Streetwise Professor

December 23, 2019

At the Russians’ Feet and Trump’s Throat: Germany’s Nordstream 2 Hypocrisy

Filed under: China,Energy,Politics,Russia — cpirrong @ 1:46 pm

Last week, Trump signed into law a bill authorizing sanctions against any company involved with the construction of the Nordstream 2 gas pipeline. Almost immediately thereafter, Ted Cruz sent a letter to Swiss company Allseas, which is laying pipe, stating that they were at risk of sanctions unless they ceased these operations. Almost immediately after that, Allseas announced that it was suspending work.

And almost immediately after that, Angela Merkel lost her shit:

“We are against extraterritorial sanctions, and not just since this decision yesterday — we also have this problem with a view to Iran,” Merkel told German lawmakers, referring to the Trump administration’s withdrawal from a deal between world powers and Iran meant to curb concerns over Tehran’s nuclear program and the imposition of new sanctions.

“I see no alternative to conducting talks, though very firm talks, (to show that) we do not approve of this practice,” Merkel said during a regular question-and-answer session in parliament. “We will see how things go with Nord Stream.”

You want talks, Angie baby? Talk to the hand.

I liked the part about Iran especially. Maybe she’s miffed because the secondary sanctions make it harder for Germany to help Iran finish the job the Germans started.

There has been a lot of bleating about how this American policy is intended to advance American economic interests, specifically US natural gas producers and LNG exporters. Maybe so, but any such criticism from Germany is an extreme case of projection, given its obsession with promoting German exports, including at the expense of the Greeks, etc.

There has also been a lot of bleating about how this is an attack on an American ally, and Nato. Well, as I’ve written ad nauseum, Germany is a pretty horrible ally of the US, and has been the biggest deadbeat in Nato for years. It spends chump change on defense, and as a result has an air force with few operational aircraft, a navy with few operational ships (and at times no operational submarines), and an army that trains with broomsticks.

Indeed, it is Germany’s persistent failure to pull its weight–hell, to pull Belgium’s weight–in Nato that no doubt makes Trump relish sticking it to them.

Payback is a bitch, Angela.

Further, the bleating about this being an attack on Europe, and Nato, is a particularly bad joke, given that large swathes of Europe and Nato detest Nordstream 2, and view it as Germany selling them out to the Russians. Poland is particularly outspoken on the issue:

“Despite the involvement in the Nord Stream 2 project of companies from some EU countries, this pipeline has never been a European or EU project,” said Polish Deputy Foreign Minister Pawel Jablonski, quoted by the PAP news agency.

“Instead, it remains an instrument for the realisation of Russian economic and, potentially, military policy.”

And it also undercuts Ukraine. You know, the country that Trump allegedly screwed for political gain, and for which Merkel constantly sheds crocodile tears.

That is, the Germans are even more two-faced than usual when it comes to alliances. Their idea of an ideal ally is someone who does what they want and lets them do what they want. Everyone else is an enemy.

The Russian (and Ukrainian) aspect of the story requires Merkel and other Trump critics to give Fitzgeraldian demonstrations of first-rate intelligence, i.e., holding two opposing thoughts in mind while retaining the ability to functoin These people tell us that Trump is in Putin’s thrall. But rather than acknowledging that he has implemented an avowedly anti-Russian policy (and the US has constantly harped on this aspect of Nordstream 2) by sanctioning the pipeline, the Germans and other euroweenies pivot to criticizing Trump for daring to trample on their sovereignty and harming European businesses.

As Churchill said, the hun is either at your feet or at your throat. Here, Germany is at the Russians’ feet, and at Trump’s throat–for having the audacity for going for a Russian economic jugular.

And they are singularly clueless in their failure to recognize that this duplicity is exactly why Trump DGAF about their objections to his policy.

It’s interesting to note that this dispute echoes one of the few serious disagreements between Thatcher and Reagan. In 1982, the Reagan administration was adamantly opposed to the construction of pipelines to export gas from Siberia to western Europe. (Ironically, these pipes are now the ones that are the source of chronic friction between Ukraine and Russia.) Despite her stalwart anti-Soviet policies, Margaret Thatcher supported the pipeline, on purely economic grounds: a UK firm located in economically depressed Scotland was a supplier to the pipeline, and almost two thousand jobs would be lost if they pulled out.

Reagan disagreed on broader geopolitical grounds. But back then, secondary sanctions were not an arrow in the American quiver–and Reagan probably would have shrunk from imposing them on the US’s closest ally. So the pipeline went forward.

Though not without Reagan getting a measure of revenge. The Soviets wanted US software to operate the pipeline, and of course they couldn’t obtain it through legitimate channels. So they tried to steal it, like they had stolen a lot of US technology before. The Reagan CIA was onto this, however, so they allowed the Soviets to steal software that turned out to be a Trojan horse. After a few months of operation, the Trojan kicked in, and completely disrupted the operation of the pipeline–and indeed caused an explosion on the pipeline in Siberia. The explosion was so large it could be seen from space, in what was supposedly the largest non-nuclear human-caused explosion ever.

Now I doubt that Trump would give a go-ahead to blow up Nordstream 2, given that the catastrophe would be in the Baltic, rather than the Siberian wastes.

But I am sure that there are days when he is tempted, given Merkel’s hypocrisy.

Which brings a thought to mind. Another source of bitter contention between the US and Germany is Huawei, which Merkel stubbornly insists on allowing to participate in Germany’s 5G rollout despite the extreme security risks that it poses. If Germany indeed flouts the US’s objections, and there is a subsequent failure in the German 5G system, it would be quite reasonable to collude that this wasn’t an accident, comrade.

Remember, Angela. You reap what you sow.

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  1. “obsession with promoting German exports”, which reminded me of this peculiar event:

    Did Angela similarly protest the extraterritoriality back in the day, or is this a recent phenomenon?

    Also, the shellings of the Donbas and Israel by the blood-thirsty regimes Angela is so eager to finance look pretty extraterritorial to me. Were those regimes only shelling Berlin, that would be an internal affair where I could agree with Angela that the Americans should not intervene.

    Comment by Ivan — December 23, 2019 @ 5:48 pm

  2. Every day and in every way Konrad Adenauer’s description of his fellow Germans rings truer and truer: Belgians with megalomania .

    Comment by Sotos — December 23, 2019 @ 6:34 pm

  3. Merry Christmas everybody and Prof thanks for writing!

    Comment by Joe Walker — December 23, 2019 @ 8:12 pm

  4. Merry Christmas to all.

    Comment by Christopher L Hunt — December 23, 2019 @ 9:01 pm

  5. @Joe-Thanks. Glad you enjoy it. Have a Merry Christmas & a happy New Year.

    Comment by cpirrong — December 23, 2019 @ 9:57 pm

  6. @Ivan–Interesting, though Daimler is a piker compared to Siemens when it comes to bribery and corruption. Siemens spent $1.4 billion on bribes in emerging markets. And they paid a $1.6 billion fine to the US. And that was just one of Siemens’ corruption scandals.

    The Germans (and other Europeans, e.g., the French re the massive $9 billion fine on Paribas) don’t like the Americans cracking down on their racket, but the optics of making too big a deal about that sort of extraterritoriality stink. “How dare you prosecute our crooks” isn’t a good look.

    Comment by cpirrong — December 23, 2019 @ 10:07 pm

  7. It is so refreshing to see the U.S. defending its interests instead of caving to every half-wit whiner out there.

    Comment by Howard Roark — December 23, 2019 @ 10:14 pm

  8. “Maybe so”

    Fantastic! You should write for SNL, Craig. You definitely ended the year on a high note.

    Comment by David Mercer — December 24, 2019 @ 2:28 am

  9. As much as I love and respect your takes on many things, the overall hate on Nordstream 1 & 2 and Russian/Soviet gas has been one of the stupidest themes I have seen in my nearly 40 year career in Nat Gas.

    The fear and loathing started under Carter, metastasized under Reagan. Starting with the first Yamal line, then with NordStream 1.
    There has been virtually little evidence that (West &) German and Western European countries have been held in any sort of hostage to Russian/Soviet supplies. Many of the issues regarding in Ukraine (which had some degrees of impact a few times) amount to a large scale Right of Way dispute. Yes, the Baltic countries were cut off, but quickly added LNG receipt capabilities. (go back to 1980 and try to tell someone the Baltic States would become independent again, Ukraine independent, Germany reunited…)

    One can make a much larger argument that Russia/Soviets have been far more reliable suppliers than OPEC, and even with Nat Gas North Africa (Libya, Algeria, et al all have pipelines under the Mediterranean to southern Europe). From an oil perspective, we’ve had far more disruptions from many of these countries.

    And then let us discuss the US involvement in oil and oil exporting countries in the Middle East, Persian Gulf in particular, North Africa, Americas… Basically an excuse for spending incredible sums of money and unfortunately a loss of lives, limbs and brains not to mention treasure. What did all of that buy us?

    I recall that (Houston) software company that was part of the dispute. We did business with them when you were hanging out at the MERC; their offices were in what is now called the Energy Corridor just off of the west Sam (8). I think they may have actually legally sold their product to Soviets at the end of the day. It was a big part of their presentation of their capabilities. They seemed quite surprised when we told them we allowed our compressor stations more autonomy. Of course we had a somewhat unique pipeline operation.

    Basically, Sir Winston had the whole point of energy supplies correct from over a century ago. Diversity of supply is the primary protection. Having LNG import terminals and massive storage capabilities go a long way toward mitigating (while obviously not eliminating) risks.

    Comment by JavelinaTex — December 27, 2019 @ 6:37 am

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