Monday, 18 July 2011

Former German chancellor Gerhard Schröder´s Russian activities

When Schröder left office, the Bundeswehr band played the Frank Sinatra hit My way. The choice of music was, unintentionally, quite revealing, when one considers the kind of "network" Sinatra was involved with. (More about Schröder´s "network" below)

During cold war a considerable number of western intellectuals, artists and politicians were used by the Soviet Union as so called useful idiots. The USSR:s Communist leaders of course in private laughed at these credulous "idealists", who in general did not understand what they were doing.

Those in the West who sided with the Soviet Union - and were paid for it by the KGB and other similar Soviet organizations - were, of course, not useful idiots, but traitors.

After the fall of Communism, a lot changed in the former Soviet Union, but the longer former (second rate) KGB spy and FSB boss Vladimir Putin has been in power, the more obvious it has become that the legacy of the evil empire is live and kicking in Russia.

Putin´s Russia is now one of the world´s most corrupt countries, without rule of law and properly functioning democratic institutions. That is why most serious analysts have no problems in agreeing with how former U.S. defense secretary Robert Gates characterized the country:

“Russian democracy has disappeared, and the government is an oligarchy run by the security services.”

Other leaked American cables confirm Gates´s description: "Russia has become a virtual "mafia state" with widespread corruption, bribery and protection rackets"

Putin himself has declared that the collapse of the Soviet Union was "the greatest geopolitical catastrophe" of the 20th century.

But for many years now, Putin has had a powerful western friend and promoter in the former German chancellor Gerhard Schröder.

Schröder made some headlines already in 2007 when he told an interviewer that Putin is a "flawless democrat". Although evidence about the contrary is overwhelming, the former chancellor still is not prepared to reconsider his opinion:

 "I have not changed my characterisation of the Russian President, and I will not take my words back" ( Schröder, May 7, 2011).

The reason for Schröder´s uncritical support of Putin becomes clear when one looks at what happened in the weeks and months before and after he had to resign as German chancellor in 2005:

Less than one month before leaving the chancellorship, Schröder used his office to guarantee a $1.4 billion loan (later turned down) for a Kremlin-backed natural gas pipeline that would connect Russia to Germany via the Baltic seabed. Then, just days after stepping down, Schröder accepted a senior post with the pipeline consortium run by Russia's state gas monopoly Gazprom. The deal was a huge scandal inside Germany, where Schröder had already been known for years as Genosse der Bosse -- "comrade of the bosses."
The chancellor's move to the Kremlin energy payroll inspired a wave of alarm in Europe over its potentially dangerous dependence on Russia for natural gas. Moscow supplies about a third of the European Union's gas -- Europe's preferred heating source -- and some of its countries are 100 percent dependent on Russia. What's more, Europe's annual gas consumption is set to rise 40 percent by 2030, further stoking those fears about Russia. Several times in recent years, the Kremlin has abruptly cut off gas deliveries after disputes with key transit countries such as Ukraine, leaving millions of Europeans shivering in the winter cold.

Read the entire article here

Some analysts have described Herr Schröder´s behaviour in a more blunt way:

Schröder was given a lucrative position as an advisor of the Russian state-owned gas company Gazprom. The gas deal is generally perceived as being a private pension scheme which Schröder – a Socialist – has provided for himself.

Schröder´s and Putin´s gas deal was, rightly so, criticized by many, not least by people, who knew what it meant to be under Soviet domination:

Polish Defense Minister Radek Sikorski -- whose country, along with Ukraine, Lithuania, and others, feared the end of transit fees and access to Russian gas -- compared the Nord Stream deal to the Molotov-Ribbentrop pact that partitioned Poland between Nazi Germany and the Soviet Union in 1939.

Former Czech President Vaclav Havel told RFE/RL the pipeline project was a "provocation." It could only be completed "by people who don't know anything about modern history, or what's going on today."

When Schröder´s successor, conservative Angela Merkel (former citizen of the DDR) entered office, many people thought that things would change with regards to Russia, but unfortunately Merkel has been a disappointment:

During her first visit to Moscow as head of state -- in January 2006, shortly after Russia's gas shutoff to Ukraine -- Merkel made a point of meeting human rights activists to signal a departure from Schroeder's refusal to so much as nod in their direction.

That "changed the atmosphere," said Beck, a prominent rights advocate. But, she added, Dmitry Medvedev, who has cultivated a misleadingly liberal image since becoming Russia's president in 2008, has since "softened" views toward Moscow. "He looks like the West and talks like the West, so relations are more friendly and relaxed. But when it comes to real change in Russia, you don't find much."

Nevertheless, Merkel soon dropped her combative stance. Her first government, which lasted until 2009, sold its renewed drive to engage Russia as an updated Ostpolitik.

Now "rapprochement through economic interlocking" would supposedly encourage Moscow to adopt Western values by helping integrate it into the Western economy, a notion the energy lobby tirelessly promoted.

By 2008, Germany again appeared to be Russia's biggest booster in Europe. When the Bush administration campaigned to put Ukraine and Georgia on a path to NATO membership, which provoked fury in Moscow, Merkel led the opposition to the plan.

NATO rejected the initiative, despite international outrage over Russia's summer invasion of Georgia. Beck said she believes Merkel "closed the window of opportunity" on Ukraine, where a new pro-Moscow government is now busy arresting former pro-Western officials.

Perhaps more tellingly, Merkel then headed the effort to block proposed EU regulations that would have restricted foreign companies from buying European energy utilities, measures aimed at slowing Gazprom's advance.

From a western point of view, the picture does not get much better, when one looks at the kind of network Putin and Schröder are operating with:

Putin has been especially adept at employing a legacy of the Cold War: a network of former East German officials still doing Moscow's work in Germany. The number of ex-Stasi agents among its ranks, including Gazprom Germania's director of personnel and its director of finance, who was investigated in 2008 for allegedly lying about his past, is particularly disturbing to critics.

But the best example of the Kremlin's use of communist-era intelligence agents for building modern-day Russia's state-controlled energy industry is Matthias Warnig. The director of the Nord Stream consortium is a decorated former Stasi officer who "The Wall Street Journal" reported as having helped Putin recruit spies in the 1980s, when the future president was a young KGB operative in the then-East German city of Dresden.

Dresdner played a role in the state takeover of Mikhail Khodorkovsky's Yukos oil company in 2004, when the bank's investment-banking arm valuated Yukos assets for the government. Later sold to an unknown shell company in a rigged auction, those assets were eventually acquired -- with the help of a loan from the same Dresdner Bank -- by state-controlled Rosneft, which became Russia's biggest oil company.

Read the entire article here
More about Schröder, Putin and Warnig here

The Nord Stream pipeline is scheduled to be completed at the end of next year at a cost of an estimated 7,4 billion euros ($10.3 billion). However, there are now serious questions about the economic viability of the project:

But new developments in the global gas market have put the project under question. When Nord Stream was inaugurated five years ago, experts were predicting future gas shortages, but the current situation is "completely different," economist Kemfert said.

New discoveries of gas in the United States, Middle East and elsewhere that are increasing global supplies and the advance of LNG -- liquefied natural gas that can be shipped anywhere by tanker -- are driving a burgeoning spot market for short-term gas deals.

Together with the reduction in energy demand caused by the global financial crisis, those developments are driving down prices and transforming the global gas market. Although prices rose earlier this year as a result of the earthquake and tsunami in Japan, many economists believe the disaster will actually push prices down because of its negative impact on industrial production.

Westphal speaks of a "power shift." "Before the global financial crisis, the Kremlin set the rules," she said. "Now gas markets are under pressure. It's amazing." Kemfert agrees, saying the Nord Stream pipeline is "unnecessary," partly because Russia isn't investing enough in gas production to ensure it will be adequately supplied.

E.ON Rurhgas and other German companies are said to be questioning their decisions to sign long-term contracts for Russian gas, which is pegged to the rising price of oil. "I'm not sure how aware Russia is about this," Westphal said. Since bilateral contracts are negotiated in secret, it's hard to know how much the changing market is affecting relations, but many point to E.ON Ruhrgas's decision to sell its 3.5 percent stake in Gazprom in November 2010.

Read the entire article here

The article cited above does not specifically mention the most recent, and crucial, development, which is going to be detrimental to the Putin-Schröder pipeline - the influence of the American led shale gas revolution in Europe. As we have reported in several earlier posts, shale gas is going to be a major game changer in Europe, and porticularly so in Poland (and probably also e.g. in the Ukraine).

When shale gas from Poland is available, the Russians will not anymore be able to dominate the European gas market in the same way as hitherto. Neither will Putin be able to use gas a political weapon against other countries.

This is why the Kremlin and Gazprom, with the assistance of their "friend" Gerhard Schröder, have started a lobbying campaign against shale gas exploration in Europe. In this campaign the Russian join forces with the green movement, which is against all fossile energy sources. In the European Parliament, Schröder´s socialist friend Jo Leinen is already working on legislation to make it impossible in reality to utilize the enormous shale gas resources in Poland and other European countries.

However, the Russians, their German supporters and the greens are going to be disappointed. The Poles (supported by a number of other countries) will not accept that their future is again decided by outside forces. Poland has a unique chance to become "a new Norway", to use the words of foreign minister Sikorski, and it is also in the general European interest that it is given a chance to fulfill its dream.

But what should one think of people like Gerhard Schröder?

He is definitively not a useful idiot. Whether he fits into the other group of people mentioned in the beginning of this post, I leave for you, dear reader, to judge.

In addition to lobbying for Putin´s Russia, Schröder is also actively promoting Iran:

The German Near and Middle East Association (NUMOV), an NGO whose honorary chairman is former German chancellor Gerhard Schröder, is promoting billions of euros of trade between German companies and Iran.

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