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South Caucasus: assessing Chancellor Merkel's visit

30 August 2018 15:57 (UTC+04:00)
South Caucasus: assessing Chancellor Merkel's visit

By Trend

The South Caucasus is an important geo-strategic region for the EU and for Germany in particular. This is how local Caucasian media assessed the recent visit of German Chancellor Angela Merkel to the region.

Fairly, this applies, to a greater extent, to Azerbaijan and Georgia – the two countries that form the transport corridor between the Caspian and the Black sea. After the collapse of the Soviet Union, energy and transport links leading to Europe began to be laid through these two Caucasian countries. One day they also turned into a bridge between Europe and the markets of Central Asia and China, thanks to Baku-Tbilisi-Kars railway.

Germany never forgot about its national interests, but some recent developments such as the agreement with Russia on the construction of the Nord Stream-2 gas pipeline or, recent call of the German Foreign Minister Heiko Maas to create European payment systems independent of the U.S. in order to save the nuclear agreement with Iran, show that Berlin pursues an independent and far-sighted policy, as befits the leading nation of the EU.

Therefore, speaking about the goals of Merkel's visit to the Caucasus, we should first consider pragmatism and Germany's national interests. They are, first of all, of economic nature – it is shifting of production to Georgia and Armenia, and investing in promising, in terms of German capital, industries.

For example, delivery of large shipments of mainly second-hand German cars to the very popular Georgian car market in the city of Rustavi has long been established, where they are well-purchased by customers from Ukraine, Armenia, Azerbaijan and even transported by ferry to the countries of Central Asia.

If an assembly line of Mercedes models mostly popular in the region is opened in Georgia, then Germany would conquer one more large market for its car industry.

Azerbaijan, to a certain extent, stands apart, possessing assets Georgia and Armenia have never had, i.e. significant reserves of hydrocarbons, which means a certain financial advantage. This, in turn, broadens the boundaries of choice for Baku.

However, despite this fact, Azerbaijan also needs new technologies, modernization of the industrial base, new jobs and highly qualified specialists.

Quoting President Ilham Aliyev: "Of course, we have great oil and gas resources, we export them, but the main goal is to develop the non-oil sector, and in this area, companies from Germany, of course, can provide assistance for us.”

Ms. Merkel, assessing the existing bilateral relations between the two countries, noted that Azerbaijan is the largest and most important trading partner of Germany in the region, where more than 150 German enterprises operate.

Indeed, about 70 percent of Germany's trade with the countries of the South Caucasus falls on Azerbaijan.

Speaking about the visit of the German Chancellor to the region, we should not forget that Germany is part of the EU and aims to promote the interests of the whole Union. This is about the delivery of Caspian gas to the countries of South-Eastern Europe.

Gas in the framework of the Southern Gas Corridor (SGC) project should come from the Azerbaijani Shah Deniz 2 field to Europe in 2020, and all volumes have already been contracted. But there is also gas from Turkmenistan, a Central Asian country on the Eastern coast of the Caspian Sea with huge natural gas reserves.

We do not know for sure whether the connection of Turkmen gas to the SGC was discussed, but at a press-conference, answering the question of a German reporter, President Aliyev noted that the construction of the Trans-Caspian pipeline should be of interest to the gas owner in the first place, and that transit countries should not take the initiative.

“If in the Eastern part of the Caspian sea [Turkmenistan] the decision is made to supply gas to the world market through the territory of Azerbaijan, then of course, we can consider it with great interest and then make our decision. But this decision should not be ours, but that of the opposite side,” he said.

Maybe, Merkel is concerned about the uncertainty in the issue of further, after 2019, Russia's use of the gas transportation system of Ukraine for the delivery of Russian gas to consumers in Europe.

She would like transit through Ukraine to be preserved; otherwise a number of countries in South-Eastern Europe may suffer. And although President Putin at a meeting in Berlin in August assured Merkel that the transit via Ukraine will be maintained, Merkel wants to have a contingency plan at hand.

In any case, the German Chancellor had the opportunity to make sure that Azerbaijan and its partners in the SGC project are committed to their international obligations on the timing of the delivery of Azerbaijani gas to Europe.

However, the German approach suggests that before large investments are made in the South Caucasus, serious progress should be made to resolve long-standing regional conflicts.

“We openly talked about the Nagorno-Karabakh issue. I once again stressed that Germany is interested in resolving this conflict, and we will contribute to this within the framework of the Minsk group,” Angela Merkel said at a press conference.

But this visit seems to have a political background as well, and it is necessary to consider the historically established specific relations between Russia and Germany.

A week before her visit to the South Caucasus, Merkel had a meeting with Russian President Vladimir Putin. It is not excluded that the harmonization of positions regarding Germany's greater presence than ever in the region took place.

The American policy of creating a belt of instability on the borders of Russia is pushing the latter to divert attention from developing its own economy. Georgia is rushing to NATO; Armenia is looking to the West. And here it is – the West itself comes to the region with one of its brightest and most advanced representatives, offering investments and the world’s best technologies.

In the light of serious disagreements with the United States, and especially now, in the light of growing American sanctions, Russia would be quite satisfied to have a peaceful South Caucasus at its borders, without American influence, and remaining within the ambit of Russian national interests.

“So, we would rather see Mercedes cars riding across the South Caucasus than F-16 flying in its skies,” the officials in Moscow must have thought.

In this context, the interests of Germany and Russia coincide. Merkel was faster than others to see the futility of the policy that the West has been waging towards Russia, and proposed to revise the rules of the game, not forgetting about the interests of the German nation.


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