The New Geopolitics of Energy
The last few weeks have revealed some important truths about Europe. Prior to the crisis in Ukraine, most Americans and Western Europeans had become used to a Franco-German Europe. In this version of Europe, which was designed after World War II to dampen one of the greatest state rivalries in history, France and Germany made the decisions, and Europe’s center of gravity was squarely in the West. But, these days, the real action happens further east. Ukraine, looking to overcome its Soviet past, was taking its first steps toward becoming one of the European Union’s largest and most populous members until Russia made its move to derail those plans. And Poland, for years considered a junior member of the European team, has risen as a leader by shepherding negotiations between former Ukrainian President Victor Yanukovych and the Ukrainian opposition. In this new Europe, the Franco-German engine has been replaced by a Russo-German one: as the European Union moves eastward, settling its future borders and borderlands, it is Germany and Russia that will decide who is in and who is out -- and under what terms.
To a large extent, the battle for Ukraine has become a battle over the shape that this Russo-German Europe will take. Russia, through its geopolitical boldness, aggression, and sense of entitlement, has proved willing to annex the territories that it wants, building up a Eurasian bloc to balance against the European Union. Ukraine is an essential part of that plan, and Crimea is the leading edge. Russia is very likely to keep what it has now seized, as it has in all other regional conflicts, and continue trying to use its position in Crimea to destabilize Ukraine. That will help Russia as it attempts to draw a sharp line between its values, culture, politics, and economy, and the West’s.
Thanks to Germany’s role as a key state in the European Union and its deep ties to Russia, it is the only country that could thwart or contain Russia’s grand geopolitical ambitions. It was particularly clear during European negotiations this week over possible sanctions on Russia for invading Crimea that Germany, the economic powerhouse of Europe, would ultimately decide how much to pressure Russia and how to balance Europe’s desire to punish the country against its desire to bring Russia closer through economic engagement. Germany held the line against jumping too quickly to sanctions and, instead, channeled Western anger toward Russia into an “off-ramp” solution, in which Russians and the new Ukrainian government would hold direct talks about the future of Crimea, with international mediation.
And that hints at Germany’s reluctance to abandon its long game: Since the end of the Cold War, the country has emphasized economic engagement with Russia in the hope of ushering Russian society along toward modernization. It has sought to build a strong partnership with the Kremlin to underpin a peaceful order in Eastern Europe, just as it joined with France in Western Europe after World War II to prevent conflict there.
The strategy has deep historical roots: during World War II, German armies shot up dozens of Russian towns and cities and laid siege to St. Petersburg, starving over a million civilians there. Russia resisted at huge cost and then raped and pillaged its way back to Berlin for revenge, starving a million German POWs in return. Both armies marched through Ukraine and fought devastating battles there, including in Sevastopol. This terrible shared history brought Germany and Russia closer together after 1991 in an effort not to repeat it; Germany has taken great pains since then to court Russia and prevent the re-emergence of competition and conflict. It has offered its industrial might and know-how to Russia to help with important Russian infrastructure projects and industries. Russia has accepted and appreciated those overtures. It, too, has sought to develop a special relationship with Germany, treating Germany as a great power and providing Germany a direct link to Russian gas through its Nord Stream pipeline. This tight relationship -- some say too tight -- was symbolized by former German Chancellor Gerhard Schroeder taking a well-compensated job with Gazprom upon leaving power in 2005.
The relationship hit new highs a few years ago, between 2008 and 2012, when Dmitri Medvedev served as president of Russia. Germans loved working with him and tended to regard him as a symbol of what a more modern Russia could be. They exalted him as a Russian political leader who spoke their language and supported liberal rights and freedoms. Europeans saw great promise in his Skolkovo initiative to turn Moscow into a high-tech hub, for example. But in their desperation for a good counterpart in Russia, Germans overestimated Medvedev’s importance.
Putin’s tumultuous re-ascension to power in 2012 -- and Medvedev’s demotion back to prime minister -- shattered Germany’s hopes. German political leaders saw clearly what some had argued all along -- that Medvedev was nothing more than Putin’s puppet, a convenient liberal face to an otherwise autocratic reality. Putin’s eagerness to return to power at a time when many Russians wanted him to stay away, his tough talk, and his crackdown on protests in Moscow in 2011 showed that Russia was not, in fact, evolving. Since then, Germany increasingly has been forced to confront the fact that peaceful engagement and economic cooperation don’t always prevent conflict, especially with a Russia dedicated to authoritarian politics at home and expansionist policies abroad. For instance, in Moldova, Russia has launched an open campaign to prevent that country’s pro-Europe government from signing a European Association Agreement and also encouraged ethnic enclaves to break away. German Chancellor Angela Merkel has held the line on Europe’s support for Moldova’s EU ambitions.
As much as Germany has become disillusioned with Russia and would like to isolate it, it now finds doing so very difficult; Germany is inextricably linked to its eastern neighbor as a result of its geography and years of cooperation, competition, mutual benefit, and memories of mutual destruction.
Today, Russia is Germany’s 11th largest export market, after Poland. Russia sells Germany gas and oil and Germany sells Russia expensive cars, machine tools, and manufactured products. A trade embargo or asset confiscations would sting Germany more than any other European power -- except Netherlands where Royal Dutch Shell has substantial interests -- and far more than the United States. So would a gas cutoff or embargo. But Russia, of course, is far more dependent on the West than the West is on Russia. It needs Europe as a consumer of its oil and gas exports. It is dependent on Germany, in particular, for investment and technical expertise. Economic isolation would be damaging to both sides, but especially to Russia.
And that is why Russia, although it has marched into Crimea, has likely not won the war. Germany, having avoided coming to blows with Russia and having attempted to ease tensions, seems more determined than ever to take Ukraine under its economic wing. As Ukraine develops, it might be in a better position to assert its independence from the Russian empire. For now, German leaders have started to recover from the shock that Russia would disregard international law so blatantly in Crimea. Leaders in Russia and Germany understand the stakes in their competition to regulate European politics and economics. They are devoted to sharply diverging outcomes, but are also interested in finding a common ground to maintain the peace. Although the tussle in Crimea may end in stalemate, both powers will live to play another day and work toward a vision of Europe that is not yet shared, but could be. That Russo-German Europe is the Europe we will live with, for better or worse.