Making Space for Sanctions: The Economics of German Natural Gas Imports from Russia, 1982 and 2014 Compared

Abstract

This article explores the economic context behind Germany’s decision to impose sanctions on Russia in 2014 in response to the Ukraine crisis, through the lens of energy and natural gas. It does so by comparing 2014 with another moment in German-Russian relations when questions of energy, economics, sanctions, and transatlantic politics converged—the Yamal natural gas pipeline in 1982. Then, West Germany had little economic latitude to disrupt trade with Russia because of its high unemployment rate, its balance of payments problems, and the large investments major German corporations had made in Yamal. Consequently, Bonn broke with the United States over the question of sanctions. In 2014, by contrast, Germany’s strong economy, robust balance of payments, and the absence of a united business front opposing sanctions gave Berlin the space to pursue a non-economic agenda and support the United States in imposing sanctions. The article concludes that these cases illustrate how Germany should not be characterized as a “geo-economic power,” insofar as Berlin still has the space to prioritize goals such as the advancement of democracy and human rights over its need to promote exports and secure imports of raw materials.