Economy & Politics

The unfortunate alliance of German corporations with Putin

Capital columnist Bernd Ziesemer
Personal-Financial.com columnist Bernd ZiesemerMartin Kress

After the devious assassination attempt on Russian regime critic Alexei Navalny, there is only one sanction that would hit Vladimir Putin really hard: a temporary construction freeze on the Nord Stream 2 natural gas pipeline. And for the first time in many years, it is no longer entirely impossible that such a measure actually comes about. A majority in the Bundestag is in favor, across almost all parliamentary groups.

One of the remaining main arguments against the construction freeze is that the EU is economically shooting itself in the leg. Because the money for the gas pipeline does not come from the Russian monopoly Gazprom. A total of five corporations from Germany, Austria, the Netherlands and France share part of the great risk. In the case of the two German companies, DEA Wintershall and Uniper, it is almost 2 billion euros alone. Sanctions against Nord Stream 2 could force them to write off their investment.

Nord Stream 2 is a political project

The German private companies Uniper and GEA Wintershall as innocent victims of possible state sanctions – that is the corporation’s narrative. But it’s just not true. From the outset, Nord Stream 2 was not a “private sector” issue, as the two groups falsely claim. You just have to remember: In August 2016, the five companies had to officially say goodbye to the Nord Stream 2 project company. After an objection by the Polish competition authorities, the construction of the gas pipeline was about to be shut down.

But the five Western European corporations came up with a grandiose idea of ​​how to circumvent the judgment of the Poles: They officially withdrew as shareholders of the 50:50 joint venture with Gazprom, but in reality only converted their holdings one-to-one into loans . This money is now on fire at Uniper and DEA Wintershall when it comes to sanctions.

The whole story of Nord Stream 2 is a single story of an attempt to skillfully override the political resistance of many EU member states. The Chancellor herself admitted in April 2018 that the major project was by no means just about economic, but also political issues. That’s the way it is. If sanctions against Nord Stream 2 remain the only political option to stop Putin, then German corporations will have to bow to political primacy.

The German economy has to rethink its alliance with Putin

It is your own fault that you got into the current predicament. For years, against all common sense, parts of the German economy have been pursuing a kind of secondary foreign policy towards Russia. Former Chancellor Gerhard Schröder, who is Chairman of the Nord Stream Board of Directors in Switzerland, is the figurehead. And in the dispute over the project, the Eastern Committee of the German Economy could no longer be distinguished from a lobby for Putin.

It is time for the German economy to reconsider its unfortunate alliance with Putin’s Russian criminal regime. Schröder’s secret support from some corporations (and the silent admiration of many others for him) no longer fits in with the times. And if you still want to do high-risk business with Putin, you shouldn’t complain in the end if you end up with high losses.


Bernd Ziesemer is a capital columnist. The business journalist was editor-in-chief of the Handelsblatt from 2002 to 2010. Afterwards he was managing director of the corporate publishing division of the Hoffmann und Campe publishing house until 2014. Ziesemer’s column appears regularly on Personal-Financial.com. You can follow him on Twitter here.


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