Putin explains benefits of Russian energy supply to Merkel

A complete rundown of the news from Putin's German visit

Russian President V.V. Putin with German Chancellor Angela Merkel in Meseburg
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Putin spells out the benefits of gas supplies from Russia to Merkel
German Economic News [Deutsche Wirtschafts Nachrichten]
Russian President Putin campaigned for a close German-Russian partnership with Chancellor Merkel.

Chancellor Angela Merkel and Russian President Vladimir Putin met in Meseburg Saturday to discuss key issues of cooperation. Putin explained for Merkel the need for economic cooperation and in particular the benefits of German-Russian cooperation in the energy sector.

Putin emphasized the renewed economic contacts between the two countries. For example, trade relations grew by 22 percent last year, and sales of German companies in Russia rose by 25 percent this year. The EU has imposed sanctions on the country since 2014 in connection with the overthrow in Ukraine. Russia has responded with countermeasures that have hit Germany’s economy hard.

The new sanctions planned in the US could also hit the Nord Stream II project. US President Donald Trump wants to stop the project because the US wants to export LPG to Europe.

Putin recalled that “Germany is the largest buyer of Russian energy resources:” “In 2017, we supplied 53.8 billion cubic meters of gas, which covers more than 30 percent of the German market, while the consumption of Russian gas is steadily increasing and in this, Putin pointed out that Germany is not only a market for the supply of hydrocarbons from Russia, but also an important link for transit to other European countries. He recalled that in June, 50 years had passed since the beginning of gas supplies from the Soviet Union to Western Europe: “During this time, our country has reliably provided an uninterruptible power supply and is still making a significant contribution to the energy security of the entire European continent.”

In the dispute over the construction of the Nord Stream II pipeline, Putin tied the conditions demanded by Merkel for the further supply of gas through the Ukraine. “The main thing is that this transit through Ukraine meet the economic requirements,” he said. The construction of the controversial Baltic Sea pipeline is an “exclusively economic project.” Merkel reiterated her position: “From my point of view, even if Nordstream II exists, Ukraine has a role to play in gas transit to Europe.”

The background is the dispute over the construction of the pipeline by Russian and European companies under the leadership of the Russian gas company Gazprom. The US, Poland, and Ukraine are opposed. Above all, Ukraine fears the loss of its transit fees.

Whether Merkel will make a new orientation of the German Russia policy in the energy sector is not yet in sight. Merkel will travel to the former Soviet republics of Georgia, Armenia, and Azerbaijan next week. In particular, in Azerbaijan, there is, according to DPA [German Press Agency, Deutsche Presse-Agentur], an alternative for Europe, “to reduce the dependence on Russian gas.”

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The German economy had hoped from the meeting between Chancellor Angela Merkel and President Vladimir Putin “an entry into the exit” from the sanctions against Russia. Otherwise, the situation is exacerbated by new US sanctions against Russian companies and their foreign business partners, as the German-Russian Chamber of Foreign Trade (AHK) in Moscow announced on Friday.

The new US sanctions threatened “massive damage,” said AHK CEO Matthias Schepp. According to a survey of the chamber among German companies operating in Russia, 37 percent of member companies demanded an immediate end to Western economic restrictions against Russia. 57 percent are for a gradual reduction. Altogether, 94 percent demand an end to punitive measures.

Conflicts in Syria and Ukraine

Merkel and Putin want to coordinate more closely to resolve conflicts such as those in Syria and eastern Ukraine. “I think that even controversial issues can only be resolved in and through talking,” said Merkel on Saturday before consultations with Putin in Schloss Meseberg in Brandenburg. Merkel said that Germany and Russia have a responsibility in many dangerous conflicts. Russia has a special responsibility as a UN Security Council member.

Putin called on Europeans to participate in the reconstruction of the country. “It is very important to strengthen humanitarian support for Syria,” he said. In the first place, this is necessary in areas where refugees from abroad could return to their homeland. It is about the reconstruction of the water supply and plants often destroyed by the war. Putin said that about one million Syrian refugees in Jordan and 350,000 Syrians in Turkey are waiting for their return to Syria. According to Putin, the number of refugees who have come to Europe is significantly lower than the numbers of Jordan and Turkey.

Interesting: Merkel joined, as already in May in Sochi, the Russian years-long demand for a constitutional reform in Syria. So far, Merkel had considered such a reform possible only if the elected President Bashar al-Assad were ousted. Merkel did not talk about that anymore. The FT writes that Merkel must accept the idea that Assad will continue to play a role in Syria. Merkel said that the fighting is over in many parts of Syria. “But this does not create a regular peace.” Russia has long held the position that although a reform process is needed, other states are not allowed to overthrow a government in another country.

Merkel and Putin emphasized that a solution to the conflict in eastern Ukraine would be conceivable only on the basis of the Minsk peace agreement. Germany is still ready to take responsibility, said Merkel. “I am cautiously optimistic that there are opportunities for a peacekeeping mission of the UN,” said Foreign Minister Heiko Maas to the Die Welt Am Sonntag, “World on Sunday,” according to preliminary report with a view of Eastern Ukraine. At the same time he reiterated that an end to the sanctions against Russia could only be negotiated if the Minsk Agreement were to be implemented.

Prior to his visit to Germany, Putin had briefly been a guest at the wedding of Austrian Foreign Minister Karin Kneissl. On his journey from a wine bar to Graz Airport, Putin was accompanied by Austria’s Federal Chancellor Sebastian Kurz, who ruled jointly with the FPÖ. The Austrian OMV is part of the Nord Stream 2 project. The FPÖ is a partner party of Putin’s United Russia party.

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