RUSSIA: In a Quick New Embrace with Germany

By Kester Kenn Klomegah Reprint | | Print |

Kester Kenn Klomegah

MOSCOW, Mar 12 2008 (IPS) - In his first week as president-elect, Dmitry Medvedev has sought to build new bridges with German Chancellor Angela Merkel. The reinforced relations rest on the pillar of a major energy deal.

Medvedev met with Merkel in Moscow Mar. 8. This was Medvedev’s first meeting with a foreign head of government.

Russia and Germany have moved to increased economic cooperation. Germany is looking to move from pre-eminently commercial relations to scientific and technological cooperation, as well as production and investment cooperation in energy supply, aviation and telecommunications.

According to the Russian Trade and Economic Development Ministry, trade with Germany hit a record 52.8 billion dollars in 2007. German investment in Russia increased 70 percent in 2007 over the previous year to 3.4 billion dollars.

Among the priority projects is construction of the European gas transportation system Nord Stream. The project is for a pipeline under the Baltic Sea to pump Russian natural gas to Germany. The project is being developed by Russia’s state-controlled gas giant Gazprom and Germany’s E.ON and BASF at an estimated cost of 12 billion dollars.

“As expected, Germany has emerged as the best European Union (EU) partner for Russia, simply because Germany looks for constructive ways of tapping the economic potential rather than criticising Russia’s democracy,” Nikolay Kashnikov, senior research fellow at the Moscow based Institute of Europe told IPS.

Kasknikov said many EU members pursue different policies that have made it difficult for Russia to implement projects with the EU, but Germany regards the pipeline project as important for Europe’s energy security.

Work on the first line is due to begin in the summer of 2009, with completion scheduled for 2010. The first gas deliveries are expected in the spring of 2011.

The three Baltic republics (Estonia, Latvia and Lithuania) have voiced concern over the pipeline project, and called for a detailed study of its environmental consequences. But these objections are not expected to delay the project.

“We expect this project to be implemented within the agreed timeframe,” a Gazprom spokesman told Vesti television channel in Moscow. “We are coordinating all environmental issues with the countries involved in the discussion – Finland, Sweden, Denmark and Germany. So far, we see no grounds for reviewing our earlier announced plans to launch gas transportation via the pipeline.”

Some experts believe the Russian-German project could alter the geopolitical situation in Europe.

“It is a real breakthrough for Russia both in energy and political terms,” says Igor Tomberg, a leading research fellow at the Economics Institute of the Russian Academy of Sciences.

“The project is feasible and offers Russia not only financial, but also geo-economic advantages in increasing its energy presence in Europe. The agreement is clearly beneficial for Russia because a stable supply of energy to Europe in the next few decades would depend on Germany’s bilateral relations with Russia.”

The agreement is also to Germany’s advantage because German companies will gain access to Russian gas fields supplying the line, says Tomberg.

Mikhail Kamynin, spokesman for the Foreign Ministry told Russian local media ahead of Merkel’s visit that relations between the two countries are addressing a wide range of international issues.

He spoke of the situation in the Balkans, Iran’s nuclear programme, a Middle East settlement, the situation in Lebanon, Iraq and Afghanistan, as well as arms control and the non-proliferation of weapons of mass destruction.