One problem with trying to craft a coherent sanctions regime against Vladimir Putin’s Russia is that every country’s energy needs are different, and as such, some nations are in the unenviable position of having to choose between funding Putin’s war or freezing to death.
That’s not an exaggeration. Or maybe it is. Ambiguity around that point is inhibiting the West’s capacity to respond effectively to Russian aggression.
When Russian tanks rumbled into Ukraine earlier this year, I assumed Germany, and other European nations dependent on energy from Moscow, understood both the necessity of cutting the proverbial cord and the consequences of doing so. As it turns out, they understood the first part, but not the second.
Now, several months into the war, we’re witnessing an absurd manifestation of Western privilege. Europe believes it’s entitled to Russian gas (because what kind of monster lets Europeans freeze?) but not obligated to pay for it (because who pays a monster for gas?).
I’d say I’m no Kremlin apologist, but that’d be to materially understate the case. I’m squarely biased against the Kremlin, where “squarely” actually means vehemently. Unlike… well, unlike every, single other media outlet on the planet, I make absolutely no secret of my biases, political or otherwise. What you see (and read) here is precisely what you get.
That said, I’d be remiss not to call this what it is: A charade, mostly on Europe’s part. Europe and Putin are engaged in a coordinated decoupling. Europe is buying gas from a war-time belligerent (it can do without other kinds of Russian energy, but not all gas, immediately) and Putin is selling gas to a war-time belligerent (he can do without some revenue from Western buyers, but he’d rather not do without all of it, and besides, there’s no real downside to taking Europe’s money up to and until direct military confrontation with NATO makes engineering an economic collapse in Germany a strategic imperative).
You can hardly blame Ukraine for being aggrieved. Europe is funding both sides of the war. Kyiv gets weapons and money, but Moscow gets money too. It’s not that Ukraine doesn’t understand why Germany and Italy don’t want to stop buying all Russian gas. It’s that Kyiv thinks they should just bite the figurative bullet and do it anyway, because that might stop Ukrainians from having to bite literal bullets.
The US and Canada are in a much less demanding situation. An ocean removed, and sitting on oceans of their own energy, Americans and Canadians don’t have to fret much over this. Joe Biden presents the Ukraine conflict as an existential struggle, and it is, but not to America, and not to Canada either. Treaty obligations aside, there’s nothing that actually obligates anyone to do anything. Yes, America would probably “defend every inch of NATO soil” (as Biden is fond of putting it), but it almost surely won’t come to that. The (far) more likely outcome is that Ukraine becomes a perpetual proxy war where the east is gradually annexed by Putin and the US and Europe keep sending weapons to Kyiv to defend the west.
All of the above was neatly encapsulated by a dispute over a natural-gas turbine that ended up stranded in Montreal after repairs. Sanctions on Russia’s oil and gas industry prevented the part from making its way back to Germany, where it’s needed for the Nord Stream pipeline, which is undergoing scheduled maintenance this month.
Moscow cited that turbine in curbing flows to Europe, and there were palpable concerns that if Canada refused to return the part posthaste, the Kremlin would use it as an excuse not to restart the conduit following this month’s maintenance. German Economy Minister Robert Habeck has repeatedly warned that flows may cease entirely following work on the pipeline, a situation which would plunge the world’s fourth-largest economy into a deep recession virtually overnight.
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Over the weekend, Canada finally agreed to return the turbine, to the chagrin of Ukraine and Canada’s sizable diaspora. In issuing a limited export permit, Natural Resources Minister Jonathan Wilkinson acknowledged the plight of Canada’s “European friends and allies.”
“Absent a necessary supply of natural gas, the German economy will suffer very significant hardship and Germans themselves will be at risk of being unable to heat their homes as winter approaches,” Wilkinson said.
Here again, I’m compelled to suggest that Western nations simply aren’t prepared to sacrifice much in the interest of any greater good. It’s possible that breaking Putin will require Germans to be very cold this winter, just like it’s possible that breaking inflation might require Americans to stop driving and buying things they don’t need for a while.
This is everywhere and always presented as a binary choice between, on one hand, necessary demand destruction that results in poverty and widespread human suffering, and, on the other, counterproductive government intervention that forestalls said demand destruction, thus perpetuating war and inflation.
That’s a cartoonish mischaracterization. There’s a middle ground wherein rich nations take common sense steps to shield the most vulnerable households from unacceptably dour economic outcomes, while compelling everyone else to make sacrifices in consideration of the circumstances. The idea, for example, that Germany, a country which, until very recently, was paid by investors to borrow, must now choose between perpetuating a bloody war not so distant from its own borders and allowing a non-trivial percentage of its people to starve and freeze is manifestly absurd.
As ever, the issue is that vexing problems require carefully-crafted policy solutions by competent politicians. In Western democracies, competent politicians are an endangered species.
On Monday, the State Department said the US supports Canada’s decision to ship the gas turbine back to Germany. In the short-term, the turbine will allow Germany and other European countries to replenish their gas reserves, “increasing their security and resiliency and countering Russia’s efforts to weaponize energy,” the US explained.
Got that? Canada’s decision to exempt a natural-gas turbine from a sanctions regime targeting Russia will make Europe safer from Russia by ensuring Germany can receive plenty of Russian gas.
With all due respect to the US State Department, I doubt the veracity of that assessment.
Also on Monday, Gazprom announced further cuts to gas supplies to Italy.
Had been wondering why Germany couldn’t just bite the figurative bullet. You’ve explained it.
“There’s a middle ground wherein rich nations take common sense steps to shield the most vulnerable households from unacceptably dour economic outcomes, while compelling everyone else to make sacrifices in consideration of the circumstances.”
“As ever, the issue is that vexing problems require carefully-crafted policy solutions by competent politicians. In Western democracies, competent politicians are an endangered species.”
It’s heartbreaking, infuriating, to in effect be bystanders to the blatant, vicious rape of a nation.
Putin is a delusional psychopath who believes his own lies and frequently bluffs about using nuclear weapons. Like many Americans, I hope and believe that Ukraine will eventually gain the advantage on the battlefield with the ongoing assistance of the West.
But to your point, Walt, “it’s possible that breaking Putin will require Germans to be very cold this winter, just like it’s possible that breaking inflation might require Americans to stop driving and buying things they don’t need for a while.” We in the West are not a little bit self-centered, and our everyday expectations are high. The pandemic gave the US and the West a taste of random hardship, and, in reality, it’s not over yet. The pandemic was not a broadly familiar experience, but wars and plagues and other pandemics have marked human history. We continue to respond to the pandemic. A jolt of reality is not a bad thing for kickstarting thought and solving problems, or challenges from a maniacal presence in Eurasia.
I don’t believe the Germans will be cold this winter, even if Putin cuts off their gas completely. If the Germans want fuel, there are other providers, one of which is on the sidelines – Iran – which might be worth talking to. The Iranians have a lot of supply. Bringing it on the market would be most useful.
If Ukraine succeeds in controlling and dominating the battlefield with help from the West, the day that Putin will play the nuclear card may come because he lacks the conventional war-making and economic capacity to carry on. But doing so will not be a mere expression of an idea about how to “win” the war, which he and his country have already lost. If we are really lucky, the Russians will remove Putin for the simple reason that he’s destroying the well-being of his country. But if our “luck” evolves to a more complex outcome, the Ukrainians and the West may have to negotiate with Putin to end the war as he dangles the nuclear option over the world he so wishes to dominate.
Europe believes it’s entitled to Russian gas (because what kind of monster lets Europeans freeze?) but not obligated to pay for it (because who pays a monster for gas?).
This is the reason that, for medical journalism, I choose New England Journal of Medicine only, and for the financial part, I only rely on heisenberreport.com
Accept no substitutes.
When we see how Western citizens dealt with Covid and now deal with high gas prices, and how resurgent populism is, it is really not surprising that governments are threading waters. France came close to getting a pro-Russian president. How close will it get for Germany? It’s easy to say people should sacrifice a lot now but it’s simply not how democracies work
The key question, to me, is what can Russia do with money from energy sales to Europe?
If Russia cannot use those funds to procure the technology and services necessary to build weapons, fly aircraft, produce oil, run networks, service bonds, buy key Western products, etc then how much good do those funds do for Putin?
Simply accumulating euros that can’t be exchanged for needed goods is of limited use. Russia accumulated lots of USD and EUR before the invasion, and that didn’t help it so much.
The West is not going to be able to literally starve the Russian population. Russia is pretty self sufficient in basic food commodities.
Sanctions can degrade, hollow out, and isolate Russia’s economy, over time. As long as that is being achieved, as well as it can be, then what is the advantage to Europe volunteering to suffer a severe, unnecessary pain and potentially erosion of Western cohesion? Just for appearances’ sake?
This debate may be moot soon. Putin should and likely will cut Europe off from gas, whether Europe is willing to buy it or not.
Europe must get their nuclear reactors up and running to provide an alternative to Russian gas. It won’t happen overnight and it may be painful in the interim. But what choice do they have.
H-Man, this is truly a game of chicken on an international level. Will Germany buckle or bite the bullet? Germans increased production during WWII when every day their cities were leveled by Allied bombings. So methinks they will bite this bullet no matter how harsh the consequences, it seems to be in the genes.
These few crazy years will go into the history books for a hundred years of study (high schoolers groan everywhere). Global Pandemic!
Invasion, but repelled by a much smaller country using technology and pride; NATO and the EU expanded!
WW2 proved total war, destroying the opponent’s production capacity and ultimately their will to fight, is the real strategy in any war. So for all of the tactics and logistics inside of the Ukraine theater there’s a much larger chess board: are the US and Europe willing to sacrifice, compromise, and pay for a winning strategy?
(Taiwan, South Korea, Japan, etc are watching closely)