Fallout From the Biden-Merkel Deal on Nord Stream 2

Back in 1989, a large group of Americans, composed mostly of Republican conservatives, went to Moscow to help Russians understand the “values of Western civilization.” The delegation included Sens. Phil Gramm of Texas and Bob Kasten of Wisconsin, Ambassadors Faith Whittlesey and Frank Shakespeare, journalists and even some exiled Soviet dissidents.

At that time, America was at the peak of its popularity in the USSR, with a 90% approval rating. The conference hall was packed, with many people left standing. Everyone listened attentively to each word enunciated by the visitors.

Besides discussions on freedom and democracy, the conference had an entire session dedicated to the advantages of free markets, in which honest and fair competition was supposed to provide consumers with the best quality product for the lowest price possible.

Two years later, the Soviet Union collapsed. An army of American advisers rushed into a country suddenly liberated from its communist yoke and absurd economic planning system to help Russia adopt the precious Western values discussed at that conference.

The results are well known. A summary can be found in the Jan. 1, 2000, Congressional Report commissioned by the speaker of the House titled “Russia’s Road to Corruption: How the Clinton Administration Exported Government Instead of Free Enterprise and Failed the Russian People.” It’s a long read, but the title sums it up nicely.

The New York Times Sunday Magazine wrote in August 1999 that “by allowing the oligarchs – in the name of free market – to grab Russia’s resources and siphon anything of value into their own offshore bank accounts, the United States poisoned Russia’s transition from communism. In the minds of ordinary Russians, capitalism became equated with theft.”

Fast-forward to today and the battle over a pipeline that has divided Washington and Berlin.

Germany needed more gas for its economy, and the best deal it could get was from Russia. As a result, a group of investors started to build the Nord Stream 2 gas pipeline linking Russian supplies to German buyers via a direct route under the Baltic Sea.

It was a classic example of what Mr. Gramm, Mr. Kasten and the rest of the U.S. delegation in 1989 preached to their naive Russian audience. Little did they know how a “real” free market works. This time, in a rare bipartisan chorus, Washington said, “No way.”

Germany, the US said, should either halt the pipeline and buy more expensive American-produced liquefied natural gas (LNG) or else face painful sanctions. Some investors got scared and ran away, but the Russians and Germans continued to build the pipeline, which is now 98% ready.

Faced with the inevitability of its completion, President Biden decided to make a deal with a threefold purpose: to keep Germany in Washington’s orbit, to threaten Russia with canceling the deal if Moscow misbehaves, whatever that means, and to throw some cookies to Ukraine, which is horrified by the threat of losing transit fees for Russian gas moving to Western markets through its existing pipelines.

The details of the deal are well known, so there is no point in repeating them here. It appeared that more pragmatic heads won the day when it became apparent that any further attempts to kill Nord Stream 2 would alienate an important ally in Germany and do more harm than good to America’s strategic objectives.

As was to be expected, the Ukrainians voiced feelings of anger and betrayal. The gnashing of teeth continued in the US as well, with the Biden administration facing bipartisan backlash to the deal.

Sen. Jeanne Shaheen, a New Hampshire Democrat who co-authored the sanctions regime, said she was “skeptical that [the agreement] will be sufficient when the key player at the table, Russia, refuses to play by the rules.”

Sen. Ted Cruz, Texas Republican, simultaneously attacked Mr. Putin and Mr. Biden for what he called a “generational geopolitical mistake” that would allow “Russian dictators decades from now [to reap] billions of dollars every year from Joe Biden’s gift.” Foreign Policy magazine named Mr. Cruz “Nominee-Obstructer-in-Chief” for holding up dozens of diplomatic appointments over the administration’s decision to waive key sanctions on the pipeline’s Western builders.

Arkansas Attorney General Leslie Rutledge argued that the Biden administration’s deal with Germany over the Russian pipeline “threatens America’s energy independence.”

In addition to money matters, many in Washington want to make sure Ukraine is not abandoned since they consider Kyiv an important anti-Russia strategic beachhead. Billions of US taxpayers’ dollars, military personnel and equipment have been poured into Ukraine exactly for this purpose. Moreover, in a supposedly “free market” strategic outlook, Washington wants Russia to pay for this policy with transit fees through the Ukrainian pipeline.

Looking at the vast economic devastation in Ukraine, coupled with rising radical nationalism and even an influential neo-Nazi movement, the current US policy in this part of the world looks more and more like its failed policy in Afghanistan. The US, under Zbigniew Brzezinski’s guidance, helped create the Taliban as a geopolitical tool to fight the Soviets, a tool that later came back to hammer its creator. In the case of Ukraine, however, the blowback could be much worse.

Ukrainian President Volodymyr Zelenskyy, who won election in Ukraine as a peacemaker, is coming to Washington. He will try to play a “wag the dog” game to drag America into a conflict with Russia, even if that risks starting World War III. Regrettably, he is likely to find plenty of enthusiastic supporters on both sides of the aisle. Perhaps for this reason, Mr. Biden invited Mr. Zelenskyy to visit the White House on Aug. 30, when Congress is not in session.

One shouldn’t be surprised if lawmakers return to Washington that day and even invite the Ukrainian leader to address a joint session of Congress, just as they did with his predecessor, Petro Poroshenko.

For Mr. Zelenskyy, a television star when he was elected president, it would be the best moment in his career as a comic actor who once made people laugh by telling off-color jokes. No doubt he is bringing a few good ones for this trip, but if things go his way, it wouldn’t be a laughing matter at all.

Edward Lozansky is president of the American University in Moscow. Reprinted from the Washington Times with permission from the author.