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The German economy depends on Russian gas. There’s a long history behind that.

What happens now to the Nord Stream 2 project?

- February 18, 2022

“If Russia invades … then there will be no longer a Nord Stream 2. We will bring an end to it.” These were President Biden’s words last week. German Chancellor Olaf Scholz, who stood next to Biden during the news conference, said very little — he didn’t mention the pipeline in his remarks but noted, “All things will be on the table.”

Economic sanctions appear to be the prime tool to punish Russian aggression in Ukraine — and the 764-mile Nord Stream 2 pipeline is a key coercion instrument in this toolbox. Owned by the Russian energy company Gazprom, the pipeline project has cost more than $8.4 billion. About half that price tag was reportedly shouldered by Gazprom, with five European companies covering the rest. Construction was completed in 2021 and Russia is eager to start operating the pipeline.

Germany’s politicians remain deeply divided on what to do — a likely reason for the German chancellor’s silence. Why would Germany risk losing its reputation as a reliable NATO ally by prioritizing the Nord Stream 2 project? Here’s what you need to know.

Russia may be about to invade Ukraine. Russians don’t want it to.

It all began with the 2003 Iraq War

The story starts in the early 2000s, in the wake of the U.S. invasion of Iraq, when German Chancellor Gerhard Schroeder famously sided with French President Jacques Chirac and Russian President Vladimir Putin in opposing the U.S.-led intervention.

Because Germany had opposed the U.S. invasion of Iraq, it thought its oil and gas needs would no longer be fully taken into consideration by many oil-rich countries in the region that were sympathetic to the U.S. plan. And yet, there was Russia — an ally in the anti-U.S. coalition, and one of largest energy exporters in the world. It seemed like a no-brainer at the time to the German government to replace Middle Eastern oil and gas sources with Russian ones.

Schroeder lost to Angela Merkel in Germany’s 2005 federal election. He and many of his collaborators moved into the private sector and used their new positions to strengthen Germany’s connection with Russian resources, including working with Russian energy giants Rosneft and Gazprom. In 2017, Schroeder became the new chair of the board of Rosneft, and this month, he was nominated to become a Gazprom board member. His former minister for economic affairs, Wolfgang Clement, became a board member of RWE, a German electricity giant.

Others within Schroeder’s inner circle continued to be influential in government politics. These officials were instrumental in drafting the September 2015 agreement that allowed for the construction of Nord Stream 2 — despite criticism and warnings from the United States and other countries.

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Is Nord Stream 2 critical to Germany’s energy needs?

The German government in 2015 argued that the pipeline project would provide the country with the energy security it badly needed. If Russia blocked the transit of natural gas via Ukraine and the existing Jamal pipeline, Germany would still get its energy. Moreover, if Germany hoped to realize its “green energy revolution,” that meant getting rid of coal and nuclear energy production — and that also meant finding a quick substitute: Russian natural gas.

But from the start, Nord Stream 2 was a geopolitical risk. In 2020, Germany received 56.3 billion cubic meters of Russian gas through the existing pipeline, about 50 percent of its natural gas needs. Many analysts say Germany would find it difficult to replace this supply in the short to medium term — if Russian gas stopped flowing, Germany’s gas reserves would be gone in six weeks. This suggests Germany is highly dependent on Russian gas and potentially vulnerable to Russian influence.

Ostpolitik and East German pro-Russian sentiments

Decisions by Schroeder and his entourage are not the only reason for Germany’s dependence. Other factors pushed Germany to move forward with the Nord Stream 2 project and (for now) stick with it.

First, a romantic idea of the benefits of “Ostpolitik” is still going strong in influential center-left circles in Germany. Conceived by West Germany Chancellor Willy Brandt in the 1960s, Ostpolitik sought greater contact with the Soviet leadership.

“Wandel durch Handel” — “Change through trade” — was a key premise of the policy. “The walls erected by the East should … be broken through in as many places as possible by the flow of ideas, people and goods,” Brandt argued. All of this, he insisted, would lead to “a transformation of the other side.” Many Germans, nearly 50 years later, believe that Nord Stream 2 could serve a similar function.

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Second, certain age groups in the former East Germany have deep sympathies with Russia. While negative memories of Soviet control predominate in other former Warsaw Pact countries such as Poland and the Baltic States — and threat perceptions of Russia run high — many East Germans don’t share these feelings.

In 2015, a year after the Russian annexation of Crimea, a Pew Research Center survey found that 40 percent of East Germans still trusted Putin, compared with 19 percent of West Germans. And 42 percent of East Germans also supported an immediate lifting of Russian sanctions, compared with 26 percent of West Germans. Many of them say that Russia was unfairly treated after German reunification and that Russia today deserves the same respect as the United States.

Given these divisions, what happens now? Scholz appears to be considering ways to decrease Germany’s dependence on Russian gas. The government is looking at plans to build a liquefied natural gas terminal on Germany’s northern coast. These terminals could hold gas from the United States and Qatar.

If Russia launches an invasion of Ukraine, it looks unlikely that Nord Stream 2 will start operating anytime soon. But it will not be an easy decision for Germany — and maybe not a definitive decision either.

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Marina E. Henke (@mephenke) is professor of international relations at the Hertie School in Berlin and director of the school’s Center for International Security (@hertie_security). She holds a PhD from Princeton University and has published widely on topics related to European security and defense policy and transatlantic relations.