Basil Kalymon: Nord Stream 2 and the Donbas
Truly one of the worst policy proposals that has emerged recently is a trade-off allowing the Nord Stream II pipeline to be completed in exchange for a Russian withdrawal from the Donbas.
This idea, surfaced in an April 13 op-ed by Colin Cleary, a retired U.S. State Department official, is reminiscent of the Barack Obama era “reset” policy with Russia which led to a dead end. The arguments in favor of such an approach are fully based on wishful thinking and ignore the reality of Russia’s motives and behavior. The proposal further fails to properly recognize the economics of the gas trade between Russia, Ukraine, and Europe.
First of all, the proposal of a trade-off makes the presumption that Russia would adhere to any agreement which it signs with regard to a withdrawal from Donbas or gas flows through the Ukrainian gas pipeline. Russia has flagrantly violated its past agreement guaranteeing the territorial integrity of Ukraine by its takeover and annexation of Crimea and continues a thinly veiled invasion of the Donbas. Repeatedly, agreements reached about ceasefires in Donbas have been violated. Russia has also used cut-offs of gas to Ukraine repeatedly as a strategic weapon. Any agreement to continue gas flows through Ukraine could easily be breached as gas flows to Europe could then be maintained through Nord Stream II.
Cleary recognizes that Putin’s behavior in poisoning Kremlin critic Alexei Navalny and the opposition by the environmental lobby has significantly weakened support for Nord Stream II in Germany and created conflict for Germany with the European Parliament, US, Poland, the Baltic States and Ukraine. Amazingly, the solution proposed is not to take advantage of these factors. Instead, Nord Stream II is to be permitted to proceed! Rather than the imposition of further sanctions and counter-measures, Russia is to be rewarded with the completion of the pipeline.
The Cleary analysis continues with a totally confusing assessment of the economic risks and purpose of Nord Stream II completion. It states that Nord Stream II has always been about diverting gas flows away from Ukraine and that the project has been acknowledged as being totally unnecessary by the European Commission. Strangely, after such admissions, the conclusion is to advocate for its completion. Poland and the Baltic countries may have taken some measures to protect gas supplies by LNG but they fully recognize that if Russian gas flows do not come through Ukraine, they will face higher gas costs as the pricing point would move to the German hub.
The Cleary assessment of the proposed transfer of the Donbas to Ukraine is revealing in its total disregard of Ukraine’s interests. Recognizing that the Donbas economy has been devastated and is now an economic burden to Russia, it blandly suggests that Ukraine should instead be saddled with this problem. Given that Russia is the primary cause for the destruction of industry in the Donbas, it should be required to pay war reparations and not simply allowed to exit. The financial burden of the agreement on Ukraine from the loss of gas transit revenue is also recognized but is to be simply mitigated by agreements that are likely to be unenforceable.
The disregard of Ukraine’s sovereignty and cynicism of the Cleary proposal on Donbas is further highlighted by the proposed mechanism of the Donbas transfer and the statement on the insertion of “a few million” presumably Russian sympathizers from the Donbas back into the Ukrainian political system. Voting in the Donbas is to occur under OSCE control as if the territory is not Ukraine and only subsequently to be transferred to Ukraine. No mention of any Russian or their proxy’s withdrawal from the territory indicating that elections are unlikely to be fair and open. At the same time, the massive migration of millions of Ukrainian citizens away from the Donbas to Ukrainian-controlled areas and their role in future voting is ignored.
In conclusion, it must be observed that the only interests which seem to be addressed in the article are those of Germany and Russia. The cynical commercial interests of Germany in supporting the construction of the Nord Stream II pipeline are to be rewarded by its completion. The aggression exhibited by Russia against Ukraine is also to be rewarded rather than sanctioned. Supposedly, all of this in the name of the US-German relationship. The result would simply place Europe under greater leverage by Russia and remove any protection that Ukraine had as a transit country for Russia’s crucial gas exports. The probability of further economic damage and aggression by Russia toward Ukraine would be enhanced.
Basil Kalymon is professor emeritus of Ivey Business School in London, Ontario, Canada.