US-German gas deal hurts Ukraine

EU energy updates

Last month, President Vladimir Putin published a sinister article, An article of 6900 words Insisting that Russians and Ukrainians are “one people,” which apparently opened the door to further Russian interference in its neighbour. Days later, the Biden administration reached an agreement With Berlin allowing the Nord Stream 2 gas pipeline to be completed – which poses a serious security and economic threat to Ukraine – in exchange for flimsy guarantees and Kiev compensation. The “deal” – in fact, just a statement – does serious damage to Ukraine.

Nord Stream has always been a geopolitical project. It would give Russia the ability to deliver nearly all of its current gas exports to Western Europe under the Baltic Sea directly to Germany, bypassing the Trans-Ukraine Transit Pipeline. This would deprive Ukraine of $2 billion annually in gas transit fees, which is vital to an economy of just $155 billion.

Russia’s Gazprom said supplies could continue through Ukraine – if European customers buy additional Russian gas (EU policy is to reduce dependence on Russia). Putin warned that Ukraine must show “goodwill” – read: do as the Kremlin asks – in order for the transit to continue. Kiev is justifiably concerned that, for Moscow, not having to rely on the Ukrainian pipeline for lucrative energy exports would remove a major constraint on further aggression.

Joe Biden in May Waiver of long-awaited US sanctions In the pipeline company, saying they don’t have any sense with the project already 90 percent complete when he became president. The deal was unveiled days after he hosted outgoing German Chancellor Angela Merkel at the White House, promising measures to limit Russian energy exports to Europe if Moscow uses energy as a weapon or commits “further aggressive actions” against Ukraine. It presented a $1 billion “green fund” to support renewable energy in Ukraine, and said Berlin would use its leverage with US backing to “facilitate an extension of up to 10 years” for Russian gas transit.

The agreement is flawed on all levels. Obligations to counter Russian misconduct are vague, the Green Energy Fund will not cover Kiev’s losses, and the offer of German assistance to extend gas transit is just a “promise to try.”

The optics are dim. Washington and Berlin’s agreement on a deal crucial to Ukraine’s interests with no one from Kiev in the room is a boon to Putin’s narrative that it is good for the big powers to decide the fate of the smaller ones. Even the timing, with the German elections in September, is strange. It would certainly make sense to deal with the next Berlin government – likely to include the Greens, who oppose Nord Stream.

So why did the White House strike a deal that also sparked bipartisan opposition in Congress? The answer appears to lie in some advisers pushing to “stop the Russia problem,” allowing the United States to focus on the main threat: China. They say Russia is a declining power whose influence, in addition to its fossil fuel reserves, stems from a virtually unusable nuclear arsenal. This argument is also flawed. Recent years have shown that Russia threatens European – and therefore global – security. keep big traditional army Ready to use.

Far from uniting democracies, as Biden has vowed, this deal has split the European Union between East and West, with Poland and neighbors such as the Baltic states deeply concerned about the fallout. More importantly, the failure to stand up to Russia’s annexation of Crimea and its assault on Ukraine’s sovereignty sets a dangerous precedent that will be noted in Beijing, which has its own territorial ambitions toward its neighbors. Responding to the Chinese threat means responding correctly to the Russian threat – not trying to get rid of it.

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