The Great Gas Game

C.R. Leopold Jan 13, 2006

BOCHUM, Germany—Less than two months after being eased out of office, former Chancellor Gerhard Schroeder accepted the chairmanship of the North European Gas Pipeline – of which 51 percent is owned by the Russian gas giant Gazprom and the remainder by two German companies. Outrage has been surprisingly muted in Germany, with the deal casting a new light on Schroeder’s seven years in power.

Schroeder pushed hard for the pipeline and joined Russian President Vladimir Putin on Sept. 7 when the deal was inked – just 10 days before Germany’s elections. Estimated to cost $5.7 billion, the pipeline will connect the two countries along the Baltic seabed by bypassing pro-Western countries such as the Baltic states and Poland.

Leading German expert on corruption Jürgen Roth warns that Germany is now “vulnerable to extortion and blackmail as soon as a German government becomes dissatisfied for whatever reason with Putin’s politics or if there should occur a massive conflict of interest.”

In a move widely viewed as political revenge, Putin inaugurated the New Year by shutting down Gazprom’s flow to Ukraine. Last year, the Ukraine elected U.S.-friendly Viktor Yushchenko – whom the Kremlin views as a CIA puppet as – president. Putin turned off the gas after the Ukraine refused to pay a 400 percent price hike demanded by Gazprom. Whereas Ukraine would be paying $220 per thousand cubic meters for gas, Belarus, a notoriously corrupt and authoritarian government that remains loyal to Moscow, pays only $47. The dispute is exemplary of Putin’s strategy of using energy as a weapon.

The Russian government has a majority stake in Gazprom, which owns one-sixth of the world’s gas reserves and is the leading supplier of natural gas to Western Europe. Along with many European nations, Germany imports more than a third of its gas from Gazprom.

Schroeder’s ardently warm relationship with an increasingly authoritarian Putin also raises questions. If real power lies in controlling the sources of European energy, then Schroeder is now positioned to assist Putin in his plans to regain Russian regional dominance.

While Germans were outraged about their government’s cooperation with the United States in the rendition of terrorism suspects to secret torture prisons in Eastern Europe, they seldom talk about Russian corruption, Russian “extraordinary rendition,” Chechnya or mounting human rights abuses. The disappearance of a free press in Russia goes largely unnoted here. Russia recently passed a law giving the government control over NGOs and human rights organizations there, effectively emasculating the few organizations that have been monitoring Putin’s creeping dictatorship.

A month ago, Putin sold a ballistic missile system to Iran. According to Jane’s Defense Weekly, he is pouring munitions into Vietnam and China and opening weapons-producing factories on contract for China. Along with French President Dominique de Villepin, Putin wants the European Union’s weapons embargo on China lifted immediately. He has also been securing deals to provide more energy to China.

Look for Schroeder to try to align Germany more closely with Russia, China and Iran to form a counterweight against the U.S. and Britain as the “Great Game” continues.

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