March 30, 2006

On Thursday, March 30, the former German Chancellor Gerhard Schroeder was officially elected the chairman of the new Russian-German company that will oversee the construction of North European Gas Pipeline. The controversial pipeline will take Russian gas directly to Germany under the Baltic Sea, bypassing such transit states as Ukraine, Poland and Lithuania.

Schroeder, who enjoys close ties with Russian President Vladimir Putin, was rumored to get this job as soon as he resigned from his position following parliamentary election loss in November 2005.

On Thursday, March 30, the shareholders of the North European Gas Pipeline Company, which include Russia’s natural gas monopoly Gazprom and Germany’s E.ON and BASF, gathered in Moscow to elect the supervisory council and its chairman. Gerhard Schroeder was voted into this position unanimously.

As MosNews reported, Schroeder has come under fire in Germany for establishing business ties with Russia soon after he was replaced by Angela Merkel last November. Leading German politicians from across the political spectrum criticized Schroeder for accepting the Gazprom job so soon after leaving office. This stance seems to be changing, however. Germany’s Foreign Minister Frank-Walter Steinmeier told Handelsblatt on Thursday, that in his opinion Schroeder would be useful to Germany in his new position as the chairman of the North European Gas Pipeline company.

“Would it be better if the chairman was representative of some other country? From a German point of view, this is a very useful appointment,” Steinmeier said. He refuted the suggestion that such appointment “would give a political flair to a commercial enterprise”. “Former federal chancellor always promoted this project on the condition that it would satisfy not only German, but also European interest in terms of gas deliveries,” the minister went on to say. He said that many of Germany’s western neighbors have already announced their interest in joining this project. “From today’s point of view, this plan is fully justified,” he said.

The 1,200 kilometer long pipeline will go from Russian town of Vyborg to Germany’s Baltic coast. It will bypass such transit countries as Ukraine and Poland, leaving them with no levers of political influence on Russia. The plan has already stirred the new members of the European Union, such as the Baltic states of Lithuania, Latvia and Estonia who proposed their own pipeline plan, called the Amber Pipeline. Poland has already called the pipeline a Russian-German conspiracy.

Germany Foreign Minister was asked whether construction of the pipeline and Western Europe’s dependence on Russian gas would bring about the confrontation of East European states with “old” members of the European Union. He said that in his opinion there will be no confrontation. “I don’t think there will be one,” Steinmeier said,“ not the least because the new member states don’t have a single opinion. Some of them made negative statements about Russia. But the final documents of the EU summit state that in the interests of foreign policy and security policy EU has to strive for effective dialogue with oil and gas producing countries,” the minister reminded.