Merkel Struggles to Wrap Up Unfinished Business With Putin

(Bloomberg) -- As the clock runs down on her 16-year chancellorship, Angela Merkel is racing for closure on disputes centering around her long-fraught relationship with Vladimir Putin.

Merkel isn’t running for re-election, and her successor will be chosen in the national election on Sept. 26. As she prepares to depart, her conservative bloc is rapidly losing favor. 

In back-to-back farewell trips to Moscow and Kyiv, the German leader reinforced a pledge for European energy security despite her support for the Nord Stream 2 pipeline -- and lamented the bogged-down Minsk accord, a process she’s spearheaded but one that’s failed to dial back a conflict between Ukraine and Russian-backed separatists. 

“One has to say honestly that we haven’t made progress to the point that we wanted,” Merkel said of the conflict on Ukraine’s eastern border during while in Kyiv on Sunday. “This is a difficult situation -- and it won’t become any easier for a new government.” 

Merkel took the lead in forging the Minsk accord to secure peace in Ukraine’s Donbas region, only to watch the process grind to a halt as the warring factions fought on.  

On Nord Stream 2, she’s accused of handing Russia’s president significant leverage on European energy policy and damaging Ukrainian interests with her support for the project -- creating an intractable geopolitical conundrum. 

That incomplete legacy in Russia and Ukraine may come to haunt Europe’s longest-serving leader, who has little to show for spending a vast amount of political capital on the region. Her efforts have also been shadowed by Putin, who’s governed Russia for the duration of her tenure since 2005. 

East Germany

A self-professed Russophile who grew up in communist East Germany, Merkel’s been a central interlocutor on the global stage with Putin, who spent the final years of the Soviet Union as a KGB officer in the East German city of Dresden. 

Merkel’s view of Putin darkened after Russia’s 2014 seizure of Crimea from Ukraine, an act the chancellor has repeatedly condemned as a violation of international law. 

Her visit to Moscow on Friday put the two leaders’ uneasy bond on full display. Putin, brandishing a bouquet of flowers, called Merkel “one of the most illuminating figures on the international stage,” and insisted that she would be welcome in Russia any time in her retirement. 

But the cordiality ended abruptly. Merkel laced into Putin for the “unacceptable” conviction and imprisonment of Russian opposition leader Alexey Navalny -- and called for the dissident’s release, on the anniversary of his poisoning by Russia. 

Putin, unfazed by Merkel’s entreaties to extend a gas-transit accord with Ukraine, said that prolonging the contract -- an economic lifeline to Ukraine -- would depend on European demand, which may taper off given the region’s green ambitions.   

“This is an obvious thing: we can’t sign a transit contract if we don’t have contracts to supply our consumers in Europe,” said Putin, standing alongside Merkel. “Taking into account the green agenda, which is already being implemented in Europe, we have a question: will they buy gas from us at all, and how much?” 

Contentious Pipeline

Merkel, the pressure on her mounting, doubled down on a commitment to push for fresh sanctions if Putin uses Nord Stream 2 as a “weapon,” by halting exports through Ukraine, potentially crippling its economy, as it pumps gas under the Baltic Sea straight to Germany. Yet as she prepares to depart, her leverage is waning. 

The nearly complete Nord Stream 2 project, which will double the volume of Russian gas flowing directly to Germany’s Baltic coast, has been at the center of Merkel’s tumultuous relationship with Putin. In her final weeks as leader, the project remains controversial. 

The endgame dynamic has created a race against time to secure an extension of the transit contract beyond 2024 -- the success for which, as always, rests with Putin. 

“The faster this can happen, the better,” Merkel said in Kyiv. She dispatched her Economy Minister, Peter Altmaier, to take up talks there Monday. 

Merkel will become a caretaker chancellor after Sept. 26, staying on for weeks or perhaps months as parties haggle over a new coalition under her successor. 

The 67-year-old is using the time to make a series of farewell visits to tidy up unfinished business. She met with President Joe Biden in Washington on July 15. At the end of the month, she flies to Israel. 

But the relationship with Russia holds a special place for Merkel, who’s reported to have kept a portrait of Catherine the Great, the German-born 18th-century Russian empress, on her desk in the Chancellery. Standing beside Putin last week, she lamented the widening gap between two nations that share a rich history, even as she reiterated her insistence on talks. 

“During my time, the political systems of Germany and Russia have moved further away from each other,” Merkel said at the Kremlin. “But I’m very pleased that despite big differences, we’ve always managed to keep this channel for talks open.”

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