Gazprom’s Force Majeure Claim Rattles Nerves in Germany

Yesterday’s declaration by state-owned Russian energy giant Gazprom that ‘unforeseeable circumstances’ could make it unable comply with European gas contracts is placing Germany in an even more precarious position. The prospect of Russia shutting down the flow of natural gas to Germany seems more probable. With Gazprom threatening to send less gas to Germany and other European nations, German firm Uniper, a major energy importer, has rejected the claim. According to a company spokesperson, Uniper rejects the force majeure claim put forward by Gazprom. Realistically, Uniper’s rejection does not change matters one way or another.

The Nord Stream 1 pipeline is scheduled to come off its 10-day maintenance period and resume operations on Thursday. It’s unclear if the pipeline will start operating at a reduced capacity, or at all. Despite Berlin claiming to have reduced its overall dependence on Russian gas from 55% to 35% it is still highly dependent on Nord Stream 1. The two other pipelines providing natural gas to Germany from Russia were closed off.

Many analysts still seem to agree that Nord Stream 1 will resume operations, albeit in a limited capacity, perhaps. However, Germany’s nightmare scenario of Putin halting gas deliveries entirely is haunting Berlin and Brussels. The nation is already falling behind efforts to top off its natural gas storage supplies before winter sets in. We discussed this in an earlier entry last week. Gas rationing and other conservation steps will have a detrimental effect on the German economy.  A number of companies are concerned such measures will force them to close permanently.

Germany is not the only target either. A dozen EU nations have seen their gas supplies from Russia either severely reduced or cut off entirely. The lack of a European-based energy sharing plan and the shortsighted thinking of EU leaders on the energy-security front are now coming home to roost.

Tuesday 21 November, 2017 Update: Angela Merkel and Germany’s Political Crisis

Exploratory talks for new German coalition government in Berlin

It has long been widely accepted across Europe, and the world for that matter, that the stability of the German government is guaranteed. In the past two days this presumption has evaporated. Contrary to the beliefs of millions in the EU and beyond, Germany’s government is not invulnerable to disorganized change. Although Angela Merkel and her party emerged as the winners in Germany’s latest round of federal elections, the victory was a pyrrhic one. Gains made by her Christian Democratic Union and Christian Social Union (CDU/CSU) were not enough to form a majority government. Merkel’s subsequent efforts to form a coalition have failed. Ruling as the minority party is not a viable option because of the instability it could bring. Therefore, new elections will probably be in the cards for Germany, and not until February at the earliest. Between now and the new elections, Germany’s current government will assume a caretaker status. The beacon of stability that Germany has been in times of political unrest could quite possibly be coming to an end.

The spectacle of Angela Merkel having to reach out to political parties of very different ideologies in order to form a coalition speaks volumes of the new political realities encroaching upon the Federal Republic of Germany. Merkel’s handling of the European Migrant Crisis, the liberal immigration policies she put into place for Germany, and the consequences of both have played a major role in creating the wave of populism that has swept across Europe. Most of Germany’s neighbors in Central Europe are now leaning right politically. The European Union has looked to Berlin for inspiration and leadership as the continent becomes increasingly polarized. More specifically, the EU has relied on Merkel for inspiration and leadership. But now, with Merkel weakened politically, and her days as chancellor perhaps numbered, Germany will not be playing an active role in the supranational body. The end result could very well be a paralyzed EU.

Since taking power in 2005 Angela Merkel has been Germany and vice versa. As Germany goes, so does Europe. They now face a future where this is no longer the case. Supporters of the EU must be horrified at the idea of losing the leader they considered to be their bulwark of democratic stability, and firewall against populism. In Germany, the realization is no less frightening. For a nation where in ordnung is a way of life, the notion of  political chaos is nothing short of a nightmare.


Authors note: I was planning to look at the Saudi Arabia and Iran confrontation in-depth over the Thanksgiving holiday weekend. However, I am going to shelve that for the moment and instead post a detailed entry about the German political crisis and what it means for Europe.