New sanctions + New defense policy + Chi • Table.Briefings

Dear reader,

I hope you will still recognize the Federal Republic of Germany and Europe this morning. Politically, many things are different today; this weekend was a turning point, as Chancellor Olaf Scholz calls it. Everything is different, while the Russian army continues its attack on Ukraine with Belarusian support.

A look across Europe: The EU has approved €450 million in arms for Ukraine, and €50 million for other goods. Sweden, which tends to be neutral, has decided to supply weapons and armor to Ukraine. Finland is permitting the export of weapons through Estonia, and Germany is also clearing the way for exports – and is even supplying them itself.

As a result of the invasion of Ukraine by the Russian Federation, the German government, which has been in office for less than 100 days, has abandoned many positions that were previously considered unchangeable. This has also had an impact on Europe and the EU, with major changes now to be tackled with even greater speed. Reducing Europe’s and not the least Germany’s energy dependence is now a matter of acute geostrategic relevance.

In addition, Germany will be massively reinforcing its armed forces, and inventories at Europe’s manufacturers of all kinds of weapons systems are likely to empty rapidly when the German government announced €100 billion in special funds are to be spent in 2022 for this purpose. Germany is now pursuing a different, more active defense policy. Thomas Wiegold analyzes what this also means for European cooperation.

The weekend also brought a variety of European measures. Russian banks, which were included in the scope of restrictions late Friday night with the publication of the Official Journal of the EU, were hit with further sanctions on Sunday evening. The toughest sanction, for now, is likely to be the one against the Russian Central Bank. Eric Bonse explains why this is nevertheless not the “nuclear option”.

Many eyes are looking to China. Will Xi Jinping back would-be Russian savior Vladimir Putin? At any rate, Russia is not yet in a position to redirect European gas sales toward Beijing. But that is likely to change in the medium term, analyzes Frank Sieren.

Your
Falk Steiner

Decision on SWIFT exclusion serves German and US interests

By

Eric Bonse

It was still controversial on Friday, announced on Saturday, and decided on Sunday: The EU is excluding key Russian banks from the SWIFT international banking data system, drastically limiting the Russian central bank’s ability to support the economy. “We are taking away the central bank’s ability to use its assets internationally,” EU Commission President Ursula von der Leyen said in Brussels.

The surprising decision, which according to British financial expert Adam Tooze is equivalent to a “full-scale financial war”, was preceded by feverish negotiations. At the EU summit on Thursday, Germany, Italy, Hungary and several other EU countries had still spoken out against including SWIFT in the sanctions package. German Chancellor Olaf Scholz said that the agreed measures should be adhered to for the time being.

However, Germany came under pressure after Italy withdrew its concerns and the US, France, and Ukraine called for a further tightening of financial sanctions. The German government corrected its position and gave up its veto. The condition: That “the collateral damage” of a disconnection from SWIFT can be contained in such a way “that it hits the right people”. The energy sector and raw materials were to be spared.

After feverish negotiations, the EU Commission finally presented a compromise. According to it, the Brussels authority, France, Germany, Italy, the United Kingdom, Canada, and the United States have agreed “that selected Russian” banks will be excluded from SWIFT. This will “ensure that these banks are disconnected from the international financial system“, according to a joint statement released Saturday.

Details remain decisive

It also said it wants to “impose restrictive measures that will prevent the Russian Central Bank from deploying its international reserves in ways that undermine the impact of our sanctions”. Details are to be worked out next week by a transatlantic task force, the G7 said. This task force, which is expected to include Germany, is to ensure effective implementation of the financial sanctions.

The devil is in the details. Because exclusion from SWIFT is not enough, as political scientist Andreas Nölke made clear in an interview with Europe.Table. “The discussion about excluding Russia from Swift is misleading,” Nölke said. Swift is purely a payment information system, a kind of messenger service used by banks. To actually prevent payments, Russia would additionally have to be excluded from the correspondent banking system.

The US government has already announced this in the case of Sberbank. However, it has generally exempted transactions for energy deliveries from sanctions as long as they are processed through non-sanctioned non-US banks, the expert says. “This contradicts the purpose of strong sanctions,” Nölke says. Western governments wanted to demonstrate that they were doing something, but without creating too many problems for themselves.

Energy payment transactions still possible for the time being

Ultimately, it comes down to the list of affected banks and the financial transactions exempted from sanctions; so far, neither Gazprombank, Sberbank, nor VTB Bank have been affected. So the EU and the US have not yet pulled the dreaded “financial nuclear option”. They have, however, armed the fuse. Business with Gazprom and other energy and commodity producers operating in Russia will remain possible for the time being. This is not least in the interest of the USA, which has recently significantly expanded its oil imports.

Germany can also breathe a sigh of relief. Federal Minister of Finance Christian Lindner (FDP) had warned as recently as Thursday evening that there was “a high risk” that the Federal Republic “would no longer be supplied with gas or with raw materials”. This danger seems to have been averted for the time being. Nevertheless, Association of German Chambers of Industry and Commerce (DIHK) President Peter Adrian expects “noticeable repercussions” for the German economy. The consequences for the energy supply would have to be closely monitored.

This also applies with a view to the new punitive measures against the Russian central bank. They could also – at least indirectly – jeopardize the gas and oil supply in Europe and the USA. According to information from Brussels, currency reserves of $630 billion are at stake. This enormous “financial cushion” could be rendered largely worthless by Western sanctions. However, there are question marks here as well.

It is unclear, for example, how many reserves are held in dollars and euros – and where. The German Bundesbank will have to answer some awkward questions at its next press conference the day after tomorrow, according to British financial expert Tooze. That’s because substantial Russian deposits are suspected in Frankfurt. If they are frozen, this could trigger a hostile reaction in Moscow – up to and including a halt in gas supplies.

New defense policy: repositioning with open questions

German security and defense policy has been set on a completely new course within a few days, actually within a few hours. In the wake of Russian President Vladimir Putin’s attack on Ukraine, the still-new traffic light coalition of the SPD, the Greens, and the FDP has fundamentally overhauled Germany’s rather cautious stance on the military and defense since the end of the Cold War. And this is by no means just about money – even if Chancellor Olaf Scholz’s pledges are pretty much at odds with the line taken by former German Finance Minister Olaf Scholz in the previous grand coalition.

Of course, the chancellor’s surprising pledge to provide the Bundeswehr with a special fund of €100 billion for the next few years and also to increase the annual defense budget to more than two percent of gross domestic product is the most striking step toward the new security policy. Despite the huge sum, however, what is more decisive is what stands behind this financial effort as an intellectual turning point: The very suddenly discovered awareness that security policy and functioning armed forces are part of national services of general interest, like the provision of medical care, roads or electricity grids.

Germany’s European repositioning

However, the discernible rethinking also means a new positioning of Germany in Europe. Until now, the economically strongest country in the European Union had placed comparatively little value on deployable and assertive armed forces. This is in marked contrast to France and the United Kingdom, which is now outside the EU but still European. This was and is certainly due to German history. But the reference to this was increasingly understood by European neighbors as an excuse not to get too involved militarily. A Polish foreign minister confessed years ago that he was now more concerned about German armed forces being too weak than too strong.

This German attitude was reflected not only in the financing but above all in the structure and organization of the Bundeswehr. Since the 1990s, it had been transformed into an armed force for foreign missions, for so-called crisis management. Missions in Kosovo, then in Afghanistan, and then in Mali in West Africa characterized the formation. To this end, the Bundeswehr was, as its Inspector General Eberhard Zorn put it, “ready for action in a planned manner”: Contingents equipped and assembled for a task with a long lead time were the everyday business. The core task, defined in the Basic Law as “the Federation shall establish armed forces for defense”, was increasingly relegated to the background.

A change of course, cautiously, was admittedly initiated after the Russian annexation of Crimea. A “country/alliance defense working group” was even set up in the Ministry of Defense. The basic planned operational readiness changed only little: Even the troops for the so-called NATO spearhead, also provided by Germany at regular intervals, did not have all the required equipment at their disposal for the time being and had to borrow some of it from other units in the Bundeswehr.

Focus on high-tech projects – basic equipment neglected

In addition, when it comes to financing the Bundeswehr, the focus has been on large-scale high-tech projects: the joint FCAS air combat system with France and Spain, a replacement for the aging fleet of Tornado fighter jets, new helicopters. Very simple things, neither technically demanding nor difficult to procure, were pushed into the background. The military leadership estimates that it would cost between €10 and €20 billion just to increase ammunition stocks, which NATO requires for 30 days of combat.

With the change of course in defense policy, the coalition government seems to have resolved not only to refocus the Bundeswehr on its original mission – but also to actually equip it for it. Whether and how quickly this succeeds will depend not least on how much of the promised new money goes into replenishing the empty depots and not just into new major projects.

However, this will also require a rethink within the Bundeswehr itself. Last week, even before the Russian attack on Ukraine began, national armaments director Carsten Stawitzki had also ordered an internal change of course. Numerous vehicles and pieces of equipment deemed unfit for service in light of current – civilian – regulations were to be reevaluated: An off-road vehicle with a defective turn signal, for example, not roadworthy according to road traffic regulations, is perfectly suitable for military use – and thus ready for deployment. This attitude, the vice admiral demanded, must apply to all equipment of the troops in the future. (Thomas Wiegold)

China’s gas needs are Putin’s future

The meeting between Russian President Vladimir Putin and Chinese leader Xi Jinping at the opening of the Winter Olympics in Beijing had the demonstrative effect of a geopolitical closing of ranks. But it also had enormous energy policy significance. Putin and Xi signed an agreement on gas and oil supplies from Russia to China worth $117 billion.

What is almost more important: A new pipeline called Power of Siberia 2 is to be built for supplying gas. The pipeline is to originate in the Bovanenkovo and Kharasavey gas fields on the northern Siberian peninsula of Yamal, from where Europe is also supplied. It would be the first time that Europe and China would be supplied from the same gas fields. That changes the geopolitical landscape even before the pipe is built. Until now, China has been getting Russian gas through the Power of Siberia 1 pipeline, which originates in other gas fields.

However, the project is by no means new. Back in 2014, the Russian energy company Gazprom and China’s state-owned commodities group CNPC signed a framework agreement for the pipeline. But the project stagnated. There was no agreement on prices and infrastructure spending. But that has changed now. China’s hunger for gas has increased substantially since then, and the construction of the pipeline is becoming a reality.

The route has been changed on both sides for political reasons. Instead of crossing the Altai mountain range to Xinjiang, it will now run diagonally through Russia, past Siberia’s Lake Baikal, and through Mongolia, even though this is more expensive.

USA and Russia: politics of interests over raw materials

Russia holds the world’s largest gas reserves, is the largest gas exporter, and also has the eighth-largest oil reserves. Putin is gradually becoming less dependent on Europe as a result of the new commodity deals with China. As a result, Beijing – even though it explicitly rejects a war over Ukraine – has indirectly created the room for Putin to maneuver in Ukraine. The incipient invasion of Russian troops in eastern Ukraine caused the price of oil on the Asian stock exchanges to rise to more than $100 per barrel on Thursday for the first time in seven years.

The USA also wants to sell more of its oil and gas to Europe. After Russia, Qatar, and Iran, it holds the fourth-largest gas reserves. In terms of oil, they are still in eleventh place. The USA has once again become a major player in the gas business, mainly due to fracking, or shale gas, which is banned in Germany due to its environmental impact. Russia is its competitor.

Germany also does not yet have a single terminal that could handle shiploads of liquefied natural gas (LNG) from the USA or Qatar. Plans for LNG facilities in Stade and Brunsbuettel have been on the table for years, but they have not been implemented so far. Now, according to a German news report, the plans for the Stade plant are becoming more concrete. However, the approval process is likely to take at least a year.

Gas poker: weakened position of Germany and the EU

German Chancellor Olaf Scholz has developed a compromise to obtain both Russian and American gas. He wanted to subsidize the construction of LNG terminals with up to €1 billion in taxpayers’ money, provided the US gave up its opposition to the Nord Stream 2 Baltic Sea pipeline in return. However, due to the Russian invasion of Ukraine, Germany has since halted the licensing of Nord Stream 2 anyway.

Moreover, Scholz had underestimated the role of China. Beijing has made it possible for Putin to provoke the West with the agreed gas supplies to Russia. This destroyed Germany’s comfortable position of being able to decide where and how much gas to buy. Grotesquely, Beijing has thus indirectly helped Washington to assert its interests in Europe – and weakened the position of Germany and the EU in the process.

As early as 2021, the US sold more gas to the EU than Russia for the first time. While the EU has tried to build up a second mainstay with the US to reduce its dependence on Russia, Putin has just built up the second big customer China so as not to be too dependent on the Europeans.

China is forced to act

At present, however, the supply weight is still clearly leaning toward the EU. Moscow supplies 30 percent of its gas to Europe, but so far only seven percent to China. But China wants more Russian gas to reduce its dependence on gas supplies from geopolitical rivals (China.Table reported). Russian oil and gas supplies do not have to pass through third countries or international shipping lanes. Beijing can stomach the fact that the Power of Siberia 2 is to run through unproblematic Mongolia.

Another reason why gas demand is rising is that Beijing plans to switch as much of its power generation as possible from coal to gas to achieve its climate goals. Consulting firm McKinsey, therefore, expects China to consume twice as much gas in 2035 as it does at present. In 2040, gas consumption is even expected to rise to 620 bcm (billion cubic meters), according to plans by Chinese energy company Sinopec in September 2021, and to overtake oil by 2050. By comparison, Europe consumed 541 bcm of gas last year.

Beijing wants independent Ukraine

Putin is aware of this. That’s why he can take on Europe, even if the Chinese set him limits. Beijing wants Ukraine to remain independent. It should neither become Moscow’s vassal nor fall into the sphere of influence of the Americans. After all, Ukraine is one of the most important grain suppliers alongside the United States and provides Beijing with crucial defense equipment. Should Putin now ignore this wish – which is not yet clear – he would have isolated himself almost completely globally. (Frank Sieren / China.Table)

Von der Leyen: We want Ukraine in the EU

EU Commission chief Ursula von der Leyen has spoken out in favor of Ukraine joining the EU. Asked by a reporter from the Euronews channel on Sunday about the country’s admission to the community, she said, “So many topics where we work very closely together and indeed over time, they belong to us. They are one of us, and we want them in.“

On Saturday, Ukrainian President Volodymyr Zelenskiy had urged a decision. “It is a crucial moment to close the long-standing discussion once and for all and decide on Ukraine’s membership in the EU,” he wrote on Twitter. Ukraine has been working toward joining the union for some time. That goal has also been enshrined in the country’s constitution since 2019. dpa/fst

Power: Germany wants 100 percent renewables by 2035

The German government wants to fully supply Germany with electricity from renewable sources by the mid-2030s. “With many measures, we will achieve a 100 percent power supply with renewables as early as 2035,” Oliver Krischer, Parliamentary State Secretary in the Climate Ministry, announced via Twitter on Sunday evening. “This not only benefits climate protection but makes us independent of Putin’s gas, oil, and coal.” The corresponding amendment to the Renewable Energy Sources Act (EEG) is said to be ready. So far, it has been said that the energy sector should abandon fossil fuels well before 2040. By 2030, the share of renewables is to reach 80 percent.

The Climate Ministry had previously announced that by 2030, the capacity of onshore wind power would double to around 110 gigawatts, and solar power would more than triple to 200 gigawatts. According to the German newspaper Sueddeutsche Zeitung, these figures are also included in the new Renewable Energy Sources Act (EEG) key points. According to the newspaper, solar subsidy rates on private rooftops are to rise and – unlike at present – no longer fall sharply for new installations, even in the event of strong expansion. In addition, because of the high electricity rates, extra profits of operators of large new solar plants are to be siphoned off via so-called contracts for difference. This was also announced by State Secretary Patrick Graichen.

Due to the war in Ukraine, the government is also preparing for a complete stop of Russian supplies of gas or oil. For this reason, Economics Minister Robert Habeck does not completely rule out the continued operation of nuclear power plants beyond the planned end of this year, even if he considers it unlikely. The targeted date of 2030 for the phase-out of coal is also being called into question, given recent developments. rtr

EU Commission wants to sanction Russian propaganda media

Due to the Russian invasion of Ukraine, the EU Commission now intends to sanction the Russian propaganda media RT (formerly Russia Today) and Sputnik and its subsidiaries, which are aimed at a European audience. These “will no longer be able to spread their lies to justify Putin’s war,” according to Commission President Ursula von der Leyen. “We are developing tools to ban their toxic and harmful disinformation in Europe,” von der Leyen added.

It is unclear exactly which instruments von der Leyen might have been referring to. High Representative for Foreign Affairs Josep Borrell, who has so far not been considered an expert in the matter, said that the technical means were available to prevent the spread of the information. Meanwhile, in a video call with Google parent company Alphabet CEO Sundar Pichai and Alphabet subsidiary YouTube CEO Susan Wojcicki, European Commissioner for Internal Market Thierry Breton called on major tech companies to revise their terms of service to prohibit war propaganda. Alphabet’s official response was cautious: The company was monitoring the situation around the clock and could take action at any time.

The Digital Services Act, which is currently in the trilogue and defines responsibilities between players on the Internet, or a media freedom act, which is currently only in planning stages, would provide options for regulating the matter quickly. Other legislation, for example, to protect young people online, which is currently still in the planning stage, could also provide a basis for this. fst/rtr

EUROPE.TABLE EDITORS

Till
Hoppe

Charlotte
Wirth

Falk
Steiner

Timo
Landenberger

Corinna
Visser

Lukas
Knigge

Eric
Bonse

Sarah
Schaefer

Manuel
Berkel

Lisa-Martina
Klein

Markus
Grabitz

Stephan
Israel

Claire
Stam

Dear reader,

I hope you will still recognize the Federal Republic of Germany and Europe this morning. Politically, many things are different today; this weekend was a turning point, as Chancellor Olaf Scholz calls it. Everything is different, while the Russian army continues its attack on Ukraine with Belarusian support.

A look across Europe: The EU has approved €450 million in arms for Ukraine, and €50 million for other goods. Sweden, which tends to be neutral, has decided to supply weapons and armor to Ukraine. Finland is permitting the export of weapons through Estonia, and Germany is also clearing the way for exports – and is even supplying them itself.

As a result of the invasion of Ukraine by the Russian Federation, the German government, which has been in office for less than 100 days, has abandoned many positions that were previously considered unchangeable. This has also had an impact on Europe and the EU, with major changes now to be tackled with even greater speed. Reducing Europe’s and not the least Germany’s energy dependence is now a matter of acute geostrategic relevance.

In addition, Germany will be massively reinforcing its armed forces, and inventories at Europe’s manufacturers of all kinds of weapons systems are likely to empty rapidly when the German government announced €100 billion in special funds are to be spent in 2022 for this purpose. Germany is now pursuing a different, more active defense policy. Thomas Wiegold analyzes what this also means for European cooperation.

The weekend also brought a variety of European measures. Russian banks, which were included in the scope of restrictions late Friday night with the publication of the Official Journal of the EU, were hit with further sanctions on Sunday evening. The toughest sanction, for now, is likely to be the one against the Russian Central Bank. Eric Bonse explains why this is nevertheless not the “nuclear option”.

Many eyes are looking to China. Will Xi Jinping back would-be Russian savior Vladimir Putin? At any rate, Russia is not yet in a position to redirect European gas sales toward Beijing. But that is likely to change in the medium term, analyzes Frank Sieren.

Your
Falk Steiner

Decision on SWIFT exclusion serves German and US interests

By

Eric Bonse

It was still controversial on Friday, announced on Saturday, and decided on Sunday: The EU is excluding key Russian banks from the SWIFT international banking data system, drastically limiting the Russian central bank’s ability to support the economy. “We are taking away the central bank’s ability to use its assets internationally,” EU Commission President Ursula von der Leyen said in Brussels.

The surprising decision, which according to British financial expert Adam Tooze is equivalent to a “full-scale financial war”, was preceded by feverish negotiations. At the EU summit on Thursday, Germany, Italy, Hungary and several other EU countries had still spoken out against including SWIFT in the sanctions package. German Chancellor Olaf Scholz said that the agreed measures should be adhered to for the time being.

However, Germany came under pressure after Italy withdrew its concerns and the US, France, and Ukraine called for a further tightening of financial sanctions. The German government corrected its position and gave up its veto. The condition: That “the collateral damage” of a disconnection from SWIFT can be contained in such a way “that it hits the right people”. The energy sector and raw materials were to be spared.

After feverish negotiations, the EU Commission finally presented a compromise. According to it, the Brussels authority, France, Germany, Italy, the United Kingdom, Canada, and the United States have agreed “that selected Russian” banks will be excluded from SWIFT. This will “ensure that these banks are disconnected from the international financial system“, according to a joint statement released Saturday.

Details remain decisive

It also said it wants to “impose restrictive measures that will prevent the Russian Central Bank from deploying its international reserves in ways that undermine the impact of our sanctions”. Details are to be worked out next week by a transatlantic task force, the G7 said. This task force, which is expected to include Germany, is to ensure effective implementation of the financial sanctions.

The devil is in the details. Because exclusion from SWIFT is not enough, as political scientist Andreas Nölke made clear in an interview with Europe.Table. “The discussion about excluding Russia from Swift is misleading,” Nölke said. Swift is purely a payment information system, a kind of messenger service used by banks. To actually prevent payments, Russia would additionally have to be excluded from the correspondent banking system.

The US government has already announced this in the case of Sberbank. However, it has generally exempted transactions for energy deliveries from sanctions as long as they are processed through non-sanctioned non-US banks, the expert says. “This contradicts the purpose of strong sanctions,” Nölke says. Western governments wanted to demonstrate that they were doing something, but without creating too many problems for themselves.

Energy payment transactions still possible for the time being

Ultimately, it comes down to the list of affected banks and the financial transactions exempted from sanctions; so far, neither Gazprombank, Sberbank, nor VTB Bank have been affected. So the EU and the US have not yet pulled the dreaded “financial nuclear option”. They have, however, armed the fuse. Business with Gazprom and other energy and commodity producers operating in Russia will remain possible for the time being. This is not least in the interest of the USA, which has recently significantly expanded its oil imports.

Germany can also breathe a sigh of relief. Federal Minister of Finance Christian Lindner (FDP) had warned as recently as Thursday evening that there was “a high risk” that the Federal Republic “would no longer be supplied with gas or with raw materials”. This danger seems to have been averted for the time being. Nevertheless, Association of German Chambers of Industry and Commerce (DIHK) President Peter Adrian expects “noticeable repercussions” for the German economy. The consequences for the energy supply would have to be closely monitored.

This also applies with a view to the new punitive measures against the Russian central bank. They could also – at least indirectly – jeopardize the gas and oil supply in Europe and the USA. According to information from Brussels, currency reserves of $630 billion are at stake. This enormous “financial cushion” could be rendered largely worthless by Western sanctions. However, there are question marks here as well.

It is unclear, for example, how many reserves are held in dollars and euros – and where. The German Bundesbank will have to answer some awkward questions at its next press conference the day after tomorrow, according to British financial expert Tooze. That’s because substantial Russian deposits are suspected in Frankfurt. If they are frozen, this could trigger a hostile reaction in Moscow – up to and including a halt in gas supplies.

New defense policy: repositioning with open questions

German security and defense policy has been set on a completely new course within a few days, actually within a few hours. In the wake of Russian President Vladimir Putin’s attack on Ukraine, the still-new traffic light coalition of the SPD, the Greens, and the FDP has fundamentally overhauled Germany’s rather cautious stance on the military and defense since the end of the Cold War. And this is by no means just about money – even if Chancellor Olaf Scholz’s pledges are pretty much at odds with the line taken by former German Finance Minister Olaf Scholz in the previous grand coalition.

Of course, the chancellor’s surprising pledge to provide the Bundeswehr with a special fund of €100 billion for the next few years and also to increase the annual defense budget to more than two percent of gross domestic product is the most striking step toward the new security policy. Despite the huge sum, however, what is more decisive is what stands behind this financial effort as an intellectual turning point: The very suddenly discovered awareness that security policy and functioning armed forces are part of national services of general interest, like the provision of medical care, roads or electricity grids.

Germany’s European repositioning

However, the discernible rethinking also means a new positioning of Germany in Europe. Until now, the economically strongest country in the European Union had placed comparatively little value on deployable and assertive armed forces. This is in marked contrast to France and the United Kingdom, which is now outside the EU but still European. This was and is certainly due to German history. But the reference to this was increasingly understood by European neighbors as an excuse not to get too involved militarily. A Polish foreign minister confessed years ago that he was now more concerned about German armed forces being too weak than too strong.

This German attitude was reflected not only in the financing but above all in the structure and organization of the Bundeswehr. Since the 1990s, it had been transformed into an armed force for foreign missions, for so-called crisis management. Missions in Kosovo, then in Afghanistan, and then in Mali in West Africa characterized the formation. To this end, the Bundeswehr was, as its Inspector General Eberhard Zorn put it, “ready for action in a planned manner”: Contingents equipped and assembled for a task with a long lead time were the everyday business. The core task, defined in the Basic Law as “the Federation shall establish armed forces for defense”, was increasingly relegated to the background.

A change of course, cautiously, was admittedly initiated after the Russian annexation of Crimea. A “country/alliance defense working group” was even set up in the Ministry of Defense. The basic planned operational readiness changed only little: Even the troops for the so-called NATO spearhead, also provided by Germany at regular intervals, did not have all the required equipment at their disposal for the time being and had to borrow some of it from other units in the Bundeswehr.

Focus on high-tech projects – basic equipment neglected

In addition, when it comes to financing the Bundeswehr, the focus has been on large-scale high-tech projects: the joint FCAS air combat system with France and Spain, a replacement for the aging fleet of Tornado fighter jets, new helicopters. Very simple things, neither technically demanding nor difficult to procure, were pushed into the background. The military leadership estimates that it would cost between €10 and €20 billion just to increase ammunition stocks, which NATO requires for 30 days of combat.

With the change of course in defense policy, the coalition government seems to have resolved not only to refocus the Bundeswehr on its original mission – but also to actually equip it for it. Whether and how quickly this succeeds will depend not least on how much of the promised new money goes into replenishing the empty depots and not just into new major projects.

However, this will also require a rethink within the Bundeswehr itself. Last week, even before the Russian attack on Ukraine began, national armaments director Carsten Stawitzki had also ordered an internal change of course. Numerous vehicles and pieces of equipment deemed unfit for service in light of current – civilian – regulations were to be reevaluated: An off-road vehicle with a defective turn signal, for example, not roadworthy according to road traffic regulations, is perfectly suitable for military use – and thus ready for deployment. This attitude, the vice admiral demanded, must apply to all equipment of the troops in the future. (Thomas Wiegold)

China’s gas needs are Putin’s future

The meeting between Russian President Vladimir Putin and Chinese leader Xi Jinping at the opening of the Winter Olympics in Beijing had the demonstrative effect of a geopolitical closing of ranks. But it also had enormous energy policy significance. Putin and Xi signed an agreement on gas and oil supplies from Russia to China worth $117 billion.

What is almost more important: A new pipeline called Power of Siberia 2 is to be built for supplying gas. The pipeline is to originate in the Bovanenkovo and Kharasavey gas fields on the northern Siberian peninsula of Yamal, from where Europe is also supplied. It would be the first time that Europe and China would be supplied from the same gas fields. That changes the geopolitical landscape even before the pipe is built. Until now, China has been getting Russian gas through the Power of Siberia 1 pipeline, which originates in other gas fields.

However, the project is by no means new. Back in 2014, the Russian energy company Gazprom and China’s state-owned commodities group CNPC signed a framework agreement for the pipeline. But the project stagnated. There was no agreement on prices and infrastructure spending. But that has changed now. China’s hunger for gas has increased substantially since then, and the construction of the pipeline is becoming a reality.

The route has been changed on both sides for political reasons. Instead of crossing the Altai mountain range to Xinjiang, it will now run diagonally through Russia, past Siberia’s Lake Baikal, and through Mongolia, even though this is more expensive.

USA and Russia: politics of interests over raw materials

Russia holds the world’s largest gas reserves, is the largest gas exporter, and also has the eighth-largest oil reserves. Putin is gradually becoming less dependent on Europe as a result of the new commodity deals with China. As a result, Beijing – even though it explicitly rejects a war over Ukraine – has indirectly created the room for Putin to maneuver in Ukraine. The incipient invasion of Russian troops in eastern Ukraine caused the price of oil on the Asian stock exchanges to rise to more than $100 per barrel on Thursday for the first time in seven years.

The USA also wants to sell more of its oil and gas to Europe. After Russia, Qatar, and Iran, it holds the fourth-largest gas reserves. In terms of oil, they are still in eleventh place. The USA has once again become a major player in the gas business, mainly due to fracking, or shale gas, which is banned in Germany due to its environmental impact. Russia is its competitor.

Germany also does not yet have a single terminal that could handle shiploads of liquefied natural gas (LNG) from the USA or Qatar. Plans for LNG facilities in Stade and Brunsbuettel have been on the table for years, but they have not been implemented so far. Now, according to a German news report, the plans for the Stade plant are becoming more concrete. However, the approval process is likely to take at least a year.

Gas poker: weakened position of Germany and the EU

German Chancellor Olaf Scholz has developed a compromise to obtain both Russian and American gas. He wanted to subsidize the construction of LNG terminals with up to €1 billion in taxpayers’ money, provided the US gave up its opposition to the Nord Stream 2 Baltic Sea pipeline in return. However, due to the Russian invasion of Ukraine, Germany has since halted the licensing of Nord Stream 2 anyway.

Moreover, Scholz had underestimated the role of China. Beijing has made it possible for Putin to provoke the West with the agreed gas supplies to Russia. This destroyed Germany’s comfortable position of being able to decide where and how much gas to buy. Grotesquely, Beijing has thus indirectly helped Washington to assert its interests in Europe – and weakened the position of Germany and the EU in the process.

As early as 2021, the US sold more gas to the EU than Russia for the first time. While the EU has tried to build up a second mainstay with the US to reduce its dependence on Russia, Putin has just built up the second big customer China so as not to be too dependent on the Europeans.

China is forced to act

At present, however, the supply weight is still clearly leaning toward the EU. Moscow supplies 30 percent of its gas to Europe, but so far only seven percent to China. But China wants more Russian gas to reduce its dependence on gas supplies from geopolitical rivals (China.Table reported). Russian oil and gas supplies do not have to pass through third countries or international shipping lanes. Beijing can stomach the fact that the Power of Siberia 2 is to run through unproblematic Mongolia.

Another reason why gas demand is rising is that Beijing plans to switch as much of its power generation as possible from coal to gas to achieve its climate goals. Consulting firm McKinsey, therefore, expects China to consume twice as much gas in 2035 as it does at present. In 2040, gas consumption is even expected to rise to 620 bcm (billion cubic meters), according to plans by Chinese energy company Sinopec in September 2021, and to overtake oil by 2050. By comparison, Europe consumed 541 bcm of gas last year.

Beijing wants independent Ukraine

Putin is aware of this. That’s why he can take on Europe, even if the Chinese set him limits. Beijing wants Ukraine to remain independent. It should neither become Moscow’s vassal nor fall into the sphere of influence of the Americans. After all, Ukraine is one of the most important grain suppliers alongside the United States and provides Beijing with crucial defense equipment. Should Putin now ignore this wish – which is not yet clear – he would have isolated himself almost completely globally. (Frank Sieren / China.Table)

Von der Leyen: We want Ukraine in the EU

EU Commission chief Ursula von der Leyen has spoken out in favor of Ukraine joining the EU. Asked by a reporter from the Euronews channel on Sunday about the country’s admission to the community, she said, “So many topics where we work very closely together and indeed over time, they belong to us. They are one of us, and we want them in.“

On Saturday, Ukrainian President Volodymyr Zelenskiy had urged a decision. “It is a crucial moment to close the long-standing discussion once and for all and decide on Ukraine’s membership in the EU,” he wrote on Twitter. Ukraine has been working toward joining the union for some time. That goal has also been enshrined in the country’s constitution since 2019. dpa/fst

Power: Germany wants 100 percent renewables by 2035

The German government wants to fully supply Germany with electricity from renewable sources by the mid-2030s. “With many measures, we will achieve a 100 percent power supply with renewables as early as 2035,” Oliver Krischer, Parliamentary State Secretary in the Climate Ministry, announced via Twitter on Sunday evening. “This not only benefits climate protection but makes us independent of Putin’s gas, oil, and coal.” The corresponding amendment to the Renewable Energy Sources Act (EEG) is said to be ready. So far, it has been said that the energy sector should abandon fossil fuels well before 2040. By 2030, the share of renewables is to reach 80 percent.

The Climate Ministry had previously announced that by 2030, the capacity of onshore wind power would double to around 110 gigawatts, and solar power would more than triple to 200 gigawatts. According to the German newspaper Sueddeutsche Zeitung, these figures are also included in the new Renewable Energy Sources Act (EEG) key points. According to the newspaper, solar subsidy rates on private rooftops are to rise and – unlike at present – no longer fall sharply for new installations, even in the event of strong expansion. In addition, because of the high electricity rates, extra profits of operators of large new solar plants are to be siphoned off via so-called contracts for difference. This was also announced by State Secretary Patrick Graichen.

Due to the war in Ukraine, the government is also preparing for a complete stop of Russian supplies of gas or oil. For this reason, Economics Minister Robert Habeck does not completely rule out the continued operation of nuclear power plants beyond the planned end of this year, even if he considers it unlikely. The targeted date of 2030 for the phase-out of coal is also being called into question, given recent developments. rtr

EU Commission wants to sanction Russian propaganda media

Due to the Russian invasion of Ukraine, the EU Commission now intends to sanction the Russian propaganda media RT (formerly Russia Today) and Sputnik and its subsidiaries, which are aimed at a European audience. These “will no longer be able to spread their lies to justify Putin’s war,” according to Commission President Ursula von der Leyen. “We are developing tools to ban their toxic and harmful disinformation in Europe,” von der Leyen added.

It is unclear exactly which instruments von der Leyen might have been referring to. High Representative for Foreign Affairs Josep Borrell, who has so far not been considered an expert in the matter, said that the technical means were available to prevent the spread of the information. Meanwhile, in a video call with Google parent company Alphabet CEO Sundar Pichai and Alphabet subsidiary YouTube CEO Susan Wojcicki, European Commissioner for Internal Market Thierry Breton called on major tech companies to revise their terms of service to prohibit war propaganda. Alphabet’s official response was cautious: The company was monitoring the situation around the clock and could take action at any time.

The Digital Services Act, which is currently in the trilogue and defines responsibilities between players on the Internet, or a media freedom act, which is currently only in planning stages, would provide options for regulating the matter quickly. Other legislation, for example, to protect young people online, which is currently still in the planning stage, could also provide a basis for this. fst/rtr