Putin’s visit to Merkel makes the US nervous

This article is co-written by Ahmed Ashfaque Shahbaz and Khalid Ibn Muneer.

President of the Russian Federation Vladimir Putin has made an official state visit to Germany to meet his counterpart Chancellor Angela Merkel in August. The primary objective of the visit was to discuss bilateral issues between Russia and Germany focusing on the Nord Stream 2 pipelines. This came in an interesting time, as the Americans have been distancing itself from Germany a key ally in Europe. The current American administration has attempted to isolate Russia from Europe as a large amount of its natural gas exports end up in Europe primarily in Germany. One of the prime reasons for the USA to attempt the Germans to distance from the Russians is an American interest to export the LPG (Liquefied Petroleum Gas) into Europe. However, natural gas is far less expensive than LPG. Hence, the Germans would prefer to buy natural gas from Russia. Furthermore, the neighbouring European countries like the UK, Poland and some of the Baltic States prefer an American influence over a growing Russian one.

Germany and Russia previously built the Nord Stream pipelines through the Baltic Sea in order to bypass the old Soviet-era transit of resources into Germany. The Nord Stream pipelines were a joint project by the Russians and the Germans. This was quite successful and the Germans and the Russians have immediately started the talks for Nord Stream 2 pipelines. As a result, this meeting was organised by Chancellor Merkel in order to finalise the Nord Stream 2 pipelines. This is unpleasing for the USA as Russia is seemingly getting closer with the most important EU nation Germany. Furthermore, this solidifies Russia’s position in Europe as a major resource supplier.

Germany previously agreed with Russia along with all the member states in the JCPOA apart from the USA under the current administration which recently pulled away from the agreement. This was done primarily by the previous US administration along with its European partners and major world players such as China and Russia. This brought on an agreement with Iran regarding its nuclear program and this was widely known as the Iran Deal. However, quite surprisingly the US backing out of this deal made Germany and Russia collectively denounce the radical move from the US.

Moreover, Germany did not quite criticise the Russian involvement in Syria in order to fight the threats of Daesh and other terrorist factions. This was a major indication that Germany is more likely to pursue its self-interests over Americas in Europe and the Middle East. Although, historically Germany has been one of the closest allies of the US, however, due to its own economic interests Germany is opting to play a middle ground in this divergence between Russia and the US giving priority to its own interests.

The economic sanctions imposed on Russia by EU and USA has hurt Germany the most. Renowned German politician Sahra Wagenknecht said earlier that the waves of political and commercial restrictions against Russia have primarily harmed the European economy, has not resolved any of the important international issues. Germany accounts for almost 40% of lost trade in the West, far more than the UK, France and the United States. According to available data, the total cost of the Russia sanctions imposed in 2014 was 97 billion euros in 2015.

The export loss of the sanctioning western countries amounted to 44 billion dollars (37.5 billion euros), of which 90% fell to the EU countries. Rising loses in businesses, which are directly linked with business with Russia has fueled resentment among the German business community, who are calling on the German government to reverse the situation.

The prevailing situation has given the right-wing German political parties, notably the AfD chance to gain the floor for reverting trade restrictions imposed on Russia. The chance to speak on such pressing issue will allow the hardliner political parties to take up the floor for other issues, thus weakening the position of the European liberal political parties, not just in Germany, but across the developed Western Europe, who are also at the same time getting hard pressed economically due to sanctions on Russia.

In the face of the rising demand to address the sanction issue on Russia, which is causing business to get difficult across the EU and the swift emergence of right-wing political parties on the back of the sanction issue, German government has showed intentions to walk away from authoritarian US decision making process on important aspects regarding international trade and security. The recent outburst of US President Donald Trump during the NATO summit has no doubt enraged German government further.

At this moment, the energy security of Germany and the EU as a whole largely depends on Russia, given the volatile situation in the Middle East has made the energy supply prospects from the Middle East in to jeopardy, which got complicated further due to the US walking away from JCPOA deal and the reimposition of sanctions on Iran and the US-Turkey crisis. Other options like the US directly exporting LPG to Europe will not be economically suitable for the EU, as it will mean greater cost incurred on Europe’s behalf, which will also mean that the chance of uninterruptible energy supply to Europe lessened.

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