Driven by self interest German business interests and government have propelled Europe towards a political and economic abyss – still again
Mathew D. Rose is an Investigative Journalist specialised in Organised Political Crime in Germany and an editor of BRAVE NEW EUROPE
Germany’s former chancellor Angela Merkel was until recently the figurehead of the EU neo-liberal juggernaut. Corporate media could not enthuse enough over the “EU leader” and “stateswoman” Merkel leading the EU to… well, to what? The answer has become all too clear since the criminal Russian invasion of Ukraine.
You hear and see nothing of Ms Merkel these days. She, who used to daily adorn the front pages of corporate media. No politician seems especially keen to be photographed or identified with her. Instead she is being airbrushed from public consciousness.
The EU hegemon Germany has also fallen into disrepute as the EU and the world discover that it has led Europe into a political and economic crisis of still unknown dimensions through energy dependency from Russia.
In Germany the political class tries to pin the blame on individual politicians and the other political parties. Merkel’s Christian Democratic Union attacks the Social Democrats, who carry some of the responsibility. However Germany’s eastward oriented business sector is a powerful lobby, especially within Merkel’s Christian Democratic Union. It was Christian Democratic Union governments, in various coalitions with the Social Democrats or Liberals (FDP), who realised the Russia fossil fuel policy. Anyone who understands Russian strategy in the state and private sectors knows that it is generous to all who hold their hands out. German political parties are there to be bought. That is their business model. The German political class may be leaders in this, but they were certainly not leading the policy making. That is done by major German corporations.
What is interesting about the criticism of Germany for this economic fiasco is it being led on a moral plain. There was no moral component at all. This event is not without a recent historical precedence. In 1939 Germany and the Soviet Union signed the Molotov-Ribbentrop Pact, which although a non-aggression pact, opened the door for Soviet raw materials – especially oil – to Germany enabling the Germans’ geo-political ambitions. The two nations were politically arch-enemies, which was later proven as the Germans did not respect their part of the bargain and invaded the Soviet Union in 1941 without a formal declaration of war before their surprise attack As the line in “The Godfather” so aptly describes: “It’s not personal. It’s strictly business.” Merkel’s various coalitions gave the deals with Russia the obligatory moral spin, but that is simply part of politics and corporate media.
To avoid any misunderstanding, I have always supported the re-integration of Russia into Europe – and still do. But Germany has not done this. Instead it played both sides to solely further its interests. While securing its supply of fossil fuels frlom Russia, it was instrumental in the Maidan event (just business – to protect German economic interests), pushed sanctions (which it blatantly violated where profit was to be had, and is part of the hostile military alliance that has expanded to the borders of Russia.
Germany’s goal with its deals with Russia was not geo-political dominance of Europe this time, but economic dominance of the EU. This became obvious with the gas pipeline Nordstream 2. Its predecessor, Nordstream 1, brought gas from Russia via an undersea pipeline through the Baltic Sea directly to Germany. Completed in 2011 it enabled Germany to emancipate its Russian gas deliveries from the long-standing gas system via Ukraine, the Czech Republic, and Slovakia. German corporations did not trust their politically unstable and endemically corrupt Slavic allies and wanted to insure Russian gas deliveries. Nordstream 1 was routed through economic zone waters of the more reliable Finland, Sweden, and Denmark. Originally a Russian/German consortium, a French and a Dutch company were sold part of the action, probably for political support in preparation for Nordstream 2 that was in preparation.
With the increasing demands to reduce CO2 emissions to prevent climate breakdown and the strong anti-nuclear-energy sentiment in Germany following the disaster in Fukushima (2011), German corporations assumed that by sabotaging widespread introduction of renewables in the EU, gas would be the fossil fuel of the future and set out to control the EU market. The financial structure of Nordstream 2 was much the same as it predecessor, with Gazprom holding 50 percent and the other 50 percent equally divided among Germany’s chemical company BASF and electrical utility E.ON, France’s Engie, Austria’s OMV, and Royal Dutch Shell. The project thus had the political backing of the Northern EU powerhouses. The route of the pipeline ran parallel to Nordstream 1, again circumventing the Slavic states. At the time the economic necessity of Nordstream 2 was questioned as the full capacity of the Nord Stream 1 pipeline had not been fully-utilized. The Germans were however a step ahead of the game.
They were not the only ones who understood this. Italy had similar plans for connecting to Russian gas with a “Southstream pipeline”. It would have run from Russia ro Bulgaria across the Black Sea, and from there via Greece to Southern Italy, bypassing Ukraine like Nordstream, but also circumventing Turkey. Interestingly, the EU Commission expressed vehement opposition to the Southstream pipeline, citing that it was non-compliant with the EU’s Third Energy Package. This stipulates that gas production and transmission must be managed by two different entities. In addition, third-party access to pipeline networks must be provided to competing gas suppliers. These conditions had been waived by the Commission for Germany’s Nordstream 1. The Commission also decided that the EU energy market rules also did not apply to Nordstream 2, allowing another official exemption from the EU Third Energy Package (later when this was challenged in the case of Nordstream 2, the German government itself simply created a sham company as a second entity). What Italy was not allowed to do, Germany was permitted to do twice. It is no wonder that in Germany the EU Commission is jokingly referred to among insiders as Germany’s “Ständige Vertretung” (Permanent Mission) in Brussels.
In 2015 the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Romania signed a petition to the EU Commission warning that Nordstream 2 would generate “potentially destabilising geopolitical consequences”. They were of course ignored. They don’t matter. German business interests do.
With both Nordstream pipelines and reducing Italy’s role in the European gas market Germany could play a key role in determining European gas prices, not to mention the profits as hub for most of the gas imported to Europe. It would also allow German industry an energy price advantage. This is why Germany’s Minister for Economic Affairs, Robert Habeck of the Green party, pushed through having (Russian) gas defined as “green” into the EU taxonomy in February of this year, shortly before the Russian invasion of Ukraine. Russian gas was clearly more than just a commercial project for Germany, it was about further increasing Germany’s economic and political dominance in the EU.
Germany’s industrial policy has been oriented towards gas. Today almost a third of Germany’s gas consumption is attributed to its chemical and pharma industry. Another 25 percent is converted into electricity. The German government has been subventioning much of its industry, also heavily reliant on electricity, by exempting them from paying the nation’s renewable electricity surcharge, which finances the expansion of clean energy sources. With the planned closing down of its nuclear power plants and phasing out its massive use of coal to produce electricity, Germany put all its bets on gas – its stalled renewables programme was nothing more than virtue signalling. Germans’ increasing use of electricity for cars, heating, domestic, industrial use, and liquid hydrogen prodection were to be powered mainly by gas.
It is therefore no surprise that the German traffic light coalition (Social Democrats, Greens, and Liberals) has fought every measure to stop Russian imports of gas, oil and coal. It was only under immense pressure that it cancelled (for the time being) the opening of Nordstream 2. Germany facilitated the carve out of Russian fossil fuels for Europe in the international sanctions against Russia. It is doing its best to limit weapon deliveries to Ukraine as not to offend the Russians so that a return to economic Plan A can be easily re-initiated. The problem appears to be that Germany has no Plan B. So the German government is doing what they have been doing about climate breakdown:: nothing, hoping somehow they can sit this out. No measures have been introduced to reduce energy consumption in Germany. Not even a symbolic speed limit for the autobahn. But kicking the can down the road as the disgraced Merkel always successfully did may not function this time.
This is a double disaster for German mercantilism. Already Germany is being forced to buy expensive American liquid natural gas and oil. While competitors in the developing nations will be purchasing discounted Russian fossil fuels, German corporations will be paying much more. This will affect Germany’s competitiveness.
Then there is the geo-political aspect. With regard to the NATO, Germany has already penitently once again subordinated itself to the commands of the US, including buying billions of dollars of US armaments – not European weapons systems. Should Russian fossil fuels be cut off, then German industry’s dependency on the US will increase. The Americans have been steadily turning up the heat in a trade war with China. China is not only a crucial market for German exports, and provides cheap labour for parts used by German industry, but German corporations have made massive investments in China. It is existentially crucial for German corporations. These are all under threat with this increased fealty to US interests. Add to this that the next president of the United States could well be Donald Trump.
There is a certain irony in the current conflict. Germans have a deep seated dislike of its Eastern neighbours that goes back a thousand years. If you have any doubt about this, just compare how the Germans dealt with civilians and prisoners of war in the East and West in the Second World War. In the eyes of the Germans in their Nazi euphoira the Slavs were the epitome of non-Aryan “inferior people” (Untermenschen). It is even becoming once again permissible to openly make racial attacks on Russians, as recently on a prime talkshow on German state television. The German Florence Gaub, who is Deputy Director of EU Institute for Security Studies explained:
“We must not forget that even if Russians look European, they are not Europeans – in the cultural sense – they have a different relationship to violence, a different relationship to death. there is no liberal post-modern approach to life”
But business being business, one could make deals with Stalin as well as with Putin. Morals are for wimps. Now Germany’s political class is under political attack by Slavs who have called out German moral posturing. German president, Frank Walter Steinmeier, who corporate media had recently built up as Germany’s new leading statesman, was deeply involved in the Nordstream 2 affair. He did what politicians do in such a case: admitted he had made an error. German corporate media gushed with admiration. Steinmeier thought he could move on. It must have come as a shock when his planned visit to Ukraine had to be cancelled because Ukrainian authorities did not want to welcome him. Zelensky and his ambassador in Germany are constantly railing against German politicians’ hypocrisy, especially the German chancellor, Olaf Scholz. This is humiliating for Germany, which has no serious interest with regard to Ukraine, as there are at least a dozen Eastern European nations eager to have their populations exploited by German industry. This is something many Germans resent.
A further humiliation has been Poland, another Eastern nation with an historical enmity towards Germany. While Germany has been guiding the EU into an economic abyss, Germany, the EU, and corporate media have been pounding away at Poland’s lack of respect for LGBQT rights in Poland. Every upstanding EU liberal democrat Poland was being unjustly thrown in the same category with Orban’s Hungary. Now Poland with its almost three million Ukrainian refugees, robust support for Ukraine, and unwavering criticism of Germany’s Russia policy, is the hero, not the EU’s benign, enlightened hegemon Germany.
One should have no illusions about the German citizenry’s attitude towards the Russian invasion. Beyond the liberal metropolitan elite with its atavistic Russian racism, most Germans have the same attitude towards the war in Ukraine as to climate breakdown: the government should do something, but entitlements such as cheap petrol and diesel, no speed limit on the autobahn, inexpensive flights and foreign holidays should not be affected. Which ever political party violates these entitlements probably needs not participate in the next election. That explains why there have been no real changes in political policy and polls.
We shall see how and if Germany – and the EU – extricate themselves from this crisis. As usual, none of the right questions are being asked. Especially if letting the EU be dictated to by German business interests and its neo-liberal diktat facilitated by a highly corrupt EU political class is such a good idea?
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