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Sanctioning A NATO Ally

Chancellor of Germany, Angela Merkel, and President of Russia, Vladimir Putin, at the 2018 Paris Peace Forum
German Chancellor Angela Merkel and Russian President Vladimir Putin in 2018.
Photo courtesy the Kremlin (www.kremlin.ru).

German leaders and their Continental sidekicks are outraged by fresh American sanctions against a controversial gas pipeline. They have a point: As sovereign nations and NATO allies, they have a right to determine their own fate.

But not if that means American service members have to protect them from the consequences of their own bad choices.

We are going to hear a lot about V-E Day as we move deeper into 2020. May 8 will mark the 75th anniversary of the end of World War II in Europe and the 12-year nightmare of Adolf Hitler’s Thousand-Year Reich. Today’s Germany would not exist but for the Western Allies who restored the Federal Republic of Germany (aka West Germany) to constitutional democracy and sovereignty in 1949, and then protected it from Soviet aggression for four more decades until the fall of communism and reunification with East Germany (the German Democratic Republic, which was never democratic in anything other than name).

Under a basing agreement dating back to 1954, more than 30,000 U.S. troops and a large number of American and local support personnel remain in Germany as the core of NATO’s European presence today. This is a much smaller number than during the Cold War. Still, it represents a vital American military umbrella beneath which Germany and most other European Union nations do business with Vladimir Putin’s kleptocracy. Except for the United Kingdom (which is on its way out of the EU), Greece (which faced down a communist takeover after World War II), Poland and the former Soviet Baltic republics, all of those countries shirk their NATO defense funding commitment of 2% of gross domestic product.

Germany and its EU buddies stood by when Yugoslavia disintegrated into war and ethnic cleansing on their doorstep. It was American warplanes that finally put an end to the atrocities in Bosnia-Herzegovina in the 1990s. Apart from talk, the Europeans have also mainly stood by as Putin seized Crimea from Ukraine and fomented civil war in that country’s east.

All the while, work has continued on the Nord Stream 2 gas pipeline. Once complete, the pipeline will increase the continent’s reliance on Russian gas while bypassing the Ukrainians, who desperately need the gas supplies and transit fees they receive from existing routes. While the Russians and the Ukrainians recently struck a new five-year agreement covering the current pipelines, Kyiv still remains vulnerable to a turn of the spigot in Moscow. For now, Moscow is constrained by its own need to sell gas to Germany and its neighbors. Nord Stream 2 will give Putin and his successors more flexibility to turn the screws on the Ukrainians – even as Germany, the pipeline’s destination, becomes more reliant on the Russians for its own needs.

Last month, Putin announced an initial deployment of new hypersonic nuclear missiles, designed to fly at 27 times the speed of sound and avoid U.S. defenses to threaten our cities and land-based ballistic missiles. While not a strategic game-changer, largely thanks to our nuclear bomber and submarine fleet, these missiles do pose a new military threat – and they will be paid for, in part, by Russian energy sales to our European allies.

This is the historical and modern backdrop against which Congress recently enacted sanctions against Nord Stream 2 and any Western companies that cooperate in building it. The move brought quick results; work has at least temporarily been halted on the pipeline, which was due to open later this year.

Parroting Russian nonsense, some German politicians (often unnamed in press reports) and their nongovernmental water carriers allege that the sanctions are designed largely to protect a market for American liquefied natural gas. Economist Claudia Kemfert went as far as suggesting that the EU should institute “climate tariffs” against the United States in response to the Nord Stream 2 sanctions. But these accusations are exactly backwards. The U.S. has opposed European reliance on Russian gas since long before we had enough fuel of our own to consider exporting. Now we are the allied country that offers a safe, reliable alternative to the Russians, against whom our military is protecting the Germans as they instead try to purchase decent Russian behavior with their euros.

Frankly, it is their right to do so, or at least to try. As German Finance Minister Olaf Scholz observed, “It is up to the companies involved in the construction of the pipeline to take the next decisions.” But Germany’s strategy calls into question the broader purpose of NATO in the third decade of the 21st century. If the Europeans want to cozy up to Putin and his cronies – if they believe this is the best way to secure their own future – at some point we should acknowledge that this is their sovereign prerogative. Many Americans see a lot of problems with this approach, but they are America’s problems only if we choose to make them so.

Millennials may not know the term “Finlandization.” It was used during the Cold War to describe the Soviet neighbor that was internally democratic, but which dared not join NATO or otherwise become too annoying to the behemoth next door. American objections to Nord Stream 2 are, essentially, a warning against the Finlandization of Western Europe. But we can’t protect the Europeans from the consequences if this is the course they choose.

Our overriding military interest in Europe is not the defense of Berlin, or Paris, or Madrid, desirable as those goals may be. It is the defense of an open Atlantic – a goal that we can secure with the cooperation of Britain (and its base on Gibraltar), Norway and Canada. We can manage without the rest of Europe if necessary, although participation by other Nordic countries would be very helpful.

If NATO is to be reimagined, there will be a difficult choice to make about Poland and the Baltic states. Rebasing U.S. troops to the east will upset the Russians, even as it indirectly benefits the countries farther west, including Germany. But bases in the eastern Baltic, and in Greece, will help keep Russian naval forces in check should it become necessary. We should also try to continue to support Greece. With an increasingly unreliable Turkey flirting with Putin nearby – and potentially subject to its own U.S. sanctions for doing so – the Greek role in NATO will become more important even as Germany’s utility wanes.

I expect 2020 will be a year of considerable reflection about Europe’s 20th century history and its 21st century orientation. Sanctioning a German project is a pretty unfriendly thing to do to a close ally. But then again, the Germans are behaving less like friends and allies, so maybe it’s time to rethink this relationship.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book, Looking Ahead: Life, Family, Wealth and Business After 55. His contributions include Chapter 1, “Looking Ahead When Youth Is Behind Us,” and Chapter 4, “The Family Business.” Larry was also among the authors of the firm’s book The High Achiever’s Guide To Wealth.

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