Wednesday, July 17, 2024
 
 

EU’s Cold War With Russia Worries German Business

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RHODES, Greece – German business, including some major energy companies, are frustrated that “the political war” between EU and Russia has become an “economic war that we’re going to lose,” a German source in Berlin with knowledge of the issue, told New Europe.

Relations between Russia and Germany are at their lowest for 40 years which worries German companies, the source said, criticising German Chancellor Angela Merkel for succumbing to pressure from the United States and East European states, turning a political crisis to an economic one.

The German source also noted that due to the outgoing European Commission’s actions, the Nord Stream pipeline carrying Russian gas to Germany is not operating at its full capacity because pipelines, which connect the Nord Stream pipe with other European countries, do not have third-party access exemption.

Brussels has also now suspended the approval process for the South Stream gas pipeline and is pressuring member states to cease pipeline construction. Russian gas monopoly Gazprom is spearheading the project which will bypass Ukraine.

Even with the EU suspension of the South Stream project, Italy, Austria, Croatia, and Germany continue to favour this pipeline. Austria recently approved the construction of the South Stream within its borders. Besides Gazprom, the key players in this project are Italy’s ENI, Germany’s Wintershall, France’s EDF, and Austria’s OMV.

Former Secretary General of the Council of Europe Walter Schwimmer ruled out the possibility of a new gas war. The Austrian politician told New Europe on September 26 that first of all, Russia knows “it needs friends in Europe”.

Secondly, Russia’s troubled economy is heavily dependent on oil and gas exports, Schwimmer said, speaking on the sidelines of the forum “Dialogue of Civilizations”. “Starting a gas war would damage Russian economy much more,” he said, adding that “Austrian providers guaranteed to the public that they can come over the winter at anytime. In any way, I still hope this spiral situation will stop”.

The EU is looking to diversify its oil and gas resources away from Russia. But Schwimmer said Europe will never be independent from outside energy resources. He noted that Europe is developing alternative energy – wind, solar, geothermic – to battle climate change. “But regarding oil and gas, we will always depend – if it is not Russia, it is northern Africa, it is Middle East and these are not the safest sources,” he said.

At the same forum, Matthias Platzeck, former Social Democratic Party leader and German-Russian Forum chairman, told New Europe on September 26 that he hopes the European Commission will help improve EU-Russia ties.

He reminded that his countryman, EU Energy Commissioner Günther Oettinger, “is at this moment negotiating in Berlin with Ukraine and Russia energy ministers”.

Russian, Ukrainian and European officials met in Berlin in an effort to avert a gas crisis for the upcoming winter. Oettinger reportedly proposed a deal that would see Ukraine repay some of its gas debt to Russia in exchange for guaranteed gas deliveries over the harsh winter months.

Schwimmer told New Europe that it is understandable that Russia has no reason to give a large discount to Ukraine. But if Russia’s Gazprom does not supply Kiev with gas “Ukrainian people will freeze in the coming winter and Russia will be blamed for it”.

Follow on twitter @energyinsider

Previously on Energy Insider:

Serbia Says Bets Off For South Stream

Lifting US Oil Export Ban to Hurt Putin

Former US Senators Lobby For Gazprom

 

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Co-founder / Director of Energy & Climate Policy and Security at NE Global Media

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