How Europe can end Russia’s grip on gasby Dieter Helm / April 24, 2014 / Leave a comment
Published in May 2014 issue of Prospect Magazine
Russian President Vladimir Putin in 2011 at the opening of the Nord Stream pipeline, which supplied Germany but bypassed Ukraine
© Bloomberg via Getty Images
Russia’s southern and eastern borders have been in a permanent state of flux since Catherine the Great first annexed Crimea in 1783. The latest opportunist annexation is but one more episode in a long history. Joseph Stalin gained almost all the territory Russia coveted in what he regarded as its backyard. Mikhail Gorbachev then lost most of it. The game is now being rejoined in Georgia, Ukraine, Moldova and possibly in the Baltic states too. Europe’s eastern borders have rarely been settled for long, and they are not now.
The Russian strategy has been financed in large measure by oil, and now gas, too. Oil kept the Soviet economy afloat. Having witnessed the collapse of the Russian economy under Boris Yeltsin in the 1990s as oil prices plummeted, Vladimir Putin understood that control of Russia’s mineral resources is essential to rebuilding the country’s standing in the world—and with it redressing what he sees as the greatest political catastrophe of the 20th century: the breakup of the Soviet Union. With a declining population and a sclerotic economy plagued by corruption, it doesn’t have much else. Putin’s graduate thesis on natural resources and strategic planning, which he completed at St Petersburg University in 1996, spelt all this out.
This poses a challenge to Europe, which needs to develop a coherent strategy for reducing its dependency on Russian gas. While European leaders have dithered, Putin has been utterly singleminded in pursuing his agenda. It is true that he has ducked and weaved, as smart politicians do—first when Russia was weak, and the oil price low, back in 2000, and then during the regular crises that have since punctuated global politics (9/11, the US invasion of Iraq, Russia’s incursion into Georgia in 2008, the civil war in Syria and now Ukraine). But his strategy has remained remarkably consistent.