Germany’s seizure of Russian refineries is far from enough
At least in the energy sector, it is clear that German Chancellor Olaf Scholtz is more aware of the danger posed by Russia.
The nationalization of three refineries owned by Russian oil company Rosneft is a major escalation in hostilities, but it came since a key energy law was amended last month that allows the government to put critical infrastructure under temporary trusteeship — and in extreme circumstances also carry out complete expropriation.
That means the federal energy regulator Bundesnetzagentur will take over Rosneft’s stakes in three German refineries – PCK in Schwedt, MiRo in Karlsruhe and Bayernoil in the Bavarian town of Vohburg – which account for about 12 percent of Germany’s total oil processing capacity.
The tragedy is that it took an energy price shock of the magnitude now sweeping Europe, affecting Germany more than most, to shake up its political elite.
Households and companies save energy voluntarily. But if Putin stops gas deliveries to Europe altogether, there will be serious doubts about the German economy’s ability to withstand the winter, even with forced rationing.
Goldman Sachs says Germany “didn’t have many options” and as a result could suffer a staggering 65 percent slump in industrial production if Putin turns off the taps completely, plunging the country into a deep recession.
Despite this clear and present danger, great doubts remain within the EU – and particularly in Central and Eastern Europe – as to whether Scholtz and his fragile coalition partners really recognize the threat posed by Russia even now. And if so, whether they have the will to attack the Kremlin head-on.
Protecting Germany’s own interests is one thing, but that doesn’t mean there’s an appetite to really take on Putin. Indeed, there has long been a suspicion that Germany’s commitment to Ukraine was only half-hearted. In tougher EU countries like Poland, there is growing concern that Berlin’s support will continue to dwindle as the gas crisis deepens in the cold winter months.
And while von der Leyen’s mea culpa might have been expected to shake up the EU, it instead has only the divisions between states in the east, which generally favor a tougher stance including more sanctions and more military and humanitarian aid, and those in the east further revealed West, including Germany, fixated on the political fallout from a protracted conflict.