Washington, Berlin and Moscow

Aug. 2017 Merkle:TrumpBy BARRY SHEPPARD

In regard to the charges about Trump‘s collusion with Russia to throw the election his way, and Russian meddling in the elections, we can mention that the list of the elections in all the countries Washington meddled in is far too long to for this post. In fact, the U.S. is the world’s meddler in chief.

Even the list of countries where the U.S. overthrew elected governments when such meddling didn’t go Washington’s way is lengthy.

Here I want to discuss one aspect that has come to light in this brouhaha: scratch this current Russian connection and we find the U.S.-Germany relation pops up.

The Senate recently adopted new sanctions against Russia supposedly as punishment for its “meddling” in the election. The vote was 97 to 2, indicating strong bipartisan support. A key aspect of the Senate bill reveals its real intent, which has nothing to do with the U.S. elections. It stipulates sanctions against a proposed new pipeline that would deliver natural gas to Germany under the Baltic Sea.

Germany is the target of this bill.

An article in the British magazine The Economist reported Germany’s reaction: “‘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 explained, “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 [$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.

“Germany’s government, especially the Social Democratic Party (SPD), the junior coalition partner, shares this view. (Gerhard Schroeder, a former SPD chancellor of Germany, chairs NS2’s board.)”

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 more cheaply. It would also be cheaper than liquefied natural gas produced in the U.S., which has to be liquefied and shipped across the Atlantic.

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

The House 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 in the U.S. know about the proposed sanctions on NS2, or the German reaction. I wouldn’t have become aware of it, except it was covered in the British Financial Times, which I subscribe to. I have seen no coverage in the major media on the pipeline sanctions or the German reaction in the major media (perhaps I missed it because it was buried.)

The Economist article began by noting, “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, to link up German industry with cheap Russian and Ukrainian raw materials and foodstuffs. The two World Wars that the U.S. fought against Germany were in part waged to stop such a link up.

Since the Second World War, Germany has rebuilt. In fact it now exports much more to the U.S. than the U.S. exports to Germany, especially capital goods. The economic conflicts between the two countries that led to those wars are reappearing, due to Germany’s increasing industrial dynamism combined with the dramatic industrial decline in the U.S. Germany’s competitive position was further strengthened by the destruction of the nationalized, 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 in the whole country, increasing capitalist Germany’s competitive position in the world and vis a vis the U.S. Germany feels strong enough to once again “drive to the east,” and the proposed pipeline is part of that.

How to deal with German competition has become a divisive point within the ruling class, reflected in the different approaches of Trump and the “establishment.”

Trump is saying that the continuation of economic competition with Germany requires powerful countermeasures at the level of the state against Germany. He is treating Germany as the main enemy in Europe, and Russia as much less of a threat as far as industrial competition is concerned since Russia is primarily exporting raw materials (oil and gas).

The “establishment” — which still dominates the media, the Pentagon, the CIA, Congress, the Democratic and Republican parties — thinks that economic “friction” with Germany can still be worked out within the current “world order” dominated by the U.S. since the last world war. 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 emphasized in recent issues.

Trump and his economic nationalist advisors like 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 U.S. and curtail its economy by preventing its “drive to the east” by imposing sanctions on both Russia and German firms seeking to build NS2, for example. Trump wants to ease sanctions on Russia and fight Germany directly. Perhaps the sanctions on the pipeline, a blow against Germany Trump supports, conflicts with Trump’s position to decrease sanctions on Russia, and he has yet to resolve the contradiction.

How all this will play out remains to be seen.

This article first appeared in the Australian on-line publication, Green Left Weekly.