Nord Stream has always been at the root a geopolitical project. It will give Russia the ability to deliver almost all of its current gas exports to Western Europe under the Baltic Sea directly to Germany, bypassing the transit pipeline through Ukraine. This would deprive Ukraine of $ 2 billion a year in gas transit charges, vital for an economy of just $ 155 billion.
Russian Gazprom said supplies could continue throughout Ukraine – if European customers buy additional Russian gas (EU policy is to reduce dependence on Russia). Putin warned that Ukraine must show “good will” – read: do Kremlin orders – for the transit to continue. Kiev rightly fears that for Moscow no longer having to depend on Ukraine’s pipeline for lucrative energy exports will remove a major constraint on further aggression.
Joe Biden lifted the much-vaunted US sanctions on the pipeline company in May, saying they made no sense with the project already 90% complete when he became president. The deal unveiled days after welcoming outgoing German Chancellor Angela Merkel to the White House promised measures limiting Russian energy exports to Europe if Moscow used energy as a weapon or committed “further aggressive acts. Against Ukraine. He proposed a $ 1 billion “Green Fund” to support renewable energy in Ukraine, and said Berlin, with backing from the United States, would use its leverage to “facilitate an extension of up to to 10 years ”for the transit of Russian gas.
The agreement is flawed at all levels. Commitments to counter Russian bad behavior are vague, the green energy fund will not cover Kiev’s losses, and the offer of German aid to expand gas transit is just a ‘promise to try’ .
The optics are dismal. That Washington and Berlin strike a deal that is crucial to Ukraine’s interests without anyone from Kiev in the room is a gift to Putin’s narrative that it is good that the great powers decide the fate of the smaller ones. Even the timing, with the German elections in September, is odd. Surely it would have made sense to engage with the next Berlin government – possibly to include the Greens, who oppose Nord Stream.
So why did the White House strike a deal that also sparked bipartisan opposition in Congress? The response appears to be a push by some advisers to “park the Russia problem,” freeing the United States to focus on the main threat: China. Russia, they say, is a declining power whose influence, beyond fossil fuel reserves, comes from a nuclear arsenal that cannot be used in practice. This argument is also wrong. The last few years have shown that Russia threatens European, and therefore global, security. He retains a large conventional army that he is ready to use.
Far from uniting democracies, as Biden promised, the deal has divided the EU east-west, with Poland and neighbors such as the Baltic states deeply concerned about the implications. More importantly, the failure to resist Russia’s annexation of Crimea and attacks on Ukrainian sovereignty sets a dangerous precedent that will be noted in Beijing, which has its own territorial claims to its neighbors. Responding to the Chinese threat means responding correctly to the Russian threat – not trying to wish it far.