The cat is out of the bag. After months of denial, it is now conventional wisdom that Germany — and Europe more generally — faces deindustrialisation due to the end of cheap Russian piped gas. “Germany’s Days as an Industrial Superpower Are Coming to an End,” reads a headline on Bloomberg.
In Germany everyone is pointing fingers. The nation’s climate agenda is “more dogmatic than any other country I know,” Siegfried Russwurm, head of Germany’s main industry association, told the Financial Times. This talking point has started circulating widely in America and has spread to Europe via Right-wing commentators on social media. But it is a distraction — the Americans are becoming increasingly savvy at using culture-war issues to cover up negligence towards their European allies.
Really, the US told Germany and the rest of Europe that they would be able to substitute cheap Russian gas for American liquefied natural gas (LNG). While LNG would start out selling at a 40% premium to Russian piped gas, the Europeans were assured that costs would come down as investment in the sector increased.
This was always a fantasy. But to add insult to injury, in late January President Joe Biden paused new LNG export projects to appease green activists within the Democratic Party. If the Germans thought that foreign policy and support for core allies is more important to American politicians than frivolous party politics, they are now learning a hard lesson about how Washington operates.
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