On 14 February 2023 the French-German TV channel Arte presented a detailed programme on GAZPROM PJSC, the world’s largest energy company, owned by the Kremlin and its mafia gang of secret service personnel, mostly from Vladimir Putin’s base in St Petersburg, the former Leningrad. Based on numerous interviews with experts from Europe and the USA, the film gives an impressive, but also shocking, insight into Putin’s use of energy as an instrument of raw power.
West Germany’s ‘New Ostpolitik’ and Soviet oil and gas
Owning the world’s largest reserves of gas, the Soviet Union and later Putin’s Russia have been selling this precious raw material to earn hard currency, mostly to Western Europe, particularly to the Federal Republic of Germany. The Soviet Union’s sale of gas, oil and other raw materials provided a large degree of its budget – some experts estimated up to 60%.
West Germany’s ‘New Ostpolitik’, which paved the way for the Conference for Security and Cooperation in Helsinki (1975) and led to the recognition of Europe’s post-war borders, had an important economic dimension. West German companies would build pipelines and provide the Soviet Union with experts and modern technology to develop oil and gas fields in Siberia. In return, the Soviet Union would provide Western Europe (West Germany in particular) with oil and gas deliveries. The pipelines ran through Ukraine, Poland and Czechoslovakia. West German companies, like the steel producers Thyssen and Krupp and the chemical company BASF, were the driving forces behind the country’s various governments, led either by the Social Democrats or the conservative CDU/CSU.
The underlying idea was that intensified economic cooperation would not only guarantee the ‘secure supply’ of energy, but also open up political opportunities for improving the situation in divided Germany. And indeed, by the end of the 1980s, with Mikhail Gorbachev’s Soviet Union struggling to prevent its economic collapse and the country’s disintegration, Chancellor Helmut Kohl managed to use this ‘interdependence’ and further monetary incentives like credits to bring about Germany’s peaceful reunification.
From its very beginning, West Germany’s ‘new Ostpolitik’ aroused suspicion in Western countries, especially in the USA. In dealing with the Soviet Union, Bonn wanted to use the ‘carrot’ of economic cooperation, while relying on Washington to provide the ‘stick’ of nuclear deterrence. The US governments of Ronald Reagan and Jimmy Carter tried to prevent West Germany from building those oil and gas pipelines, but neither succeeded.
The post-Soviet era
During President Yeltsin’s rule in the 1990s, the Russian oil and gas business was run by several oligarchs, like Mikhail Khodorkovsky and Roman Abramovich, who, during the chaotic process of privatization, had gained access to the oil and gas fields, and became immensely rich.
Putin, who became Boris Yeltsin’s successor at the turn of the millennium, had studied law at Leningrad State University and in 1976 had handed in a dissertation in economics on the importance of energy exports. His career in the KGB started in Dresden then in East Germany from where he experienced the breakdown of Soviet influence. Having returned to Leningrad in February 1990 his political career took off, first under the ‘democrat’ Major Sobchak.
As researchers Catherine Belton and Karen Dawisha have described in detail in their respective books, Putin’s task was finding money for the city by selling raw materials to the West. Most of this income did not reach ordinary people but went into the pockets of influential people, particularly the Secret Service, who were closely cooperating with the criminal gangs who controlled St Petersburg’s harbour. Putin’s ‘friendships’ and political connections became the backbone of his later career in Moscow. Many of his KGB friends from St Petersburg would earn leading positions, after President Putin had managed to ‘disarm’ the oligarchs and bring the media and key industries, especially oil and gas, under the control of the Kremlin.
After the Soviet Union’s collapse and the liberation of East European countries, the Russian Federation had to face the new reality that the energy pipelines towards the West, built during Soviet times, now ran through independent countries like Ukraine and the Czech Republic. Particularly the Ukraine caused major problems. In May 1954 Stalin’s successor Nikita Khrushchev had given the Crimea to the Ukrainian Socialist Soviet Republic. After the collapse of the Soviet Union the Crimea was now part of Ukraine and with it the former Soviet Black Sea navy.
In addition, some 30% of the Soviet nuclear arsenal were based on Ukrainian soil. In 1993, in return for Russian assurances of Ukraine’s ‘territorial integrity’, the nuclear arsenal was withdrawn to Russia. After lengthy negotiations an agreement was reached on the partition of the Black Sea fleet and a leasehold of the fleet base in Sevastopol to Russia until 2024. During those complicated negotiations the oil and gas pipelines through Ukraine and Russian energy sales to the country played a crucial role.
It was not only towards Ukraine, but also to neighbouring countries Georgia and Belarus. that the Kremlin effectively used its energy deliveries as a ‘strategic weapon’. Suddenly raising prices or cutting supplies were used as instruments for blackmail. In the case of Ukraine this problem became even more intense after the ‘Orange Revolution’ (November 2004 to January 2005) when the politicians in power sought to follow Poland’s example and join the West. The Kremlin no longer had a pro-Russian leader with which to control Ukraine.
Ultimately, it was not the question of Ukraine’s membership in NATO but the prospect of a Western-oriented neighbour, seeking a democratic future as a free country, which ignited Putin’s fury. Democracy in Ukraine would seriously endanger his ‘fake democracy’ at home! So Putin’s next step was the annexation of Crimea and the start of the war in South-Eastern Ukraine in 2014, which culminated on 24 February 2022 in the major assault against Kiev and ‘total war’.
Gazprom and Germany
Putin’s relationship with Germany is special. His family severely suffered from Nazi Germany’s 900-days siege of Leningrad during World War II, his only stay abroad was his KGB post in East Germany, where he practised speaking German fluently. One of his East German Secret Service (Stasi) partners, Mathias Warning, became a leading figure in Putin’s energy network. From March 2006 to July 2015 he was managing director of Nord Stream AG, the company managing the first gas pipeline linking Russia and Germany through the Baltic Sea.
As I wrote before, Putin’s relationship with Chancellor and ex-Chancellor Gerhard Schröder is an exceptional case – the pinnacle of Putin’s secret service career. Having learned to charm and bribe important people to promote Soviet interests and fight the West, Putin managed to engage Schröder to achieve some of his most important strategic goals. He needed the Nord Stream pipeline not only to increase Western Europe’s, and in particular Germany’s, dependence on Russian energy deliveries. He also wanted to be no longer dependent on the cooperation of the transit countries, Ukraine in particular.
Schröder, be it for personal sentimental reasons, or his goal to support German businesses or just for personal greed, became Putin’s willing executor. Working for Gazprom, he lobbied influential politicians in Western and Northern Europe. As the Arte film shows, leading Social Democrats in Sweden and Finland, were persuaded to turn around their country’s opposition towards the pipeline.
Schröder and his SPD colleagues from Hanover as foreign ministers in the ‘Grand Coalition’ with the CDU/CSU (Frank-Walter Steinmeier, 2013–2017 and Sigmar Gabriel, 2017–2018) pursued their ‘Russia first’ policy even after Putin’s annexation of the Crimea (2014). Chancellor Merkel (CDU), while trying to stop the armed confrontation in South-Eastern Ukraine through intensive diplomacy together with France, applied only ‘modest sanctions’ and continued Germany’s ‘Russia first’ policy. She also supported building the Nord Stream 2 pipeline. Incredibly, the German government had allowed its huge gas storage facilities to be sold to Gazprom in December 2013, thereby increasing their dependency on Russia.
Already before February 2022 Russia had slowly but significantly diminished its gas supplies to Germany. After the massive attack on Ukraine, both Nord Stream pipelines were damaged by several explosions, actually stopping Russian gas deliveries. There has been no official explanation for this attack. However, it seems logical that Putin, by completely cutting off gas supplies to Germany before the winter, wanted to apply pressure on the government in Berlin by stirring unrest in the Germany population, fearing it would freeze in a cold winter, and increase tensions within NATO. For him Germany seemed to be the weakest link in the West and he had practised his policy of blackmail before, using gas as a weapon towards Russia’s western neighbours.
Yet, within record time Germany managed to build facilities on the North Sea and Baltic Sea coasts to receive liquid gas. This, with a relatively warm winter (thanks to climate change?), avoided an actual gas crisis.
Germany’s Russia policy in tatters
Putin’s massive aggression and war crimes in Ukraine have managed to destroy the legacy of 50 years of German’s policy of ‘Russia first’ Ostpolitik. It has also shattered German convictions that after its peaceful reunification there would be ‘eternal peace’ in Europe, supported by a close ‘partnership’ with Putin’s Russia. Germany’s energy-hungry business community and its leading politicians in the ‘Grand Coalitions’ of CDU/CSU and SPD neglected the obvious fact that since Putin’s arrival in Moscow he used brutal military force, first in Chechnya in 1999, and numerous killings of critical journalists and political opponents at home and abroad. Ignoring the repeated warnings of East European neighbours, namely in Poland and the Baltic states, has severely damaged Germany’s standing in Europe.
Putin’s open nuclear threats have also reminded Germany’s politicians of the old truth of the Cold War era: that its ultimate security depends on the US nuclear ‘umbrella’. At the same time, Putin’s shameless threats seem to have some impact, particularly among the right and left wing parties (AfD and Linke) and in Eastern Germany, where people call for ‘peace negotiations’, while the aggressor continues to occupy foreign territory, ferociously attack Ukraine’s infrastructure and murder civilians.
Chancellor Scholz spoke of a Zeitenwende (turning point) for Germany on 27 February 2022. As his newly appointed defence minister, Boris Pistorius, pointed out, Germany will need not 100 but up to 300bn Euros to modernize its army, which had been neglected over 30 years, and that it will take many years to achieve this goal. He also seems to encourage reintroducing general conscription, since the Bundeswehr as professional army cannot fill its vacancies. What a dramatic change.
Still, it seems not clear whether the German public and its political class have fully understood the implications of Putin’s double-edged super power aggression – nuclear weapons and energy as a weapon.