Behind Washington’s imperial tussle with Berlin

The US hopes sanctions on the Nord Stream 2 gas pipeline will stop Germany's economic 'drive to the east'.
Friday, July 14, 2017

In regard to the charges about US President Donald Trump’s collusion with Russia to throw the election his way, it is worth mentioning that going through the list of all the nations that Washington has meddled in is far too long for one article. The US is, without any doubt, the world’s meddler in chief.

Even the list of countries where the US conspired to overthrow elected governments when electoral meddling failed is lengthy.

But one angle to the Russian controversy that is underreported is this: scratch the Russian connection and US-German relations pop up.

The US Senate recently adopted new sanctions against Russia, ostensibly as punishment for its electoral “meddling”. The vote was 97 to two, indicating strong bipartisan support.

A key aspect of the Senate bill, however, reveals its real intents. It has nothing to do with US elections, rather it stipulates sanctions against a proposed new pipeline that would deliver natural gas to Germany under the Baltic Sea.

The actual target of the bill is Germany.

German tensions

The Economist reported Germany’s reaction in a June 22 article:   “‘Europe’s energy supply is Europe’s business, not that of the United States of America’, thundered Germany’s foreign minister, Sigmar Gabriel, and Austria’s chancellor, Christian Kern, in a joint statement.

“The pair were particularly incensed that the bill included a call to increase American exports of liquefied natural gas, implying that blocking Russian gas was partly an effort to help American energy companies. Angela Merkel, Germany’s chancellor, let it be known that she supported her minister.”

The pipeline is called Nord Stream 2. The Economist said: “NS2, which its backers hope will come online at the end of 2019, would supply gas directly from Russia’s Baltic coast to the German port of Greifswald, doubling the capacity of Nord Stream 1, an existing line. Its defenders, including a consortium of five European firms that will cover half its cost of [US$10.6 billion], say that it will help plug a projected gap between Europe’s stable demand for gas and declining production in the Netherlands and North Sea.”

Currently, much of Russia’s gas export to Europe goes through pipelines in Ukraine, which charges lucrative transit fees. The NS1 and 2 combination could bypass those pipelines and deliver the gas cheaper. It would also be cheaper than liquefied natural gas produced in the US, which has to be liquefied and shipped across the Atlantic.

The Economist added: “Some Germans quietly hope that NS2 could transform their country into a European energy hub.” Washington seeks to prevent that development.

The US House of Representatives has yet to take up the Senate bill. The White House has urged House Republicans not to support a provision in the bill that would prevent the president from modifying it, but made no mention of the pipeline. Is the delay because of the strong German reaction?

Very few people in the US know about the proposed sanctions on NS2 or the German reaction. I have not seen coverage in the major media in the US.

Continuing disputes

The Economist noted: “Like vinyl records and popped collars, rows between the United States and Europe over Russian energy are making a comeback. In the early 1980s Ronald Reagan’s attempts to thwart a Soviet pipeline that would bring Siberian gas to Europe irritated the West Germans and drove the French to proclaim the end of the transatlantic alliance.

“The cast of characters has shifted little today, but many of the arguments are the same.”

Actually, the issue goes back much further than Reagan. With the rise of modern German imperialism in the late 19th century, German policy toward Russia and Ukraine was summed up in the phrase “Drang nach Osten” — Drive to the East. The aim was to link up German industry with cheap Russian and Ukrainian raw materials and foodstuffs.

The two world wars that the US fought against Germany were, in part, aimed at stopping such a link-up.

Since World War II, Germany has rebuilt. In fact, it now exports much more to the US than it imports from the US. The economic conflicts between the US and Germany are reappearing due to Germany’s increasing industrial dynamism combined with the dramatic industrial decline in the US.

Germany’s competitive position was further strengthened by the destruction of the nationalised, planned economy in East Germany a quarter of a century ago.

The return to capitalism in eastern Germany created mass unemployment there. The German ruling class was able to use this in the reunified Germany to drive down wages across the whole country. This increased capitalist Germany’s competitive position in the world and vis a vis the US.

Germany feels strong enough to once again “drive to the east”,  and the proposed pipeline is part of that.

Different approaches

How to deal with German competition has become a divisive point within the US ruling class. This is reflected in the different approaches of the Trump administration and the mainstream US establishment.

Trump says that continued economic competition with Germany requires powerful countermeasures by the US state. He treats Germany as the main enemy in Europe. Russia is viewed as much less of a threat as far as industrial competition is concerned, since Russia is primarily exporting raw materials (oil and gas).

The mainstream ruling class representatives — which still dominate the media, the Pentagon, the CIA, Congress and both major parties — think that economic friction with Germany can still be worked out within the existing “world order” dominated by the US since World War II.

But this “world order” has become increasingly shaky, as Foreign Affairs — the organ of the Council on Foreign Affairs, the ruling class’s foreign policy think tank — has recently emphasised.

Trump and his economic nationalist advisors, such as the far-right Steve Bannon, are acting as if the old “world order” is collapsing and needs to be reordered along “America First” lines.

The “establishment” wants to keep Germany tied to the US and curtail its economy by preventing its “drive to the east”. This is the reason for imposing sanctions on both Russia and German firms seeking to build NS2, for example. Trump, however, wants to ease sanctions on Russia and fight Germany directly.

The sanctions on the pipeline, a blow against Germany that Trump supports, would seem to conflict with Trump’s position to ease sanctions on Russia. It may be that Trump is yet to resolve the contradiction. How all this will play out remains to be seen.

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