It’s not just about Nord Stream: Why Putin has good cards in gas poker

The price of gas is not so high because of Russia alone – but it would be up to the Kremlin to bring it down. But he doesn’t. Greens boss Baerbock speaks of a poker game. And the Russian President has a good hand in this. Also because Germany gave it to him.

Consumers and entrepreneurs have been looking at the gas price for weeks – how far will it go up? The consumer advice center calculates that the costs per household could increase by 200 euros. Eon is no longer awarding new gas contracts and several energy companies in the UK have already gone bankrupt. So it makes sense to look for someone to blame. Green co-leader Annalena Baerbock thinks that she has found this in the Russian President – she insinuated that Vladimir Putin was playing poker with the EU. Russia is throttling gas deliveries so that Germany can approve the Nord Stream 2 pipeline more quickly.

She is not alone in making this assessment, even if the situation is far more complicated. Russia expert Stefan Meister from the German Foreign Policy Society says: “The Kremlin is trying to use the emergency situation to get through the approval process faster.” Numerous politicians in the EU Parliament have formulated it similarly, as did other Greens in addition to Baerbock, such as the deputy group leader Oliver Krischer. But Meister also points out that Russia is only trying to take advantage of a crisis here, but has not brought it about itself.

Russia is by no means in a position to set the gas price at will. Rather, several problems have concocted here to form a “perfect storm”. The short version: The gas demand is higher than expected because last winter was particularly cold and after the Corona crisis the Chinese economy is now picking up faster than expected. As a result, the Chinese are buying up almost all of the liquefied natural gas from the US, while large European natural gas suppliers such as Norway and the Netherlands are weakening due to pipeline work. In addition, there was little wind in the summer and therefore less green electricity was produced and more gas was used. Therefore the memories are not as full as usual.

“I watch a political game”

At first glance, Russia is not guilty of anything. The Gazprom Group is complying with all delivery obligations. According to Putin, there is even a little more gas flowing than agreed. Nevertheless, EU Commission chief Ursula von der Leyen has just recently complained that Russia had injected much more gas in earlier years when demand was higher. So why not now?

There are at least two reasons for this: One has to do with contractual arrangements. Russia is annoyed that the EU no longer wants to conclude long-term supply contracts. If the EU can be persuaded to do so, more gas should flow towards Europe. The other reason has to do with Nord Stream 2. Although the pipeline was completed a few weeks ago, no gas has yet flowed through it. The approval of the Federal Network Agency is still missing. It could take months until this is available. “You now try to exert pressure,” says Meister. Putin said, for example, that Russia could deliver more once the pipeline was up and running. Although more gas could already be pumped through Ukraine to Europe.

Russia knows that with a new federal government, in which the Greens and FDP are involved, it could be more difficult to get the approval, says Meister. “I already see a political game from the Russian side here”. A traffic light coalition could still stop the unpopular pipeline by denying approval. Because the Federal Network Agency is subordinate to the Ministry of Economic Affairs. And Baerbock has just said that the permit should not be granted because it violates EU law. According to this, the operator of a pipeline should not also pass the gas through it himself.

Point victory for Putin?

Behind all of this is the question of what Germany is actually gaining with the pipeline. The Greens aren’t the only ones they think are superfluous. There is also criticism from the business world, for example from Claudia Kemfert, energy expert at the German Institute for Economics (DIW). She is convinced that Germany doesn’t need Nord Stream 2. Instead, she calls for consistent use of renewable energies. Meister also considers the pipeline to be “the wrong signal in terms of climate, energy and power politics”. The hopes that German-Russian relations would improve with her had not been fulfilled. On the contrary: The relationship is worse than ever since the end of the Cold War – and will continue to get worse.

Nord Stream 2, on the other hand, is “very, very important” for Russia, said Meister. The main goal is to weaken Ukraine as a transit country for gas. But it is also about dividing the EU and the transatlantic partnership. “You were there before the pipeline was finished.” In addition, Germany is becoming even more dependent on Russian gas, which strengthens Russia’s negotiating position overall. In order to be on a par with Russia, Germany must reduce its dependencies.

At least as far as the gas dispute is concerned, there is a ray of hope. In the coming spring, the gas price is expected to fall again because demand will decline at the end of winter. It is therefore unlikely that the EU will suddenly conclude long-term contracts with Russia or that Germany will approve the pipeline in an urgent procedure. Rather, the governments are trying to reduce the price of gas with all sorts of aids. Hardly anyone will have to freeze – but it will be an expensive winter. And Putin should book that as a point victory.

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