Tag Archives: Germany

“Neue Neue Ostpolitik” My BPJ piece on German fury at Senate NS2 sanctions

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The US Senate’s decision to expand sanctions against Russia triggered indignation in Berlin, throwing Germany’s geopolitical ambitions over the Nord Stream 2 project into sharp relief.  Read below or get the App.   My other articles at Berlin Policy Journal  

“Neue Neue Ostpolitik”  

Berlin – July 21, 2017    By: Thomas O’Donnell —  On June 15, the US Senate approved an act to sharply expand sanctions imposed on Russia in retaliation for its intervention in eastern Ukraine and annexation of Crimea in 2014. The broadly bi-partisan move that enshrined Barack Obama’s earlier executive orders – intended as a response to Moscow’s alleged cyber interference in US elections – was a stunning rebuke to US President Donald Trump’s Russia policy, essentially taking a broad swath of foreign policy out of his hands. Continue reading

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Pipe Dream? Polish ruling complicates Nord Stream 2 pipeline for Gazprom & EU partners [My Berlin Policy Journal piece]

bpj_online_odonnell_nordstream2_cutHere’s my latest analysis in Berlin Policy Journal (German Council on Foreign Relations -DGAP).Pipe Dream? The Nord Stream 2 pipeline project is in danger of being derailed.
THOMAS W. O’DONNELL , SEPTEMBER 22, 2016 

A pipeline project to double Gazprom’s export capacity to Europe has always been controversial. A recent ruling by Poland’s competition authority could seriously undercut the support it has accrued, leaving its European backers at odds.

The proposed Nord Stream 2 pipeline project has bitterly pitted European states that back the project, including Germany, the Netherlands, Austria, and France, against project opponents, including Ukraine, Poland, and other former Soviet-bloc states. The project aims to double the capacity of the existing huge, 55-billion-cubic-meter-per-year Nord Stream 1 pipeline, running in parallel to it under the Baltic Sea from near St. Petersburg in Russia directly to Greifswald in Germany.

This dispute has exposed two very different views of Gazprom, Russia’s state-owned gas-export monopoly, and of Vladimir Putin’s Russia itself – one side sees it as a “necessary” and “reliable” energy supplier, the other a dangerous and manipulative adversary. This dispute is but one more collision inflicting lasting harm on the European Project.

Polish competition authority rejects project

The latest row involves a ruling in late July by the Polish Office of Competition and Consumer Protection (Urzed Ochrony Konkurencji i Konsumentow, or UOKiK) rejecting an application by five private western European energy firms proposing to partner with Gazprom to build and operate Nord Stream 2. The firms are Germany’s E.ON (soon to be Uniper) and Wintershall, Austria’s OMV, Anglo-Dutch Shell, and France’s Engie.

Shortly before the Polish announcement, the five companies agreed to withdraw their association proposal to avoid UOKiK initiating a legal process against them. The commission’s president, Marek Niechcial, declared categorically on August 12 that the Polish rejection was definitive, asserting “This will stop the [Nord Stream 2] deal.” The five firms have nevertheless made it clear they are seeking a strategy to work around the decision, and expect to proceed as planned. Gazprom has said the same.

So why go through this proceeding in the first place? To understand these events better, I spoke with several experts and diplomats working on these matters in Moscow, Berlin, Washington, Paris, and Warsaw.

Commercial Arguments

An often-heard line of argument is that at least some of the five companies might actually have little commercial interest in the project, but need to preserve their relationships in Russia where they have large investments in energy projects. After all, the Kremlin has a track record of taking over projects from foreign partners with whom it has fallen out. A further theme in this vein is that Nord Stream 2 is not really needed in northwestern Europe, even though the Groningen field in the Netherlands and Norway’s reserves in the North Sea are declining, because future demand in northwestern Europe is overestimated and Liquefied Natural Gas (LNG) will be available from the United States. This view led to press speculation that the five firms likely welcomed the Polish decision, allowing them a graceful exit.

However, virtually all the experts I spoke with had no doubt Nord Stream 2 would be a lucrative commercial enterprise over the long run, and that the five firms seem genuinely enthusiastic. Continue reading

Bypass Operation: Nord Stream 2, Russia-to-Germany pipeline deal, raises questions

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Here’s my latest at Berlin Policy Journal (DGAP):  With Nord Stream 2, Russia’s President Vladimir Putin is nearing his goal of cutting Ukraine out of the gas supply picture.  October 20, 2015

On 18 June, during the annual St. Petersburg International Economic Forum, an agreement was signed to build a controversial new “Nord Stream 2” pipeline under the Baltic Sea that would go directly from Russia to northern Germany, with a capacity of 55 billion cubic meters (bcm). The project, which consists of two segments that would run along the same route as the existing two segments of the 55 bcm Nord Stream line, completed in 2011, has met with strong opposition from energy officials in Brussels, as well as leaders in Ukraine and some other EU states.

Indeed, the agreement between Russia’s Gazprom and a consortium of German, Austrian, French,, and Anglo-Dutch companies came as a surprise. After all, in January 2015 Gazprom announced it had abandoned the project, blaming both the falling price of gas over the previous year and anti-monopoly restrictions in the EU’s Third Energy Package, which prohibit suppliers of gas from also owning pipelines delivering it. This provision has prevented Gazprom from ever filling the original North Stream more than half way.[1] In retrospect, the sudden signing of a Nord Stream 2 agreement only six months after the project was supposedly abandoned, plus the fact that the consortium foresees a quick start reveals the prior cancellation to have been a political ruse. Continue reading

Containing Gazprom: Putin may be overplaying his hand on gas – but no thanks to Berlin and Paris

Russia’s President has used Europe’s dependence on Russian gas as a powerful geopolitical lever. But energy geopolitics is a risky game, especially with the world awash in cheap gas – and Brussels now poised to take advantage of opportunities to permanently slash Gazprom’s market share in Europe.

Russia’s president has used Europe’s dependence on Russian gas as a powerful geopolitical lever. But energy geopolitics is a risky game, especially with the world awash in cheap gas – and Brussels now poised to seize opportunities to permanently slash Gazprom’s market share in Europe.

Here is my article in today’s Berlin Policy Journal. Continue reading

A Strange “No!” Alignment: Greeks, IMF and Washington v. Berlin and Brussels

What a strange rebellion against the international financial order.  On Sunday 5 July, Greece voted “No!” by a resounding 61% to the bailout conditions insisted upon by Berlin, Brussels and “the creditors.”  But, what is truly unique here is the alignment of international forces for renegotiation of Greek debt.

Throughout the post-War era, whenever it came down to imposing “discipline” on other small, debt-defaulting states, the most intrepid champions of the norms of the international financial order have consistently been Washington and the IMF (just ask Argentina’s Mrs. Kirchner, she’ll tell you).

Yet, look who agrees with the Greeks that their debts–in their present magnitude and structure–are impossible and potentially disastrous for the country: Continue reading

MY REPORT | Washington Viewpoints: Assessing Berlin’s Leadership on EU Energy Security

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Merkel and Obama answer questions. 6 June 2014 [Denver Post]

During April and May, I interviewed over a dozen Washington-based experts in European energy and geopolitics.  My report on these interviews–along with some policy proposals in light of Brussels’ “institutional incapacities” and the “fundamental contradictions” of German leadership–is here: [PDF with a Table of Contents for navigation] or at the AICGS website [HTML].

This work was conducted as a resident fellow of the AICGS (American Institute of Contemporary German Studies) in Washington, DC and supported by a generous grant from the German Academic Exchange Office (DAAD) with additional support from the Foreign Office.  My thanks to the AICGS for their collegial support and warm hospitality.

Next, the plan is to interview in Berlin and perhaps Brussels energy experts and officials for their viewpoints on European energy vulnerabilities and on their work with the U.S. side.

US Experts on German & EU Energy Vulnerabilities (My D.C. seminar)

Merkel and Obama at G7 - the main topic was Russia and Ukraine

Merkel and Obama at G7. Main topic was Russian threats to EU and Ukraine

An AICGS workshop with Dr. Thomas O’Donnell was held on May 27 in Washington, DC with a lively full-room attendance.

O’Donnell presented preliminary results of interviews he conducted in Washington during April and May to hear candid views of US energy-and-geopolitical experts on German and the EU energy policies.  The main topics were (1) European natural-gas vulnerabilities in light of the Ukraine crisis and dependence on Russian supplies and (2) implications of Germany’s commitment to a transition to renewable energy called the Energiewende.   Continue for Workshop PowerPoint & written Summary –>  Continue reading