Lord Hastings Lionel Ismay made a memorable quote in 1952 as the first Secretary General of NATO. “The purpose of the NATO alliance is "to keep the Russians out, the Americans in, and the Germans down.” By completing the Nord Stream pipelines Vladimir Putin has just reversed it as “The purpose of Nord Stream is “to keep Russia in, America out and Germany up”. What a coup de grace?
Geoeconomics is wired in the palm of Vladimir Putin. Along with the right business strategy he is willing to turn the table in major financial & investment transactions. One such brilliant manoeuvre was Nord Stream pipelines. The Nord Stream I was completed in April 2012 enabling 55 billion cubic metres (bcm) gas to be pumped from Russia to Germany. The Nord Stream 2 is about to be completed by September 2021 and after testing would be fully operational as New Year dawns in 2022. Both combined have total theoretical capacity of 110 bcm.
While Germany consumed gas about 88.7 bcm end 2019 it could rise much beyond 100 bcm by 2022. Therefore the entire demand by Germany alone would be met by Nord Stream alone. Excess, if any, would be pumped through European gas transit to countries bordering Germany. Evidently, Germany’s energy security as regards to gas supply is iron clad. Germany, therefore is finally up on the deal contrary to what Lord Ismay’s gist of argument. Besides, she can play a major role in gas distribution in Northern Europe which is susceptible for gas shortages especially in winter months.
Russia is in contrary to what Lord Ismay wished as the goal & objective of NATO, is finally in. (Read also) German Russian cooperation in Geoeconomics is the last thing NATO wanted in her backyard. Granted though it is, presence of Germany in any form of western alliance is vital in terms of power projection, nobody can bind her hands in progress & development which needs business strategy of obtaining uninterrupted supply of energy sources. Charting fairly independent course Germany needs binding commercial contracts with countries such as Russia to balance her relationship with others. Angela Merkel just delivered that to Germany.
Keeping America down is not intentional but incidental. After so much of efforts to scuttle the progress of Nord Stream, America came around to the saner position of accepting the fact that nothing further can be done to stop either Germany or Russia in their pursuit of cooperation in energy and other geoeconomics interest. Whatever the colour & content of incoming administration in Germany after elections scheduled for September this year, national interest remains as the over awning factor determining the future course of action. But the ego of the Americans need to be nursed. Bipartisan view of the Nord Stream in the U S Senate is extremely critical and Senators would not cease their opposition at any time soon. Providing political cloak is the best solution.
Both Merkel & Biden understood it well. A clause was added to their diplomatic understanding where Russia should be urged not to make Nord Stream as geoeconomics weapon. In any such eventuality both America and Germany acting in concert would impose necessary sanctions against Russia. Putin readily agreed that Nord Stream is purely commercial transaction and nothing more. His coup de grace follows the Sun Tzu dictum “The supreme art of war is to subdue the enemy without fighting”.
Cheers!
Muthu
Ashraff Rajulu
Business Strategist
Mobile: + 94 777 265677
E-mail: cosmicgems@gmail.com
Blog: Business Strategist
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