Greater Europe

BERLIN/ODESSA/PLOCK (Our own report) | | aserbaidschangeorgienkasachstanrussische-foederationukraine

BERLIN/ODESSA/PLOCK (Our own report) The Berlin government's talks with the Ukrainian President have ensured that Caspian oil reserves will flow towards Germany in greater quantities, while also bringing Ukraine closer to joining NATO. The German armaments and military equipment industry is hoping that the upgrading of military hardware in line with Western standards will bring it business valued in billions. Yesterday's talks were in part devoted to improving the capacity of several German oil refineries (Schwedt, Karlsruhe, Ingolstadt), with Kiev accepting the loss of millions in income in return for preferential supplier status - the very decision that Mr Stüdemann, the German ambassador in Kiev, had called for. By way of reciprocation, Germany has promised Ukraine special conditions when it, in due course, becomes subject to the EU. The economic and military agreements are in direct opposition to Moscow, and it is they that actually underlie the recent change of regime in Kiev.

Meeting yesterday with the representatives of German government and industry, President Yushchenko assured them that the blocking of Odessa, the Ukrainian Black Sea port, to further Russian oil supplies through the Bosphorus would not be overturned 1); instead, Odessa would be available as a hub for oil supplies to Poland via Germany. The western pipeline passes overland to the Ukrainian border at Brody and thence to Plock in Poland, where it links up to the existing pipelines to Germany. The oil refinery at Ingolstadt can expect an additional 3 million tonnes of crude oil via this route, while that at Karlsruhe will have an additional 1 million tonnes to process. The Osteuropa-Institut in Munich reports that the terminal at Wilhelmshaven in northern Germany will, as a result of Kiev's political gifts of resources, receive 19 million tonnes more than hitherto. 2)In return for this, the Ukrainian government accepts the loss of some USD 30 million in income per annum that it had previously received from Russian use of the port at Odessa and the connection point at Brody.

Strategic

The graciously-received decision by the visitor to Berlin had been preceded by German interventions over many years, with Ambassador Stüdemann calling, in newspaper articles, for Kiev to abandon its cooperation agreements with Russia or say good bye to rapprochement with the EU 3)- scarcely disguised ultimatums that speeded up the downfall of the Ukrainian politicians who sought accommodation with Moscow, and which Yushchenko took as instructions from Berlin. It was during a recent visit to Poland that he confirmed the deal on raw materials between Germany and the Ukraine, describing the block on Russian oil supplies in favour of the Western pipeline as being ,,strategically significant" 4), insofar as the pipeline across Poland to Germany would make Poland less dependent on resources from Russia and help to reduce Moscow's revenues from the transfer of energy.

Eurasian

This anti-Russian deal also involves Georgia, across whose territory oil is piped from Azerbaijan and Kazakhstan to Germany. At the end of February, the Georgian Prime Minister, whose predecessor's involvement in the oil business appears to have resulted in him being poisoned, agreed with his Ukrainian opposite number on a strategic direction towards the West 5)secured by military cooperation 6). In consequence, there now no obstacles left in the way of the Western European countries' plans for a ,,Euro-Asian Oil Transport Corridor"(EAOTC) with Ukraine as a transit country. The European Commission has declared the pipeline project to be a matter of pan-European interest. 7)Germany's Ministry of Economic Affairs and German energy companies are directly involved, thus enabling supplies from Russia to be reduced. 8)The Germans are particularly indebted to Anatoli Kinach, Ukraine's first Vice-Premier, for securing their energy interests. Mr Kinach is also president of the ,,Confederation of Ukrainian Industry"and chairman of the ,,Industrialists and Entrepreneurs Party", as well as of the ,,Ukrainian-German Forum", which has an offshoot in Germany.

Superfluous

Having concluded the energy pact between Germany and Ukraine, Berlin is endeavouring to persuade Kiev to buy billions of euros worth of new military technology. The additional capacity of German and American arms firms is being prepared in the ,,Ukraine-NATO-Commission", in which Kiev has to agree to ,,defence reforms"if it wants to continue on its course towards the West. 9)These reforms are reported to include the destruction of ,,superfluous munitions"(around 150.000 tonnes to date) as well as ,,1.5 million items of light and small arms", with the prospect of their being replaced by Rheinmetall or Lockheed Martin. Preliminary agreements having been reached between the German ambassador and the Vice-Prime Minister of Ukraine, representatives of the German armaments industry and of the oil and finance sectors are expected to visit Kiev shortly.

1) Centre for Eastern Studies: Odessa-Brody: the government's European choice; www.osw.waw.pl 12.02.2005
2) Manuela Troschke: Die Pipeline Odessa-Brody: Entscheidung für die strategische Leere, Osteuropa-Institut München. Kurzanalysen und Informationen Nr. 13, März 2004, www.lrz-muenchen.de
3) Ukrainian News Agency 23.09.2003
4) Neue Chance für Pipeline; Nachrichten für Außenhandel, Dow Jones-VWD 04.02.2005
5) Ukraine, Georgia agree to reverse oil flow; AP 28.02.2005
6) Ukraine and Georgia to engage in military-technical cooperation; www.ukrnow.com 07.03.2005
7) On the development of energy policy for the enlarged European Union, its neighbours and partner countries (COM(2003) 262 final); europa.eu.int 13.05.2003
8) Meeting 12.11.2003 in Berlin
9) Treffen der NATO-Ukraine-Kommission auf Ebene der Verteidigungsminister im NATO-Hauptquartier zu Brüssel am 13. Juni 2003; www.nato.int 13.06.2003