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Nord Stream 2: What Sanctions Really Bring

2020-09-20T12:31:58.898Z


International punitive actions are considered ineffective and expensive, but are indispensable as a political tool. Germany should also consider this in the dispute over the Nord Stream 2 pipeline to Russia.


Icon: enlarge

The Russian laying ship Akademik Cherskiy is waiting in the port of Sassnitz on the island of Rügen for work on Nord Stream 2 to continue

Photo: ODD ANDERSEN / AFP

Europe is not squeamish.

The EU has imposed sanctions on a good 30 states.

The list ranges from A for Egypt to Z for Central African Republic.

It comprises a large number of measures: import and export restrictions, the freezing of foreign assets or arms embargoes.

Does that actually do anything?

This question is currently high on the political agenda.

It occupies German and European politics.

On

Monday

, the EU foreign and trade ministers meet on

Thursday

, leaders at a special summit.

It is about reactions to the poison attack on the Russian opposition politician Alexej Navalny, the situation in Belarus and Libya, the relationship with China, Turkey and the border dispute in the eastern Mediterranean.

Times are restless.

Imposing new sanctions is always an option.

At first glance, such measures are often quite ineffective.

Russia is making no move to reverse the annexation of Crimea.

The mullah regime in Iran is still in power, as is Kim Jong Un in North Korea and Bashar al-Assad in Syria - all countries against which Europe has imposed long lists of sanctions. 

When the goal is to get individual governments to change their behavior, it is often not achieved.

This does not only apply to EU sanctions.

Pressure makes you harder

According to calculations based on the new Global Sanctions Data Base (GSDB), only a small part of all sanctions imposed are successful.

Whatever the stated purposes of the punitive measures - strengthening democracy, destabilizing regimes, enforcing respect for human rights, curbing territorial conflicts - they have been more often missed than fulfilled in recent decades.

The German Minister of Economic Affairs Peter Altmaier (CDU) recently shared the same horn.

He was extremely skeptical about a possible shutdown of the Nord Stream 2 gas pipeline in response to the Russian attack on Navalny.

The East Prime Ministers also want to finish the project.

In fact, it has long been known that external pressure leads to hardening in the country affected by sanctions.

Although everyday life for the citizens may noticeably worsen, they rally around the respective leadership.

Government propaganda helps brand the injustice as the work of a foreign economic aggressor.

Nevertheless, the number of sanctions imposed is increasing at an explosive rate.

In the past decade and a half in particular, more and more financial and travel restrictions have been put into effect, the GSDB figures show.

And this trend is likely to continue in the face of "intense geopolitical rivalries", as Gabriel Felbermayr, President of the Kiel Institute for the World Economy and one of the initiators of the GSDB, and colleagues write - even if it is highly uncertain what economic consequences the respective measures actually have and whether they achieve their political goals.

So sanctions are nonsense? 

The people want to see action

Sanctions may have the stated aim of bringing about concrete changes in behavior.

In fact, other reasons are often in the foreground: It's about the signal effect - internally and externally.

Domestically, sanctions are a means of affirming one's own values.

It is not enough to castigate human rights violations or war crimes in vehemently worded resolutions.

As long as the words are not followed by concrete deeds, government policy is exposed to criticism for not being serious in the end.

This is one reason for the rapid increase in punitive measures: classic and social media have brought conflicts close to the citizens in sometimes gruesome images.

The emotional sympathy becomes more intense, as does the urge to want to do something, anything, and if it's just about setting an example.

Economic sanctions offer the opportunity to demonstrate willingness to act with finely tuned measures.

They are part of the foreign policy instruments: more radical than mere diplomatic protest notes, but less escalating than military actions.

The fact that the EU is one of the economic areas that impose sanctions particularly frequently is also due to the fact that Europe has hardly any other means of foreign policy.

The military threat potential is modest.

But as an economic power with the largest single market and the world's second most important currency, the EU is playing on a par with the USA and China - and can thus seriously affect many countries.

Outwardly, the signals are initially directed at the country in question. Russia did not evacuate the Crimean peninsula after the conquest in 2014, but the signal from the European sanctions was clear: So far and no further.

Without these measures, the Kremlin leadership might have considered further territorial adventures.

However, the message went far beyond Russia: border shifts in Europe should not become normal.

Anyone who breaks this taboo must expect painful consequences.

Had the EU not imposed sanctions on Russia, simmering border conflicts in the Balkans, Moldova or the Baltic States might have broken out.

Noble principles - real opportunities

International relations are fragile.

Within a constitutional state there is a monopoly of force that can enforce uniform law.

There is nothing like it at the intergovernmental level.

This raises difficult questions:

  • What are the real goals of international sanctions?

  • Is it perhaps more about protectionism, i.e. protecting domestic companies from potent foreign competitors, than the implementation of political goals?

    So do Western countries first and foremost assert legitimate security interests when they ban the Chinese network supplier Huawei, or do they want to promote more expensive domestic providers?

  • Are the costs that sanctioning countries would impose on themselves so high that they would prefer to refrain from foreign trade measures, even though they would actually be necessary in order to enforce international law?

    For example: If the EU should decide to sanction Turkey because of the border dispute in the Mediterranean, does Europe risk a new mass influx of refugees - with the potential consequence of domestic political destabilization in individual EU countries?

    Would the EU possibly shoot itself in the knee because Turkey would then turn to more competitive powers like Russia or China?

Complex considerations.

When in doubt, the real options, not noble principles, decide.

When ideal and real worlds collide

In an ideal world, there would be international law that would be uniformly enforced.

To this end, the large economies in particular would have to submit to such a system and undertake to jointly impose sanctions on states that violate this right.

Unfortunately the world is far from this ideal.

Occasionally the opposite happens: for example, the US recently imposed sanctions on the chief prosecutor of the International Criminal Court in The Hague because the court is investigating US security forces in Afghanistan.

And even where the West is still acting together, other great powers, especially China, are now ready to assist the affected countries - and thus to mitigate the effects of the sanctions.

All of this is not only morally problematic, but also very practically political.

Sanctions work best when they are reliably imposed.

Then they are most likely to have a deterrent effect.

States caught breaking the law will face punishment.

The credible threat of sanctions then replaces their actual imposition.

To do this, the sanctioning states must adhere to the rules themselves - and be prepared to bear the sanction costs they incur themselves.

In reality, the picture is more blurred, as can also be seen in the Nord Stream 2 case.

Should Germany get out of the project?

Beyond Rapallo

A current brief analysis by the Science and Politics Foundation (SWP) comes to the conclusion that the direct costs of an exit from Nord Stream 2 are "marginal".

The existing pipeline capacities for gas transport from Russia westwards were also sufficient for the future.

The macroeconomic costs of the sanctions would therefore be manageable;

For the companies involved, the bill would naturally look different.

Nevertheless, the SWP analysis warns against an exit.

Precisely because of the signal effects of such a step, which are "seismic".

Germany would take a fundamentally new course in terms of sanctions.

For the first time, trading or access to financial markets would not be affected, but an infrastructure project.

In addition, the reason and goal are unclear: the project started in 2015, i.e. after the annexation of Crimea.

Attacks on Russian dissidents have occurred before without Nord Stream 2 being affected.

Did the assassination attempt on Navalny create a substantially new situation?

On the other hand, an exit from Nord Stream 2 would also send signals to the European partners.

Many neighboring countries and the European Commission have always viewed the project extremely critically, namely as a German special deal with an aggressively acting eastern neighbor - which also undermines the common containment policy towards Vladimir Putin's Russia.

From this perspective, Nord Stream 2 is a kind of Rapallo treaty of the 21st century, similar to the German-Russian agreement of 1922.

If the federal government were to end the pipeline project, it could clear a fundamental point of conflict within Europe.

Unaffected by the controversial pipeline, Germany could press ahead with the European integration of foreign and security policy, with the reference to having made sacrifices for it itself.

Whatever the outcome: In case of doubt, real possibilities, not noble principles, decide.

Icon: The mirror

The main economic events of the week ahead

Monday Up Arrow Down Arrow

Berlin -

Realignment

- The EU trade ministers are discussing whether and how they should set the course in European trade policy.

Brussels -

Crisis Interventions

- Meeting of EU Foreign Ministers.

There are plenty of topics: Belarus, Libya, Putin, Trump, Erdogan ...

Tuesday Up Arrow Down Arrow

London -

Leave, but how?

- The British House of Commons votes on Prime Johnson's "Single Market Act", which undermines the key points agreed with the EU.

A hard Brexit at the end of the year without a subsequent trade agreement is therefore back on the agenda.

Wednesday Up Arrow Down Arrow

Nuremberg -

Consumption in Corona times

- GfK publishes its current study on consumer sentiment.

Thursday Up Arrow Down Arrow

Brussels -

New role

- Start of the EU special summit.

It is particularly about foreign policy issues, including relations with China and the dispute over the right to exploit natural gas reserves in the eastern Mediterranean between EU members Greece and Cyprus on the one hand and Turkey on the other.


Washington -

Bad - or worse?

- New figures on US unemployment benefit claims.

Friday Up Arrow Down Arrow

Berlin / Hamburg / Stockholm -

The children's demos

- The climate protests are back.

Fridays for Future are calling for a demo day again.

Saturday Up Arrow Down Arrow

Beijing - 

Drive now!

- Beijing International Auto Show opens. 

Source: spiegel

All business articles on 2020-09-20

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