Analysis-Schroeder throws in towel as German industry clings on to Russian gas -Breaking
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© Reuters. FILE PHOTO – Former German Chancellor Gerhard Schroeder poses for Reuters during a interview in Berlin with Reuters on November 15, 2018. REUTERS/Fabrizio Bensch/File Photo2/2
Christoph Steitz, John O’Donnell
FRANKFURT (Reuters] – Gerhard Schroeder stepped down from holding a high ranking position at Russian energy giant Gazprom. (MCX:) This represents a major setback for Germany’s natural gas lobby, which is trying to preserve its dependence on Russia.
Former German chancellor had a crucial role in creating the energy link between the two countries and protecting it for over 20 years.
Rosneft, Russia’s oil giant, announced earlier this month that Schroeder would be stepping down as its chairman, after a torrent of negative comments.
Schroeder, who was blacklisted by the European Parliament, said that he will not be nominated for Gazprom’s supervision board. Schroeder’s office, which was funded by taxpayers in Germany, had also been closed amid public protests over Russia connections.
He has ended a controversial career which saw him form a friendship to Russian President Vladimir Putin.
Putin stressed the role of Schroeder in ensuring a steady and cheap supply of gas, pointing out that he was a key guarantor. Putin said to journalists that the German citizen must look into his wallet and determine if he’s willing to pay more for electricity and gas.
Putin said that if he does not want to do it, he should thanked Mr. Schroeder. He described him as “respectable” and had helped lay the groundwork for Germany’s import of gas from Russia. He worked hard to make this happen. He is the one who made it possible.
But while Schroeder’s departure from the public eye marks the end of his career, Germany’s energy lobby and pro-Russian voices elsewhere continue to make themselves heard.
“Germany’s Russia policy has been deeply established in the history. This goes much deeper than Gerhard Schroeder,” stated Veronika Grimm (one of the chief economists that advises Germany’s chancellery).
It won’t matter if he quits his Russian offices. Russia’s dependence continues.”
Grimm supports a change of tack, but believes that there are many Germans against such a shift.
While no one would dare to admit it, there are some who believe that Russia and the United States can resume normal relations.
Although there were many promises about arms delivery and sanctions, Germany has not changed its relationship with Russia since the conflict in Ukraine. At least, as far as gas flows go.
The Russian gas supply to Germany has been almost continuous since the war began.
On the basis that cutting long-term gas supply contracts would cause an economic meltdown, they are being honored.
Uniper is Germany’s largest Russian gas importer. Last week, Uniper stated that existing Gazprom gas contracts would be in place until at least the middle of next decade. This contradicts Robert Habeck of Germany’s Green party economy minister, who seeks to end dependence on Russian gas by 2024.
Klaus-Dieter Maubach was Uniper chief executive and described Gazprom as reliable suppliers, contrary to Habeck’s assertions about Russia.
German giants such as the chemicals company BASF are just a few of many that recognize the significance of Russian gas.
Russia provides around half of Germany’s natural gas. Russian gas shipments thus underpin the competiability of our industry,” Martin Brudermueller CEO BASF said last month.
“Unexpectedly, Russia would cut off its natural gas supply to the United States. This could cause economic irreversible damage.”
Industry professionals also see Habeck’s timeline as a guideline for cutting ties.
Markus Krebber (CEO of RWE), Germany’s largest producer of power and biggest importer Russian gas from Russia, stated it would be more feasible to end all ties between the two countries in 2025 than in 2024.
Germany’s Gas Lobby hopes to keep the status quo until then.
Schroeder seems to have two important positions, one as the chairman of Nord Stream 1’s shareholders’ committee. This is the main artery which supplies the German industrial sector with low-cost Russian gas.
According to his LinkedIn profile, he is the chairman of Nord Stream 2’s board of directors. This sister pipeline was also shelved earlier in the year. Schroeder didn’t respond to our requests for comment.
Many people see a severed relationship with Russia as more than just energy.
Michael Huether, of the German Economic Institute said that Russia has been supported by more than Gerhard Schroeder.
German politics has a rich tradition of Russian nostalgia, fueled by the past, socialism, and disillusionmentment with America. “We’ve sometimes turned our blind eyes to Russia’s mistakes.”
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