Europe’s Economic Woes: Russia Is Not the Problem

At the Russian Energy Week International Forum on Oct. 11, Vladimir Putin could hardly avoid ridiculizing the European Union’s energy policy – whether he wanted to or not. He reiterated that Moscow had proposed to immediately begin supplying Germany and other European countries with up to 27.5 billion cubic meters of natural gas annually, pumped through the undamaged pipeline of Nord Stream 2 (cf. SAS 42/23). Germany, however, has not taken up the offer, preferring to pay more to import LNG from the United States despite the ruin of its own economy.

“I believe that this is an economically foolish behavior”, Putin commented. “It’s like they are intentionally undermining the German economy. I just don’t understand why gas can be supplied to Germany through the territory of Ukraine, but they think it’s impossible to do via Nord Stream 2. Why can’t they offer Poland to open the Yamal-Europe [gas pipeline]? I just don’t understand it.”

During the course of his address, the Russian President further commented that “the modern political system in [the West] obviously sometimes brings not the smartest people to the top.”

Contrary to the policy imposed by Brussels, Putin also pointed out that Russia’s basic priority is to ensure “sufficient supply of fuel and energy resources within the country”, while improving the technologies used. In that context, the government has already informed the UN climate conference that it would not accept any call for the phasing out of any fossil fuel.

The issue of the EU model also came up at the Valdai Discussion Club on Oct. 5, when Vladimir Putin was asked about a new global monetary system being discussed by the BRICS and the use of national currencies in trade. A single BRICS currency is possible, he said, and “theoretically speaking”, it is probable. “But in order to begin working on this, we need to achieve a certain parity in the development of the economies of the member states, which is a very distant perspective.”

He then warned against the Euro model, in which national currencies in the 19 countries of the Eurozone disappeared in favor of a single currency: “As my colleagues told me, in the course of time, the Eurozone transitioned to the common currency, the euro, without thinking about how it would work in countries with a different level of economic development, and problems emerged. Why would we make the same mistake? This issue is not even on the agenda. But we should and we will work to improve the entire financial system, both global finance and financial relations within BRICS.”

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