Weekly Overview

Estimated Reading Time: 4 mins, 57 sec.

Now is the ideal time to kill Nord Stream 2

• Biden’s assertive entrance into the NS2 discussion with ‘‘it is a bad deal for Europe’’ was most welcome.

• It is a bad deal- not due to its commercial terms though.

• In fact, German consumers may benefit from a 5% price discount if NS2 becomes operational.

• It is still a bad deal because it increases Europe’s energy dependence on Russia.

• Gazprom is already responsible for meeting approximately 30% of Europe’s gas supplies.

• Recently operational Southern Gas Corridor, will of course start putting a dent into that share - it will however take too long.

• SGC’s impact will also be modest. LNG is not an adequate alternative either.

• Nevertheless, now is the ideal time to kill NS2.

• Here is why:

• 1) Navalny is a great face saving pretext for Germany to comply with American desires on NS2.

• Even back in September 2020, both German FM Heiko Maas and Merkel questioned the viability of this project in light of [then recent] Navalny poisoning incident.

• Now that Navalny is back in Russia and jailed, and no investigation [into the poisoning allegations] were carried out by Kremlin, Germany has a good pretext to withdraw without looking like it is simply submitting to American demands.

• 2) It is not just America - other European powers are putting pressure on Germany.

• In fact, European Parliament passed a resolution demanding an end to the NS2 project. With an overwhelming support as well - 581 European lawmakers voted for an end to NS2, when only 50 voted against the resolution.

• 3) Going forward, protests in Russia may dwindle. Navalny issue may take a back seat. European consensus around the issue may start to crack.

• 4) Iran will become a bigger priority on everyone’s radar.

• Especially when things may escalate closer to the June presidential elections in Iran.

• German support and European consensus will be needed.

• NS2, and any potential US - German disagreement will have to be shelved.

• 5) It is unclear how long before the project is completed.

• Line 1 expected completion date is in June 2021.

• But sanctions may delay them.

• By then, Germany may get Armin Laschet as a new Chancellor - someone who is not convinced that Kremlin poisoned Sergei Skripal in 2018 in UK.

• This guy may at best be described as passive on Russia.

• Convincing him to kill the project will be tougher.

• So Biden is right to tackle this issue right away.

• He must put more sanctions on the companies involved in this projet, and must court Germany with higher intensity.

• There may never be as good of a moment to stop this project.

US policy on Turkey must change

• The new Secretary of State, Antony Blinken is a suave intelligent diplomat - man is a class act

• He is also 100% right that when US is not engaged in the world affairs ‘‘one of two things is likely to happen: Either some other country tries to take our place, but not in a way that's likely to advance our interests and values, or maybe just as bad, no one does and then you have chaos. Either way, that does not serve the American people.”

• American leadership [as Mr Blinken himself confirms] must also involve resuscitating vital US alliances all across the world.

• This includes middle east.

• It was therefore disheartening to see that the Turkish Foreign Minister did not make top 20 FMs that Mr Blinken connected with after taking over at State Department.

• It does not make a whole lot of sense that the Thai FM would get a phone call from Mr Blinken before the Turkish FM.

• That cannot be by accident - medium is the message.

• Indeed, this message is consistent with Blinken calling Turkey a ‘‘so called strategic partner’’ in his Senate confirmation hearing.

• The new admin’s relationship with Turkey is off to a chilly start.

• In spite of:

• 1) Turkey reiterating its commitment to NATO - emphasizing how it is not merely an alternative to its relationship with Russia.

• 2) Turkey seeing [and declaring it loudly] its future in EU and not alongside Russia.

• 3) Offering to re-engage on S-400 issue, and to start a new working group to address the matter.

• 4) Turkey taking over the leadership over NATO’s Very High Readiness Joint Task Force (VJTF) in Europe with impressive injection of 4,200 troops.

• For context that is 40% more soldiers than what Poland supplied in 2020, and Germany is planning to provide only 2,700 troops in 2023.

• 5) Turkish rapprochement with Israel and renewed tension with Iran.

• 6) Turkey being a bulwark against the Russian domination of Syria and Libya.

• 7) Turkey starting a joint peacekeeping observation mission [with Russia] in Azerbaijan.

• From Jan 30, Turkish military advisers will be present in the Nagorno-Karabakh region of Azerbaijan.

• Their involvement is a crucial counter-balance to the Russian ‘‘peacekeepers’’ present in the region - that not only openly support their military allies, Armenia [thereby increasing the risk of another flare up/war] but also gain access to the Southern Gas Corridor [SGC].

• SGC is only a recent European success in reducing its dependency on Russian gas.

• What happens if NS2 gets fully completed and there is a new Karabakh war that gets manipulated by Russia to cut off SGC - and consequently increase its energy leverage over Europe?

• Did anyone at the DoS not think that the Turkish involvement in Karabakh may be extremely valuable in preventing such an eventuality?

• Turkey is a powerful NATO ally that is a Bulwark against Russia, and is important when dealing with Iran - snubbing it is not a good policy.

• US must remember that Israel and Turkey are the only long-term allies that America has in the middle east.

• Journalist butchering Saudis are and will always be convenient short-term partners only.

• Erdogan is an autocrat and has previously annoyed American foreign policy establishment - but in terms of geostrategic interests, America and Turkey are natural long-term allies.

• US policy on Turkey must therefore reflect that.

• To be clear, this does not mean a free pass.

• US must press Turkey to get in line on major geopolitical issues.

• Loyalty to the NATO institutions is not enough.

• For example, why is Erdogan’s government still quite on the issue of Uyghur persecution? Especially when even the Turkish public opinion demands a tougher approach on China [given that Uyghurs are ethnic Turkic people].

• But this tough love is qualitatively different from simply rebuffing a major NATO ally.

Biden admin holds the line on China

• China has been testing the new Biden admin on Taiwan.

• This was of course expected.

• Probing for weaknesses, China first started with air space violations over Taiwan.

• State Department responded promptly and decisively with its promise of a ‘‘rock - solid’’ commitment to Taiwan.

• China then escalated with ‘‘independence [for Taiwan] means war’’ rhetoric.

• Pentagon’s response was again spot on.

• Labelling Chinese comments as ‘‘unfortunate’’ was exactly the right move.

• Such an understated dismissal has a high value in what it implies - that American resolve is not shaken by loud Chinese ‘‘threats’’.

• Congress in turn, also did its part - The U.S.-China Economic and Security Review Commission (USCC) said that the United States should continue to view China as a threat.

• Displaying unity of intent is crucial - China should know that Congress will not limit Biden’s policy choices.

• China must be periodically reminded that it cannot rely on divide & conquer tactics when it comes to Congress / Biden relationship - that politics stops at the water’s edge.

Australia shows Merkel how to it’s done

• Last week’s cables criticized Merkel’s response to Xi Jinping’s Davos speech - that agreeing with the Chinese leader was lending an air of legitimacy to his insincere remarks.

• Australia’s Treasurer Josh Frydenberg on the other hand, pointed out the ‘‘disconnect’’ between Beijing’s rhetoric and its actual conduct.

• Australia is of course [rightly] angry about Chinese bans/restrictions on its commodities exports.

• It was deeply satisfying to see them rebut China - and in the process remind Merkel to stick to the correct messaging.

It’s easy to satisfy the Japanese PM

• To end on a lighter note:

• Japanese PM Yoshihide Suga said he and Biden agreed to strengthen bilateral ties in light of increasing Chinese belligerence.

• In the process, he could not stop himself from making some comical remarks:

• “We agreed to strengthen our alliance firmly by having more phone calls like this.”

• Putin is now thinking ‘‘if only I could make my girlfriends happy with more phone calls, I would not need to build a palace with exotic shisha bars and aqua discos.’’

• Alliances are of course strengthened by joint actions aimed at common objectives.

• If there were no future specifics planned [yet], Mr Suga could have said something with more weight…

• Perhaps something like this: “We agreed to strengthen our alliance firmly by moving forward with frequent coordinated actions.”