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In Berlin, Outrage Over Nord Stream Deal Seems to Have Died

David Francis, an American reporter traveling through Europe to report on EU energy security issues, notes that Germans are not concerned about dependence on Russian energy. He wrote the following guest blog post and asks Atlantic Review's readers why Schroeder got away with the Nord Stream deal:

I've been in Berlin for the last week, interviewing German officials about the Nord Stream natural gas pipeline, more commonly know here as the Baltic Sea pipeline. For those who aren't familiar, the pipeline is controversial for a number of reasons. First, it makes Germany heavily dependent on Russia's state-controlled energy monopoly Gazprom, a firm that in the past has been accused of playing "pipeline politics." But the main controversy surrounding the deal, in Germany at least, centered on former German Chancellor Gerhard Schroeder, who pushed hard for the deal before leaving office, only to be named chief of Nord Stream's shareholder's committee after leaving office. This position pays quite a large paycheck.

In 2005, when the Schroeder controversy took place, German opposition parties were outraged, with the issue gaining international traction when the Washington Post and some individuals on Capitol Hill condemned Schroeder. The indignation in the United States has quieted, but the people I talk to in Washington still widely view Schroeder's decision, as the recently deceased Tom Lantos called it in 2007, "political prostitution." This judgment comes from the widely held belief among American politicians that Russia will use Gazprom as a foreign policy tool. They envision a situation in which Russia will hold a European customer hostage if they do not acquiesce to a Russian position, or support a Russian policy. They see Gazprom as the instrument Russia will use to again conquer territory lost when the Soviet Union collapsed. Whether or not this is the case is a different conversation entirely, but it is widely believed on Capitol Hill.

In Berlin I expected outrage over Schroeder - and in turn, the Baltic Sea pipeline - to be alive and well in Germany more than two years later. I also expected to find some fear about being so dependent on Russian energy imports. I've found neither. What I have found is widespread acceptance of the deal. Yes, there are some people I've spoken with who are still quite upset about the deal's circumstances, and everyone agrees the Nord Stream job will affect Schroeder's legacy, but the outrage has disappeared. As one person told me the pipeline and Schroeder's role in creating it have been accepted by the German public.

Fear of Russia is also rare. Many of the people I've spoken to view the Russians as a "strategic partner." The relationship may not be ideal, but it is not one-sided - Russia needs European money as much as Europe needs Russian gas, they argue. They do have a point, but that's an issue that is more nuanced than that simple explanation implies.

This strikes me as very curious. Seven years later, many people in the United States are still outraged by Dick Cheney's ties to Halliburton and George Bush's ties to big oil, and how these ties might have affected U.S. foreign policy. Perhaps it's the nature of the Bush presidency that his opposition is not likely to forget any of his missteps. Either way, conflict of interest issues within the Bush administration are still very much talked about in Washington, even if they've been accepted as a reality. Why isn't Schroeder's role in the Nord Stream deal more a part of the public debate in Germany? Why doesn't there seem to be any public concern over the nature of the deal? Does it exist, and am I talking to the wrong people? Why is everyone outside of Germany worried about Nord Stream, while people in Germany seem okay with it? I suspect it is because it's easier to ignore reliance on imported energy than it is to confront the problem. Look no further than the United States for proof of this. But I suspect there is more to this than that. I doubt Germany and Russia will ever form any real alliance, but I do get the sense that people in Germany accept the authoritarian steps soon to be ex-Russian President Vladimir Putin has taken to secure the country. At the very least, they are more accepting than the Americans, who view any departure from democracy as a cardinal sin. German readers, please share your thoughts.

David Francis received a John C. McCloy Journalism Fellowship to report on the European Union’s growing dependence on Russian energy and its effect on transatlantic relations. He is conducting interviews in Germany, Belgium, Switzerland, the United Kingdom, Italy and France. Most recently he has written for Foreign Policy magazine, the Washington Examiner, the Washington Monthly and the National Journal Group. David has covered a number of topics, ranging from U.S./Israeli relations to the Arlington County Board to the U.S. Senate to the subprime meltdown. In February, he traveled to the U.S./Mexico border to report on border security and immigraiton issues as an Arizona State Media fellow. Learn more about him at his homepage.


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Zyme on :

There are several reasons that cause this public indifference or acceptance of Schroeder´s behavior in that issue: a) The people here expect nothing else from politicians. It is considered to be common knowledge that politicians are mostly concerned about their own future - and most people can understand this behavior. In our hearts we know that if we had had this opportunity, we would have grabbed it the same way. So in a way, Schroeder is not disliked for his deal, rather than that he is envied by most people. b) The german people does have traits that are very different to the americans. In a longer comment on this issue I came to the conclusion that germans in many ways stand between an american and russian mentality. Our country has not been shaken in its history from within as much as Russia has been - thus our people are not that obsessed with stability as the russians are. But we also do not like individuals to have as many freedoms as they have in America, because we value general security and public order very highly. While the rather anglo-american concept of teamwork has entered the german society in many ways, we have also kept our strong preference of an authoritarian society. There certainly is some drive to solve problems on our own, but when in doubt, we always look for an authority to solve the issue. So effectively this is why we have more sympathies with the russian system than individualist americans can have. c) Also our people often take into account that because Germany is highly populated and very small in size compared to Russia, it is a lot easier to govern with a less authoritarian approach. A country that has Russia´s size instead needs a stronger grip on its people to keep its regions from centrifuging. Furthermore most germans show more respect for foreign concepts of government than americans generally do. "Andere Länder, andere Sitten" ("foreign countries, foreign customs" is a popular saying which expresses this feeling). d) The german people are tempted to extend a sentiment to Russia that has been shown towards other formerly hated enemies like France and Britain: We don´t have to love each other, but going to war among europeans has simply become unimaginable. Western Europe is aiming at regaining lost influence in the world, and so does Russia. Why not work together whenever possible? e) Since 1990, more than two million "russians" with german ancestry have moved home and become repatriated in Germany. As many of these families have resided in Russia for centuries, this wave certainly has helped to bring our peoples together more closely. These are the first thoughts that came to my mind on this topic - anyone else?

Zyme on :

Now that I have watched the Bundesliga - may I add reason f) ? FC Schalke 04, one on the most popular soccer clubs in Germany, got a new main sponsor in 2007: Gazprom ! ;)

Pat Patterson on :

Sounds very similar to the twelve million repatriated Americans that have returned to the US. But they generally prefer to become called Mexicans. Joe Noory brings up an interesting point but probably forgot that Citgo, owned by PDVSA, specializes in just such refining of the thick oil(I don't know the technical term) that Venezuela ships. Two years ago, with great fanfare, Chavez announced that he was negotiating with the Chinese to sell crude unrefined oil to them but ignored the fact that the Chinese had no intention of building the kinds of refineries Venezula already controls, via stock ownership, in the US. But I think the idea that Schroeder, while feathering his own nest, accidentally or deliberately, secured a fairly reliable source of oil has merit. But it needs reminding that commodity nations have power as long as there is a market for their goods. The OPEC nations in the 70's and 80's sought to change US policy towards Israel and only succeeded in pushing the US invest in oil reserves much closer to home, namely Canada, Mexico and Venezuela. I suspect that this new wealth in Russia might increase the value of that countrys assets but the continued decline in population will force the Russians to become even more reliant on outside financing.

Joe Noory on :

The fact that they're tight lipped is a reason to think that they're more anxious than they're willing to let on. While the bilateral relationship with Russia is equal on the basis of finance, Russia can find cash elsewhere at less cost and risk as Germany will have finding natural gas. It also indicates the possibility that Schroeder's one bit of great wisdom was to conclude that Europe is stuck with Russia as a major energy source, so to undermine the potential risk to Europe from within is one of the only options available to him to have any sort of impact on the situation. This is very different than Cheney, who by law as VP has to place his investments in a blind trust and has all of his relationships investigated for fraud, and Schroueder openly acting in an executive role at Gazprom. Were the White House-oil industry relationship really the case! We wouldn't be paying so much more for heat and transportation, nor the "tax" costly energy has in driving up the cost of commodities. Diverting crops into biofuel is nothing compared to the energy input it takes to cultivate and transport a crop, after all.

franchie on :

GDF hydrocarbons projects "c'est l'essor du gaz naturel liquéfié (GNL), affranchi de la rigidité des gazoducs, qui apportera la contribution essentielle à l'avènement d'un véritable marché européen." Zeebrugge, the free Marcket for Gas and its big reserve tanks (Suez +GDF) seems that we are less dependant for our approsionnements in hydrocarbons and that Russia will have less power than in Germany to influence our energy policy

franchie on :

how can we set the links ? it doesn't work with

ADMIN on :

You can make a clickable links by using BBCode code. See the second note below the comment box. There is a cool firefox toolbar that makes it real simple to format BBCode: [url][/url]

Joe Noory on :

450 million people can't switch sources on the fly or in the middle of winter, even if the network receiving points are adequate, the gas has to come from somewhere. Orders are usually 6 week advances. In other words, it's a fine, fine way to shock markets for even a day - to make them buy the same gas from Russia off of the non-state contract market and buy political pliability. It's not the same risk as Venezuela takes with the US. Most of the refining capacity for the very specific type of oil they mine in Venezuela is in the US. They aren't tempted to toy with the majority of their market. The Kremlin on the other hand can force Gazprom, etal, to find "spot" type contracts a lot more easily.

Nanne on :

In order to deliver gas you need a great deal of physical infrastructure. Right now it is impossible for the Russians to deliver the gas from West Siberia to other buyers, because they would first need to build a large amount of new pipelines, or LNG terminals. In the oil market shifting supply will not affect a country very much, that is true. If Venezuela decides to stop delivering to the US, it will have to shift its supply elsewhere and the US will buy from elsewhere. The only way Venezuela could really affect the price is by taking a big chunk of its supply completely off the market. The market for gas is not globally integrated in the same way - yet, as there is not enough LNG infrastructure (and such infrastructure may be more expensive than pipelines). Europe can do a few things to deal with short term supply crises, in case the Russians would really turn supply off: - Maintain and expand spare capacity for electricity generation - Maintain and expand gas and oil reserves - Make sure electricity generation does not become skewed toward gas - Build more LNG infrastructure - Build a biogas infrastructure On the EU level, there has been some talk of 'solidarity' on the energy issue. So if Russia were to turn one of the pipelines to Germany off because of tensions with one of the transit countries, those in the EU should still get supply.

franchie on :

Joe Noory on :

So what? I know how proud you must be, but the French represent on eighth of the population of the EU. That aside, if Gaza and GDF have giant cylinder yards, in our our of France, do you really think the rest of Europe won't think of them as theirs' in some way? If you weren't so in love woth the Marxist fantasy, you'd also realize that in an open market, reducing the supply to one buyer raises the cost on everyone. So if they have a week's rationed supply somewhere, what do they do in week two? All the leverage is spent. Ivan sez: "have a nice day."

franchie on :

a marxist country who is gaining the 5 th place in the rate... as far as our ability to get oil and gaz on free markets, that also why your country buy us oil in Fos sur Mer (I was reading a few months ago while there was a strike there and that your country complained that they could not get their tanks) joe-joe, yeah, look for the beast, we are invading the US again, and gave work to your population, cause the unemployment rate, supposed 5 % isn't the reality : 2,5 million persons are in jail, your students are counted as working while ours in EU are counted as unemployed, your jobs are low wadged jobs ; so I understand why you are angry, you would like us as a third wold country, too bad ! have a nice day prut prut

Joe Noory on :

That's nonsense. The figures are for people seeking work in one way or another on both sides of the Atlantic. In fact the per-capita social cost belies any selective use of statistics, and in that respect the US isn't doing as badly as you'd like to think. Since the thread has nothing to do with employment, I can only assume you're looking for some flaw to prop up your pride with, which is the usual pedsantry I've heard from many Europeans over the past three decades. The US has had a 6 year run of unemployment in and around 4.5 to 5% while France and Germany were trying to break through 8, and the objective consensus for decades has been that the French government has always cooked the books to avoid a subtext of pessimism from making the economy worse. The problem is that it only works once. Compound that with a nearly uniform opinion in the Parisian press to take a kind of pleasure with an American economic slump, blame a European one on it, and try to get the American consumer to correct their export problems. Going back to 2000 when the Euro was at $0.88, and the Fed coordinated with the ECB to prop it up, what does what's happening today tell you about the futility of even paying attention to people who turned "atlanticist" into a publicly accepted insult.

franchie on :

my dear friend, a study from an american stats scientist said so ; I am not looking back for it carry on your dellusional visions, I don't care

Pat Patterson on :

The unemployment statistics that compare nations come from the ILO using the same methadology. And as I pointed out earlier sometimes the internal national statistics are even worse, ie., Germany and France. The numbers gained might very well indeed be suspect but by using the UN's numbers they are the same and therefore comparable for everyone. And the refernce to a Marixist country soon to be 5th on the list of the largest economies, at least I think that was the point, is simply fabulist. China is already the 4th largest but its Marxism is as if the cover of Das Kapital was glued onto a copy of The Wealth of Nations.

Anonymous on :

das Kapital macht schon gut, and that's your problem we don't need you, but you need us, that's your anger

Axel on :

From [url=]Eurostat[/url]: In January 2008, the unemployment rate was 4.9% in the USA. In December 2007, the rate was 3.8% in Japan and 2.4% in Norway. [from the table:] Sweden: 5.6% Germany: 7.6% (Jan 2007: 8.8%, Jul 2007: 8.4%, Dec 2007: 7.8%) France: 7.8% According to the Eurostat definition unemployed people are those aged 15 to 74 who, following the International Labour Organisation (ILO) definition: - are without work; - are available to start work within the next two weeks; - and have actively sought employment at some time during the previous four weeks. The unemployment rate is the number of people unemployed as a percentage of the labour force. The labour force is the total number of people employed and unemployed.

franchie on :

Axel on :

"And as I pointed out earlier sometimes the internal national statistics are even worse, ie., Germany and France." In the case of Germany, are you aware of the fact that the national statistics also includes part-timers who work less than 15 hours a week? Everyone working less than 15 hours a week, who is seeking and available for a full-time job, can be registered as unemployed. In this case, social security elements like health insurance and pension insurance are completely paid by the state. If I remember right, around one quarter of Germany's national unemployment are part-timers.

Pat Patterson on :

That's why I emphasized the use of the UN/ILO figures, which Eurostat and the CIA World Factbook uses because at least there is a common definition though agreed that there are obviously different circumstances in each country. But I will stand by the ILO numbers otherwise comparisons on the relative strengths of an economy and its ability to absorb the unemployment numbers and manintain capital investments are useless. Which any central bank and national stock markets would find anathema.

Fuchur on :

I think one has to clearly differentiate between the deal itself and the way it came to be. The pipeline deal is generally considered a good thing for Germany - and it's hard to argue otherwise. Francis' counter-argument "[i]it makes Germany heavily dependent on Russia's state-controlled energy monopoly Gazprom[/i]" doesn't make sense to me: Germany is dependent on Russian gas because, well, it needs gas. If the pipeline wasn't there, we'd still need the gas - we'd just not be able to get it so easily. Besides, relying on Middle East oil instead is hardly a better alternative. And (as Francis mentions), it's really not just a one-sided dependence: When Gazprom invests billions in building a pipeline, they have a certain interest in keeping it filled in order to get their money back. Also, a pipeline is not an oil-tanker that can be sent anywhere in the world. An important point of criticism is that the pipeline increases Russia's leverage against states like Ukraine, Belorus, Poland etc., because now Russia has the chance to "starve" Ukraine, and still deliver gas to Germany the other way around. But then again, Germany has no moral obligation to place itself into a hostage situation for the sake of Ukraine, has it? I guess that's the main reason why Germans are somewhat lenient towards Schröder's behavior: It's not as if he had secretly pushed through an unpopular and questionable deal against the will of the people. The deal would have been signed anyway, if not under Schröder, then under the next Chancellor. The way he did it was lousy and ignoble - but generally, there was no harm done.

Reid of America on :

The main reason German's aren't concerned about Russia is that they are far more concerned with their carbon footprint and the phantom menace of global warming. Switching from coal to natural gas is a must for lowering CO2 emissions so into Russia's arms Germany will run. Germany and Europe are suffering from climate change dementia. They are going to destroy their economies to avoid a phantom menace. Good luck! The dynamic nations of the world will not be joining Europe's grand delusions.

Volker on :

Well, our "dementia" is in fact generating jobs and your "dynamic nations", by which I think you mean the U.S.A., is on the brink of a recession.

Pat Patterson on :

Germany's unemployment rate, in the last quarter, dropped from 8.7% to 8.6% according tho the methadology used by the UN conncected ILO which means the actual unemployment rate in Germany is probably around 10.4% using German methadology(Germany's Federal Employment Office). While the US unemployment rate, even in these rather difficult circumstances, didn't budge from the previous quarter of 5.0%. At that rate a .1% gain per quarter then Germany will create enough jobs to equal the percentage of Americans working in ten years or slightly less. Woohoo! Germans better hope that the US does not enter into a severe recession or there will probably be Turkish taxi drivers tooling around in overstock Cayennes and Caymans very soon.

Zyme on :

The american kind of low-end jobs (or a number of them at the same time) is not desired here. Thus you have a higher unemployment rate.

Zyme on :

The last sentence was intended to be "Thus we have a higher unemployment rate"

Pat Patterson on :

Are you implying that Germany does not have the kind of entry level or low level jobs that only industrially developed nations have? Right away it should be noted that Germany has over three times as many people by percentage working on farms as the US, jobs which are not usually considered highly skilled and in fact might be considered dead end. If that were true then the per capita GDP of the nation with a preponderance of these kinds of jobs would be lower as than the nation that has more high value jobs. Except in this case the per capita GDP of Germany is, as of 2007, $34K while that of the United States is $46K. Those low level jobs, working at Starbucks in the US or Tesco or ASDA in Germany, seem to be a lot more productive in the US than in Germany. And since it is a given that Germany generally exports more on a percentage basis of value added goods then the difference in per capita GDP become inexplicable. Low level, semi-skilled or even unskilled labor usually pulls down the the average not increase it or countries like Haiti and Bangladesh would have both the highest GDPs in the world but also the highest percentage per capita of GDP.

David on :

"The dynamic nations of the world will not be joining Europe's grand delusions." As a coastal dweller, I wish you were right, but the evidence is overwhelming. This is the greatest crisis we face on the planet, and the US should be taking a leadership position.

joe on :

I guess we are all just going to die.

Oscarinho on :

One, maybe the most important reason why there is no furor about Schroeder's Gazprom connection anymore might be: Not only he is not in office anymore but his leadership style and the Red-Green "project" are history, both are, in fact, dead.

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