Schröder Tries to Save the Struggling German Economy by Negotiating with Moscow

Friday, August 5, 2022

Ahmed Adel, Cairo-based geopolitics and political economy researcher

The visit of former German chancellor Gerhard Schröder to Moscow is connected with his desire to find a way out of the current crisis in which Germany finds itself in. Behind his visit were certain financial and economic circles who see that Germany is dying as a global economic powerhouse and believe that strengthening trade relations with Russia could be a salvation for the failing economy and energy crisis.

Schröder’s recent visit to Moscow caused a lot of media attention and mixed reactions in Germany. Many Germans supported his statements on relations with Russia and the Nord Stream 2 gas pipeline, the commissioning of which, in the opinion of the former chancellor, would be the simplest solution to solving the problem of gas deficit in Germany.

At the same time, he received a lot of criticism from the elite, who described him as “Putin’s lobbyist”. The current German chancellor, Olaf Scholz, distanced himself, stating that Schröder’s trip was not agreed upon with him.

Although Schröder has retired from politics, he still carries heavy political weight in Germany. Undoubtedly, the German business community, who are now going through difficult times, have their interests represented by him. It can be safely assumed that one of the main topics of discussion was the situation with Russia’s oil and gas complex around Nord Stream-1 and Nord Stream-2.

At the end of July, German media announced that Schröder was in Moscow and discussed with Russian officials the delivery of gas via the Nord Stream gas pipeline. Later, Russian presidential spokesman Dmitry Peskov confirmed that President Vladimir Putin had met with Schröder, stating that the former chancellor is very worried about the real state of affairs and the energy crisis that is flaring up in Europe.

Schröder asked Putin to explain the situation and Russia’s point of view, but he did not want to be a mediator in solving the situation in Ukraine or the current gas issue. On the other hand, Putin explained to Schröder that deliveries of Russian gas to Europe have been reduced multiple times due to European sanctions and Ukraine’s suspension of transit through one of the legs of the gas pipeline under a fabricated pretext. Deliveries via Nord Stream fell from 167 million cubic metres per day to about 30 million. The Russian president confirmed that the Nord Stream 2 gas pipeline is technically ready for “immediate use” though.

The energy crisis that is shaking the EU and Germany is largely artificial and externally induced, and for this reason many German citizens support the former chancellor’s statements about the need to launch Nord Stream 2 and maintain dialogue with Russia. Many German citizens see Schröder as a political veteran who is trying to save the country from economic adversity.

Germans agree that there is little chance that Berlin will listen to the words of the former chancellor, and, according to some comments, Schröder’s willingness to build contacts with Putin seems more profitable than the actions of Chancellor Olaf Scholz. Even those who generally do not support Schröder believe that he remains one of the few who see the bigger picture.

Although Schröder is an experienced statesman, it is unlikely that German authorities will listen to him despite his efforts to solve the difficulties that Germany is facing in the economy and energy sector. The current German administration is not able to conduct an effective dialogue with the Kremlin as it wrestles between Western liberal ideology and the harsh reality of needing energy, especially as winter is slowly but surely approaching.

Figures like Schröder, who do not hold an anti-Russian position and prefer to resolve issues through discussions, become more important in shaping public opinion and understanding the reasons why there is an energy crisis and inflation to begin with.

According to European Commission data, which the DPA agency had access to and was reported by German media, Germany will have to save 10 billion cubic metres of gas from August 2022 to March 2023 in order to achieve the EU’s 15% savings goal. This is significantly more than the others and corresponds to approximately the annual consumption of five million four-person households.

In comparison, Italy will have to save a little more than eight billion cubic metres of gas in order to achieve the EU’s target; France and the Netherlands only need to save five billion cubic metres. In total, the EU wants to save around 45 billion cubic metres of gas.

German Economy Minister Robert Habeck announced earlier that his country is ready to comply with the EU’s goals. He even said that Germany is ready to save more than 15%. But this highly unlikely, which makes Schröder’s visit to Moscow all the more important if Berlin wants to save itself from a catastrophic economic and energy disaster before the winter arrives.

Source: InfoBrics