Because of its dependence on Russian gas, Germany still has to act very cautiously towards Ukraine
Nicollo Machiavelli – the man who gave his name to unscrupulous but pragmatic political action – would be very unimpressed. But irony is heaped on tragedy when we consider that the European Union is now funding both sides in the travesty that is the war in Ukraine.
On the one hand, the EU has pledged €1.2 billion in support to help the Ukrainian people withstand Putin’s outrageous and illegal invasion. But energy industry sources tell us that since Putin’s February 24 invasion, the EU has spent €44 billion buying Russian gas and oil.
This war in Ukraine will continue to affect us all in many ways. But it’s debatable whether Germany — a deeply energy-poor industrial powerhouse — is among the most vulnerable here. Germany was the largest EU buyer of Russian energy.
Reluctant to add to the litany of bad news on a bank holiday weekend, the shadow of the economic recession, largely the result of this war, is now hanging over the whole of the EU.
Still, EU funding for both sides in this shocking war may be on the verge of an end. Curiously, it could be a miscalculation on Putin’s part rather than a rise in morale in the EU that could prompt such a shift.
Last Wednesday, Russia halted gas supplies to Poland and Bulgaria for failing to comply with Putin’s March 31 demand that all gas be paid for in rubles. The thought is that the EU has options to buy oil elsewhere – but many mainland countries have few options when it comes to their dependence on Russian gas.
EU leaders responded with expected loud rhetoric to this new attempt by Putin to divide and rule. Commission President Ursula von der Leyen warned against tolerating this “blackmail” from Moscow.
Still, informed energy sources said they believed energy buyers for Hungary, Germany, Austria and Slovakia were preparing to meet Putin’s ruble demand. There were some early ambiguities from Ms Von der Leyen’s office as to whether this would flout EU-agreed sanctions against Moscow.
On Thursday, however, the commission’s chief spokesman gave clear instructions that fulfilling Putin’s demand would violate sanctions.
When the tanks rolled in on February 24, Germany was perhaps the worst energy supplier of any EU country, with 55 percent of its gas supply coming from Russia. There are plans to rapidly reduce this to zero in the coming years, and Berlin recently reported that until now only 35 percent of its gas comes from Russia.
Getting a third of your gas from a warring nation is a difficult proposition by any measure. Germany’s central bank has warned that a sudden end to Russian gas supplies could cut Germany’s GDP by 5 percent, with tens of thousands of jobs lost in sectors like chemicals and steel.
As a result, the EU’s largest economy – and the fifth largest in the world – could quickly slide into recession. The consequences would soon be felt across the EU, including Ireland.
Chancellor Olaf Scholz has reasonably argued that the damage to Germany from a Russian gas embargo would hit its people far worse than any damage done to Russia. We are still stuck in the argument, much to the anger of President Zelenskyy, that any EU sanctions would have to do much more harm to Russia.
Gazprombank, the financial wing of the Russian state energy monopoly, has already been exempted from EU sanctions. This speaks to the bloc’s dependence on Russian gas, which at the start of the war was 40 percent of the EU’s.
It is easy to moralize about this dilemma, and it borders on the impossibility of remedying it. To be fair to Germany, Economy Minister Robert Habeck announced this week that his country was now able to forgo supplies of Russian coal, which accounted for 25 percent of Germany’s needs, and should soon be able to do the same with Russian oil to do what this was at 35 pcs.
But there is no quick fix for Germany with Russian gas. The coming weeks will tell us a lot about von der Leyen’s sanctions diktat and the needs of major economies to keep the wheels of industry turning. Many Western nations support the EU on sanctions, but others, like China, India, much of the Middle East and Africa, still trade with Russia.
On the other hand, German political leaders have also slowly come to terms with another legacy of the post-war era, namely a very limited engagement with military affairs in Europe. But like the energy issue, this is changing fairly quickly.
This week, the German Bundestag overwhelmingly backed plans to supply Ukraine with heavy weapons and complex weapons systems, including anti-aircraft equipment. The vote, passed 586-100, also means more material will be sent to partners in NATO.
This should lessen criticism of Mr Scholz for his early reactions to the invasion, with many accusing him of being weak in his support for Ukraine.
But all the signs are that things are about to get much worse before the end is in sight, and that EU unity will come under renewed pressure.
https://www.independent.ie/opinion/comment/germany-still-has-to-act-very-carefully-on-ukraine-due-to-its-dependence-on-russian-gas-41601860.html Because of its dependence on Russian gas, Germany still has to act very cautiously towards Ukraine