• Russia’s war in Ukraine has exposed the European Union’s (EU) inability to respond successfully to the greatest security challenge facing Europe since WWII.
• Russia’s aggression on Ukraine has significantly undermined the effectiveness of the Franco-German Axis as the “Engine” of Europe.
• Fundamentally different assessments of developments in international relations, and diverging national interests are two main factors for the absence of a unified EU policy on Russia.
• The two explosions emanating from the Nord Stream pipeline recorded on 27 September 2022, near Bornholm, Denmark are another reminder of the failure of the trade-driven approach towards Russia, led by the Franco-German partnership.

The seven-month-old war that started with Russia's invasion of Ukraine on 24 February, has exposed the failure of European countries, especially of key EU powers Germany and France, to effectively respond to the greatest challenge facing European security since the end of World War II.

Fundamental divergent views and narratives of Russia in Europe have led the EU, under the leadership of France and Germany, to prioritise commercial links with Moscow for decades, despite numerous risks and warnings. The lack of a unified approach and inaction from the EU bloc towards Russia has enabled Putin’s escalations throughout the years, and ultimately the aggression against Ukraine.

Russia’s War on Ukraine, the Wake-Up Call

Russia’s 2022 invasion of Ukraine seems to have woken up Germany and its European neighbours. Vladimir Putin has been weaponising energy supplies to Europe in response to EU sanctions, and European leaders have started to plan a future without Russian energy.

European governments are trying to diversify supply by buying more liquified natural gas (LNG) from countries such as Qatar and the United States (US), buying more pipeline gas from Norway and Azerbaijan, and introducing measures to reduce demand and save energy.

In the case of Germany, the government stopped importing Russian gas in August, and despite its unwillingness to support an EU gas embargo, Germany intends to end all Russian gas imports by the end of 2024. However, German and European reduction of Russian gas imports has not only been the result of efforts to diversify or to reduce consumption. Reports show that Russia has cut its gas supplies to EU states by 88% over the past year. As the level of the sanctions imposed by the EU escalated, Moscow began reducing gas supplies through Nord Stream 1. In June 2022, it cut deliveries through the pipeline by 75% - from 170m cubic metres of gas a day to roughly 40m cubic metres. In July, Russia shut the pipe down for 10 days, citing the need for maintenance, and when it reopened, the flow was halved to 20m cubic metres a day. In late August, Putin shut down Nord Stream 1 entirely, blaming problems with equipment. The pipeline has not been open since.

On 27 September, Norway and Denmark reported four leaks in both the Nord Stream 1 and Nord Stream 2 pipelines in the Baltic Sea, near the island of Bornholm. Seismologists say they detected explosions under the sea in the same area. The pipelines were filled with gas at the time, even though the gas was not flowing through them. European Commission head, Ursula von der Leyen, said that the pipelines were probably sabotaged, but both the EU and the US have not named Russia as the culprit.

As it stands, wholesale prices of gas in Europe have more than doubled over the past year and record-high prices of gas are affecting manufacturing firms, businesses, and household budgets across Europe. According to the International Energy Agency (IEA), Italian and German families in the EU are among the worst hit by surging gas prices. European governments are struggling to find ways of protecting consumers from rising energy bills.

At the European Cultural Heritage Summit on 27 September in Prague, EU leaders discussed whether capping gas prices would be a viable solution. Although most of the EU’s 27 countries agree on the cap on gas prices - many governments have already introduced national ceilings on the prices consumers pay for units of energy and disagree on the details of the cap. For example, tensions rose when Berlin announced its plan to spend up to 200 billion euros (£174bn) in subsidies to shield German consumers and businesses from soaring energy costs.

The measures taken so far have allowed Europe to refill storage facilities (the target is to have them 80% full by November). Current forecasts predict that the continent is likely to have enough power-generation fuel this winter unless a very cold winter strikes Europe; an unlikely scenario according to the European Centre for Medium-Range Weather Forecasts.

Beyond the impending winter, a big concern for Europe is whether it’ll be able to materialise a future without Russian energy soon enough. Another significant challenge for the EU bloc will be to admit that the Franco-German formula may be obsolete; if the warnings from other EU member states in Central and Eastern Europe on their experience with Russia had not been ignored or downplayed, the War in Ukraine and the Energy Crisis may have been averted.

Background

The Franco-German Axis - The Engine of Europe

Since the 1963 ‘Élysée Treaty’ between Charles De Gaulle and Konrad Adenauer, there has been significant bilateral cooperation between France and Germany and support for European Integration. The term “Franco-German Engine” refers to the “historic” intense Franco-German cooperation built upon the premise of actively promoting European integration. It is normally understood to reference France and Germany acting together as a leading partnership that successfully drives European stability and integration forward.

The partnership between France and Germany flourished in the following decades through the growing number of joint foreign policy initiatives between the two countries. This included the 1989 creation of the Franco-German Brigade - consisting of 5.000 soldiers from the two countries, based in Müllheim, Germany. In 1992, a French-German Corps Headquarters in Strasbourg was established, where both nations would share equally the command - the EUROCORPS was born. Shortly after, the French and German governments decided to open this headquarters to members of Western EU. Today, Paris and Berlin regularly hold bilateral consultations on topics such as foreign policy, security and defence, immigration, refugee policy, and counterterrorism.

Since the ‘60s, thanks to the Élysée Treaty, Franco-German cooperation was established - later becoming a driver for integration in Europe. Concurrently, EU integration and development have grown to be highly dependent on the consensus between Germany and France.

Russia Policy: Two Approaches

France

On the 56th anniversary of the Élysée Treaty, in January 2019, President Emmanuel Macron and former Chancellor Angela Merkel, signed a new Franco-German agreement, the Aachen Treaty, through which both nations committed themselves to deepen cooperation in foreign, security and EU policy.

However, the illicit attack on Ukraine has put into question the effectiveness of the alliance and highlighted the differing approaches of France and Germany and the EU.

From the beginning of his mandate in 2017, Macron has combined harsh criticism of Moscow with attempting to establish a relationship with Putin. Macron’s security and defence policy has been focused on finding new ways of preserving its autonomy in foreign and defence matters as well as filling the strategic vacuum created by the US, which has increasingly withdrawn from Europe and its periphery. For instance, Mali and Libya show France’s willingness to operate unilaterally in support of foreign policy objectives and in the pursuit of re-establishing its international influence and standing.

Despite the attacks he suffered in the run-up to the 2017 campaign - Russia was pointed as the culprit, as the MacronLeaks investigations later revealed – the French president decided to restore a direct dialogue with the Kremlin, hosting Putin at Versailles in May 2017.

In the summer of 2019, when Macron’s efforts to renew the debate on Europe’s “strategic autonomy” on the EU’s relations with the US did not achieve the results he anticipated, Macron decided to switch to a bilateral dialogue with Russia without waiting for the outcome of the French-hosted G7 summit taking place at the same time. In late 2019, Macron harshly criticised NATO - saying it was ‘experiencing brain death', to emphasise his frustration at the lack of strategic organisation and coordination.

In a speech in early 2020, the French president said that he believed there could be “no defence and security project for European citizens without a political vision seeking to promote gradual rebuilding of trust with Russia”. Franco-Russian bilateral dialogue materialised through regular contacts at both ministerial and much lower levels.

Macron’s unexpected solo initiatives towards Russia have irritated politicians and policymakers in Berlin - the French president failed to consult with Berlin and other EU capitals. There is also a fear that Macron will end up committing the same mistakes made by German policymakers in their previous approaches to Russia.

Germany

Unlike France, concerned with security, military and nuclear power, Germany has historically strongly focused on the business and energy spheres in its relationship with Russia. One of Berlin’s primary goals was to develop NATO and the EU as fundamental organisations within its foreign and security policy framework.

Berlin has often taken the lead within the EU on Russia, and for over a half-century Germany has pursued a cooperative change-through-trade approach to Russia. Since the late 1960s, Germany (then West Germany) had begun to take gradual foreign policy steps in its relationship with Russia (then the Soviet Union) which led to its natural gas reliance on Russia. At the time, the Social Democratic Party (SDP) had just come to power and believed that the best approach to European security lay in “building bridges”. This perspective became known as Neue Ostpolitik (New Eastern Policy).

The Neue Ostpolitik resulted in several agreements between West Germany and the Soviet Union in 1970, the largest of which saw an extension of the Transgas pipeline into Germany, in return for German steel pipes. At the time, this was the biggest trade deal ever concluded between the communist and non-communist blocs. After the end of the Cold War, the reunification of Germany, and the dissolution of the Soviet Union, Ostpolitik seemed to gain momentum to integrate Russia into a broader Europe. The policy also facilitated the greater penetration of German companies into Russia. It was thought that economic integration would, from a rational perspective, reduce the chance of future conflict.

Under Chancellor Gerhard Schröder, another Social Democrat, Germany strengthened its ties with Putin - Schröder pushed for the construction of Nord Stream, a major natural gas pipeline project, owned in its majority by Russia’s Gazprom, that would directly connect Russia to Germany. The Ostpolitik continued to resonate in Germany during Angela Merkel’s 2005-2021 tenure. With Berlin’s approval, the Nord Stream’s twin pipelines were laid down in 2011 and 2012. In 2012, Russia supplied roughly 37% of Germany’s total natural gas demand.

Even during the crisis in Crimea in 2014, Germany tried to avoid jeopardising the business interests that German companies had built in Russia, and focused on being a mediator, rather than a partisan in the conflict, maintaining continuous dialogue with the Kremlin through Merkel. After the annexation of Crimea, Germany’s gas import dependence on Russia – contrary to the EU’s 2010 and 2014 gas security strategy of greater diversification – rose from 45 to 55%.

How the Change-Through-Trade Approach led to Europe’s Dependence on Russian Energy

In 2021, Russia supplied around 40% of the EU's natural gas. Germany's delay in supporting Western sanctions through which the EU agreed to drastically reduce fossil fuel imports from Russia reflects how deep and long-standing the country's dependence on Russian energy is. Before the war in Ukraine, Germany acquired roughly 55% of its gas from Russia.

During Germany’s ‘Neue Ostpolitik’ policy, German imports of Soviet gas rose steadily throughout the 1970s. This was also driven by the Oil Crisis of the mid-1970s, which caused Germany to further move towards natural gas as a source of energy - supplied by the Soviet Union.

By the 1960s several US presidents were concerned by Europe’s growing dependency on Russia as an energy supplier. From 1970 to 1980, Soviet gas exports to western Europe had risen from 1 billion cubic metres (bcm) a year to 26.5bcm annually. In the 1980s, President Ronald Reagan repeatedly tried to convince Germany and other European countries to reduce the amount of Russian gas they imported after receiving a CIA assessment in 1981 that warned that the Urengoy gas project would accelerate Soviet economic growth and provide the Soviets with $8bn in hard currency, facilitating a further military build-up.

Reagan’s rhetoric was combined with sanctions - in 1982 Reagan tried to force European firms to stop working on the Urengoy pipeline by imposing secondary sanctions on them; however, these were futile and the new pipeline started pumping in January 1984. The US position on Russia was further weakened in Europe with the fall of the Berlin Wall in 1989 and advocates in Germany of the Ostpolitik and the “change-through-trade” approach felt vindicated. In 2001, Chancellor Schröder confidently promoted the idea of a strategic partnership with Russia, inviting the new Russian president, Vladimir Putin, to address the Bundestag.

In this favourable political climate, pro-Russian German lobbyists such as Klaus Mangold, chairman of the powerful German Committee on Eastern European Economic Relations, pursued the construction of a new €7.4bn gas pipeline - the Nord Stream 1. The contract was signed in Berlin by representatives of Russia’s state-owned Gazprom and German companies E.ON and BASF.

Nord Stream 1 was protested by the US and ex-Soviet nations such as Poland and Lithuania. The project was controversial as it bypassed Poland, Belarus, and Ukraine, denying them an additional source of income – but this was not enough to deter Germany. Neither Russia’s “peace enforcement operation” in Georgia in August 2008, nor the Russian disruption of the gas pipelines in a dispute with Ukraine in January 2009 derailed the project. In 2011 the Nord Stream finally opened and German total trade exports to Russia rose 34% to €27bn.

Following the 2014 invasion of Ukraine, Berlin claimed to be looking at options for how Germany could end its dangerous dependency on Russian energy. However on 4 September 2015, at the Vladivostok Economic Forum, an agreement was signed for the construction of the Nord Stream 2 gas pipeline on the Baltic seabed, which would vastly increase Germany’s reliance on Russian natural gas. Gazprom would also take over Germany’s gas storage business.