“What good is Nato if Germany is paying Russia billions of dollars for gas and energy?” tweeted Donald Trump on 11 July. Trump was surely referring to Nord Stream 2, the controversial deal between Russia and Germany, whereby Russia will pump natural gas direct to Germany through a new pipeline across the Baltic Sea. Trump reckons such arrangements make Germany a ‘captive’ of Russia. Is he right?
America isn’t the only country that’s getting hot and bothered about Nord Stream 2. Denmark and the Baltic States have also voiced concerns. The most vociferous opponent of the scheme is Ukraine. Russia currently pumps gas to Europe via Ukraine, but once Nord Stream 2 is up and running, in 2019 or 2020, Ukraine fears Russia will be able to cut off gas supplies through Ukrainian territory, costing the country crucial income and leaving it vulnerable to a Russian energy blockade. Given Russia’s annexation of Crimea and its ongoing destabilisation of Eastern Ukraine, these are hardly idle worries.
Germany already has a Nord Stream pipeline to Russia via the Baltic. Nord Stream 2 will double its capacity. This isn’t just a German project. French and Austrian firms, and Anglo-Dutch giant Shell have all helped to fund this 750 mile pipeline, which will provide a third of the EU’s energy needs. Poland shares Ukraine’s concerns about Nord Stream 2, for similar reasons. Russia also pumps gas to Western Europe via Poland, and the Poles will lose valuable revenue if and when Nord Stream 2 goes ahead.
So why is Trump objecting? Out of the kindness of his heart? Hardly. Poland currently imports around two thirds of its natural gas from Russia. The Poles are keen to broaden their range of energy suppliers, and become less dependent on the Russian Bear.
One solution is to build another pipeline across the Baltic, from Poland to oil-rich Norway. Another solution is to import gas by tanker, from even further afield. Last year Poland’s state-owned energy company signed a five year deal to import liquid natural gas from the US.
Nord Stream 2 will undoubtedly increase interdependence between Germany and Russia, but what Trump doesn’t mention is that this ‘captivity’ cuts both ways. Russian energy behemoth Gazprom is also investing heavily in this new pipeline. Germany (and Europe) needs Russian energy, but Russia needs German (and European) revenue.
Since Russia invaded Crimea, Angela Merkel has been robust in applying economic sanctions against Russia, yet with nothing much to show for it. When it comes to influencing Russian policy, maybe a closer economic relationship will have more effect.
That’s hardly the way Trump sees it, but Trump generally only sees what’s best for America – in the short term. Yet in the long run, is America really best served by his strategy of divide and rule? There may be some short term benefits for America if Nord Stream 2 runs into trouble, but in the long term improved relations between Russia and Western Europe is a far bigger prize for all concerned.
What good is Nato if Germany is paying Russia billions for energy? The answer is: all the good in the world. Trump is quite right to demand that Germany pays its fair share into Nato, but the money it’s spending on Nord Stream 2 is neither here nor there.
Nato’s military clout is crucial in deterring Russia from further incursions into Eastern Europe, but economic incentives like Nord Stream 2 are equally important. Trump’s supporters say he’s simply putting America first, but American business requires stability, not uncertainty and chaos. By testing the limits of the Nato alliance, and questioning Germany’s right to trade with Russia, Trump is playing a dangerous game.