The Failure of Ostpolitik, The Potential of Europolitik

As German Foreign Minister Frank-Walter Steinmeier made a last minute, unscheduled trip to Russia this week to carry out some crisis control ahead of Friday’s EU-Russia Summit in Samara, Moscow’s relations with the West are looking quite bleak. With each passing day, the tensions are being further ratcheted up – be it a ban on Polish meats, cut offs of energy supplies to Lithuania to bankrupt a refinery desired by the Kremlin, a threat to veto Kosovo autonomy, a range of attacks on Estonia over the memorial dispute, saber-rattling over proposed missile defense sites, and a variety of energy security and pipeline politics moves which have effectively exploited the most critical divisions in Europe and shattered unity.

Russian Politics

Merkel is having trouble juggling Russia with the rest of the EU

On many political issues, Germany is frequently seen to be taking Russia’s side over that of the European Union, much to the shock and dismay of new EU members. For Moscow, the strategy has been an unparalled success. The most troubling example of Germany’s betrayal of the EU can be seen in terms of energy security, as it is their energy firms have thrown their lot in with Gazprom to build the North European Gas Pipeline (Nord Stream), it is their banks who have helped finance Russia’s aggressive resource nationalism and unlawful takeover of privately held energy assets, and whose policymakers, the heirs of Chancellor Gerhard Schroeder in the SPD, are pursuing an immensely outdated and self-destructive policy of Ostpolitik. Why doesn’t Ostpolitik work? As a largely uncritical policy toward Russia, Ostpolitik is based on a number of fundamental misconceptions. For one, many in Europe fail to grasp the integral role that energy now plays in Russian politics. Two, there is a misguided assumption that the promotion of business ties is mutually exclusive from the promotion of democratic values. And three, the potential damage and threat to security posed by the anti-competitive tactics of Russian state-owned firms is vastly underestimated. germanyrussiachart.gif As Russia’s most important economic partner in Europe, Germany is in an excellent position to positively influence Moscow. So far, however, that has not been the case. (chart FT) From my experience working on the defense team for Mikhail Khodorkovsky, I can assure you that in today’s Russia, energy is politics, and politics is energy – something that still seems to be unclear in Europe, judging by Wintershall’s most recent agreements with Gazprom. During the historic show trial which turned my client, one of Russia’s most successful businessmen, into a political prisoner and energy hostage, the attacks were conducted in incremental steps as the Kremlin discovered to what extent the West would tolerate flagrant violations of international law and outright theft of property from a publicly listed company. Largely emboldened by the active participation of German businesses and the passive approval of German government, Russia became more and more audacious in its violations of law and its shocking backslide into authoritarianism. And now, a year and a half since my forced expulsion from Russia for my outspoken defense of my client, I am seeing the history being repeated. The quasi-legal extortion of Royal Dutch Shell and BP and Gazprom’s politically motivated supply cut offs to the former satellites cannot be divorced from Wintershall, E.ON Ruhrgas, and Dresdner Kleinwort’s enthusiastic and uncritical embrace of Russia. Likewise, as these entities underwrite the return to authoritarianism under the rubric of Ostpolitik, the blood spilt from the murders of courageous journalists and the street beatings of marching dissidents by riot police lands on the hands of German energy consumers. Russia alone cannot be blamed for the direction it is taking – her silent partners are also responsible. We are all familiar with the shameful opportunism of Chancellor Schroeder, who exploited his position in office to push for the Nord Stream project which he would later personally profit from. This proposed project is a classic example of Ostpolitik logic – like the Molotov-Ribbentrop Pact Part II, Schroeder and Vladimir Putin shrewdly divided Europe into so-called spheres of influence, casting aside its obligations of security and solidarity with EU countries in favor bilateral priorities. This painful betrayal of new member’s hard-earned sovereignty from Soviet occupation is extremely detrimental in building consensus for a common Union policy on Russia. Many German firms profiting from the fracture of European energy security defend their Russian partners, and argue that their decisions are made on a purely commercial basis. Yet this is contradicted time and time again by the aggressively monopolistic behavior of Russia in the energy trade, which refuses to ratify the Energy Charter, refuses to liberalize its monopoly on the pipeline infrastructure, and has arguably violated EU competition law Article 82 EC for its abusive refusal to supply and discriminatory treatment of customers for political motives. In a recent opinion article, Ukrainian politician Yulia Tymoshenko has even argued that the EU must address Gazprom in the same way it has addressed Microsoft as a monopolistic entity. The most important thing to recognize is that Russia is benefiting enormously from the split it is creating in Europe, and that Germany is the key country capable of mending this rift and leading a successful European engagement of Russia. The good news is that Germany continues to enjoy a significant reservoir of goodwill in Moscow, and stands a better chance than anyone else to help bring about progress in the EU-Russia relationship, and institutionalize energy relations in a fair and equitable rule-based system. To do this, Germany must bury Ostpolitik with Willy Brandt, and come up with a Europolitik that puts the collective interests of the Union first. The longstanding injustices suffered by Mikhail Khodorkovsky serve as a powerful cautionary tale of what can happen to an energy hostage of the Russian state, but with the creation of the proper incentives and a successful Europolitik, Germany can help lead the way for the return of a responsible partnership, a competitive market, and real rule of law that would make show trials a relic of the Soviet past – as they should be.