Macron’s Idealistic Russia Pragmatism

Vladimir Putin Emmanuel Macron
Presidents Vladimir Putin of Russia and Emmanuel Macron of France meet outside the Palace of Versailles, May 29, 2017 (Elysée)

The 2020 Munich Security Conference saw French president Emmanuel Macron reaffirm his eagerness to turn Russia into a security partner, suggesting that “we have to restart a strategic dialogue.”

But Russia hasn’t been a part of Europe for a while and doesn’t belong in a conversation about European autonomy. The only thing that ties it to Europe is geography. Read more “Macron’s Idealistic Russia Pragmatism”

In Minsk, Pompeo Is All Talk

Mike Pompeo Alexander Lukashenko
American secretary of state Mike Pompeo meets with President Alexander Lukashenko and other Belarusian officials in Minsk, February 1 (State Department/Ron Przysucha)

Tensions between Belarus and Russia prompted American secretary of state Mike Pompeo to pay Alexander Lukashenko a visit this weekend. He told the Belarusian leader that the United States could fulfill all of his country’s oil needs if he wants to become “independent” from Russia.

This shouldn’t be taken seriously. Besides the hypocrisy — how “independent” would Belarus be if it traded its dependence on Russia for a dependence on the United States? — it would be logistically and financially almost impossible for America to meet the complete oil needs of Russia’s closest ally.

Pompeo’s remarks do suggest America is willing to help Belarus from being absorbed by Russia. But how much can it really do? Read more “In Minsk, Pompeo Is All Talk”

Who Is Russia’s New Prime Minister?

Mikhail Mishustin
Mikhail Mishustin, then director of Russia’s Federal Tax Service, meets with President Vladimir Putin in Sochi, November 20, 2018 (Kremlin)

Mikhail Mishustin was largely unknown both in- and outside Russia until two weeks ago. The head of the Federal Tax Service since 2010, he was unexpectedly promoted to prime minister, replacing Vladimir Putin’s longtime deputy, Dmitri Medvedev.

Yet it was probably because, not in spite of, this political inexperience that Mishustin was chosen. Read more “Who Is Russia’s New Prime Minister?”

Germany Invests in Rail, But Is It Enough?

Cologne Germany train station
Central train station in Cologne, Germany (Unsplash/Kai Pilger)

Germany is investing €86 billion over the next ten years in its aging rail network. The hope is to shift Germans toward less carbon-intensive forms of travel.

The federal government will cover the bulk of the cost, €62 billion. Deutsche Bahn, the state-owned railway company, will pay the remaining €24 billion. The money will be used to update tracks, stations, signal boxes and energy supply systems.

The government also intends to cut fares by 10 percent for trips of 50 kilometers or more in order to incentivize the use of trains for long-distance travel.

With this package, Germany kills two birds with one stone: it modernizes its infrastructure while reducing carbon emissions.

It also demonstrates Germany’s willingness to spend. Read more “Germany Invests in Rail, But Is It Enough?”

Russian-Ukrainian Gas Deal is a Trilateral Victory

Vladimir Putin Emmanuel Macron Angela Merkel Volodymyr Zelensky
Vladimir Putin, Emmanuel Macron, Angela Merkel and Volodymyr Zelensky, the leaders of Russia, France, Germany and Ukraine, attend a summit in Paris, December 9, 2019 (Bundesregierung)

Russia and Ukraine have agreed to secure the flow of natural gas into Europe for the next five years. A deal between the two countries satisfies the economic needs of all three parties involved. Russia guarantees the export of its gas, Ukraine continues to benefit financially from transiting the gas, and the EU receives a steady supply of gas for the immediate future.

Gazprom, the Russian gas monopoly, will pipe 65 billion cubic metres of gas into Europe in 2020. The amount will fall to 40 billion over the next four years. The agreement mentions the possibility of extending the contract by another ten years upon maturity.

Ukraine will receive up to $7 billion in transit fees, which would be around 5 percent of its national budget.

An agreement has not (yet) been reached on direct gas supplies to Ukraine. For the time being, it only stands to benefit financially.

Naftogaz, the Ukrainian gas company, will also receive $2.9 billion from Gazprom in overdue transit payments following an arbitration court ruling in Sweden. In return, Ukraine has agreed to drop $12.2 billion in additional legal claims. Read more “Russian-Ukrainian Gas Deal is a Trilateral Victory”

Germany’s Surplus Obsession Hurts the Eurozone

Angela Merkel
German chancellor Angela Merkel attends the G7 summit in Biarritz, France, August 25, 2019 (Bundesregierung)

If the German economy does poorly, so will the eurozone’s. A mere .2 percent growth is projected for the first quarter of 2020. This should be a wakeup call to German policymakers.

There are the usual suspects: underdeveloped infrastructure, underinvestment in education, export dependency.

They all stem from Germany’s obsession with surpluses. Revenues generated by exports are not reinjected into the economy. Rather, they sit comfortably in savings accounts. This is the reason for negative interest rates.

Not spending money is one way to get rich. But to grow its economy, or prevent a slowdown, Germany must put its money to work: invest in education, infrastructure and public goods.

Its reluctance to do so affects everyone in the euro area. Germany accounts for nearly 30 percent of the eurozone’s GDP. If Germany spent more at home, it would reduce its current account surplus and increase demand for the products and services of other European nations. Read more “Germany’s Surplus Obsession Hurts the Eurozone”

Nord Stream Sanctions Are No Way to Treat European Allies

American president Donald Trump speaks with German chancellor Angela Merkel at the G20 summit in Hamburg, July 6, 2017
American president Donald Trump speaks with German chancellor Angela Merkel at the G20 summit in Hamburg, July 6, 2017 (Bundesregierung)

Senators in the United States have approved sanctions against companies that are involved in building the Nord Stream 2 pipeline between Russia and Germany.

The sanctions, which President Donald Trump has yet to sign into law, are a last-ditch attempt to halt the pipeline’s construction, which the Americans argue will only increase Europe’s dependence on Russian gas and hurt Ukraine’s position as a transit nation.

They’re not wrong, but placing sanctions on allies is no way to go about it, especially when they have no alternative. Read more “Nord Stream Sanctions Are No Way to Treat European Allies”

The Trans-Anatolian Pipeline, Explained

Welded pipes of the Trans-Adriatic Pipeline are lowered in northern Greece, November 2016
Welded pipes of the Trans-Adriatic Pipeline are lowered in northern Greece, November 2016 (TAP)

After four years of construction, the Trans-Anatolian Natural Gas Pipeline (TANAP) has started pumping gas into Europe.

TANAP is part of Europe’s Southern Gas Corridor, connecting the South Caucasus Pipeline (completed) with the Trans-Adriatic Pipeline (still under construction). It aims to transport natural gas from Azerbaijan all the way through to Italy, where it flows into the European market.

Once the system is fully operational, it should be able to pipe 16 billion cubic meters of natural gas into Europe per year. Read more “The Trans-Anatolian Pipeline, Explained”

China-Russia Gas Pipeline Should Concentrate Minds in Brussels

The Power of Siberia natural gas pipeline in Russia's Far East
The Power of Siberia natural gas pipeline in Russia’s Far East (Gazprom)

Russia has started piping gas to China through a new pipeline, called Power of Siberia. After five years of construction, it will be able to send up to 38 billion cubic meters of gas to China per year.

The pipeline marks a reorientation of Russian energy policy away from the European market, which should give European policymakers some concern. Read more “China-Russia Gas Pipeline Should Concentrate Minds in Brussels”

Balkans Propose Mini-Schengen

Chancellor Angela Merkel of Germany and Prime Ministers Mateusz Morawiecki of Poland, Boyko Borissov of Bulgaria and Zoran Zaev of North Macedonia deliver a news conference at the Western Balkans Summit in Poznań, July 5
Chancellor Angela Merkel of Germany and Prime Ministers Mateusz Morawiecki of Poland, Boyko Borissov of Bulgaria and Zoran Zaev of North Macedonia deliver a news conference at the Western Balkans Summit in Poznań, July 5 (Government of the Republic of Northern Macedonia)

Their EU accession blocked by France, Albania and North Macedonia are opting for a regional, if temporary, solution. Together with Serbia, the Balkan states are looking to create their own version of the EU’s passport-free Schengen Area.

  • Citizens of the three countries would no longer need a passport to cross the border, but only have to show an ID card.
  • Labor movement would be liberalized through the mutual recognition of diplomas and qualifications.
  • Students could go on exchange.
  • Capital flows would be smoothened.

The other non-EU countries in the region — Bosnia, Montenegro and Kosovo — have been given the green light to join. Read more “Balkans Propose Mini-Schengen”