Munich Security Conference in the presence of Vice President Pence, “whether it comes through the Ukraine or across the Baltic Sea.” Technically, she is right; politically, she is not.
For Putin, it makes all the difference in the world how these molecules are traveling. For him, the strategic profit of the Baltic pipelines is more valuable than the cash. Nord Stream 1 and 2, bypassing Ukraine (and Poland), will put a stranglehold on Kiev. Nord Stream 2 will serve as a handy weapon of Russian economic warfare against Kiev, exacting deference and depriving Ukraine of lucrative transit fees.
You don’t need a doctorate in grand strategy to see through Putin’s game. But why doesn’t Merkel, given huge natural-gas discoveries in the eastern Mediterranean and major improvement in liquefying gas for shipment, recognize that this could be a buyer’s market?
One answer: While Putin views everything through a strategic lens, economics reigns supreme in Berlin. That approach has worked since the end of World War II, when the United States underwrote European security. But the umbrella is buckling now, while Moscow is on a roll. Another answer is German spite and injured pride. Trump has repeatedly insulted Berlin, levying punitive tariffs and threatening to choke off intelligence-sharing if Berlin allows Huawei to build Germany’s 5G network. And he has threatened sanctions over Nord Stream 2. With friends like Trump, who needs enemies?
It is a good bet that the pipeline will be completed this year, followed by U.S. retaliation. And the winner then is . . . Putin. He will savor the wondrous spectacle of the United States and its key ally in Germany slicing into each other as the NATO alliance limps through its 70th birthday this year.