Gas, money laundering, and pizza: report details Russia’s economic meddling in Europe

The Nord Stream2 gas pipeline being plotted in Swedish territorial waters. Photo: NORD-STREAM2.COM 

Hybrid War

Article by: Anatolii Shara

It is quite natural that the COVID-19 pandemic is drawing all the attention because of its severe social and economic consequences for the European Union. However, significant international issues may slip the world’s attention during these turbulent times. Without a doubt, Europe will cope with the effects of the pandemic. Meanwhile, it faces another, no less important problem – Russia’s growing economic influence.

While open and liberal economies are very competitive, they are also quite vulnerable to the influences of autocratic regimes, such as Russia.

The Kremlin has been found meddling in the elections in Ukraine, the Baltic states, Great Britain, France, and even the United States. In Germany, one can easily recall “The Lisa Case.” Russia has been trying to gain popularity among Europeans through so-called cultural centers or NGOs. A telling example is the institute “Dialogue of Civilizations” established by Vladimir Yakunin (who is considered to be part of one of the closest circles around President Vladimir Putin).

Russian soft power activities are just the tip of the iceberg. Many analysts and politicians in Europe falsely consider that Moscow has no serious economic interests in the West. It is believed that only Russian oligarchs are buying real estate and yachts in the leading European capitals.

The report “Russian Economic Interference in Europe: Case Studies of Germany, Ukraine, Poland, Austria and The Czech Republic” demonstrates that the Kremlin’s arsenal of instruments of influence is far more extensive and economics-based.

The report shows that Russia is deeply rooted in the economies of Germany and Ukraine. Austria has become one of the most significant economic and political partners for Moscow. In addition to this, the Kremlin has specific interests in the Czech Republic. Regarding Poland, the influence of Russia is rather limited.

Predictably, the energy sector is the key industry for Moscow in the above-mentioned countries. The export of natural gas and oil is the major source of income for the Kremlin. Russia has been taking great pains to increase the total number of energy sales.

In April 2017, Nord Stream 2 AG signed an agreement on the financing of Nord Stream 2 with the companies ENGIE, OMV, Royal Dutch Shell, Uniper, and Wintershall. Gerhard Schröder is in the center of the photo. Source: gazprom.ru

Germany has become the largest consumer of Russian natural gas. Moscow has used political ties to accomplish this goal. The Kremlin has hired former German Chancellor Gerhard Schröder to promote its large-scale energy projects (like Nord Stream II).

The story of Schröder’s engagement could very well be out of John le Carre’s detective novels, as it contains many hidden details. Marius Laurinavičius, Senior Expert at Vilnius Institute for Policy Analysis, stated that the former Chancellor was a lawyer of Horst Mahler, one of the leaders of the Red Army Faction(RAF).

RAF was a radical leftist group named after the revolutionary armies of the USSR, China, and Cuba. RAF engaged in terrorist bombings and arson, especially businesses and military installations in West Germany. They also kidnapped and assassinated prominent political and business figures. It turned out that Mahler was a Stasi agent (East German secret police closely cooperating with the USSR’S KGB). In 1980, Schröder helped release him from prison on parole and to resume his activity as a lawyer.

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Putin’s ID found in Stasi archives

It gets more interesting further down the road. In December 2018, the European public sphere erupted with sensational news – Vladimir Putin’s Stasi spy ID pass was found in Germany.

The Stasi Records Agency (BStU) said that Mr. Putin “received the pass so that he could carry out his KGB work in cooperation with the Stasi.,

Notably, Russia’s President was stationed as a KGB agent in Dresden, Germany. Simply speaking, Putin had access to the Stasi’s headquarters in Dresden, most likely recruiting locals for his intelligence work. Coming back to Schröder, is it any wonder that under his ruling Russia started to become the biggest supplier of natural gas to Germany? In addition to this, the former Chancellor played into Putin’s hands by alleging that NATO must stop the Ukraine and Georgia accession game.

When it comes to Ukraine, its heavy dependency on natural gas from Russia gave the latter levers of influence over internal political processes in the country.

This became apparent in the winter of 2009 when the Kremlin cut off gas supplies to Ukraine. It forced the then-ruling pro-Western government to accept unfavorable Putin’s terms regarding higher gas prices. At the same time, it gave an impetus for Ukrainian pro-Russian politicians to demand the reorientation of foreign policy. As a result, Viktor Yanukovych won the presidential elections in 2010. The tragic outcomes of his presidency (Maidan, the annexation of Crimea, war at Donbas) are well-known to the whole world.

Money-laundering is another significant issue regarding the Kremlin’s spheres of influence in Europe.

Russian elites seek to legitimize their income through credible European financial institutions.

German and Austrian banks have been inalienable parts of the sophisticated schemes of transforming “dirty money” into legal assets. The scandals around Russia’s illegal activities have been shocking the countries, but this hasn’t reduced the scale of the fraud.

The Czech Republic is important, as well. This country is not a strategic trade partner for Russia, nevertheless, it plays the role of an entry point into the European Union. The Kremlin made Prague its hub for activities not only in the EU but also worldwide. The First Czech Russian Bank (owned by the Russian Roman Popov) provided the Front Nationale of Marine Le Pen with a loan of €9.5M for its French electoral campaign. This political party has been vocal in advocating for pro-Russian policies in France and Europe. Members of Front Nationale often visit occupied Crimea, the Russian proxy-states: the Donetsk and Luhansk People’s Republic, and support the Russian narratives about the nature of the war in Donbas.

Behind all of these, a remarkable fact is standing out. The Kremlin tried to diversify its ways of influencing Europe.

The launch of Dodo pizza, one of the largest Russian pizza chains, in Zaporizhzhia, was called off. The pizzeria was to be situated in this building. Photo: https://www.facebook.com/ovchinnikov.fedor/

First things first: Russia’s pizza chain “Dodo” attempted to enter the highly-competitive fast-food markets in Germany and Ukraine simultaneously. The founder of Dodo pizza Fedor Ovchinnikov has ties with Russian ultra-nationalists (Eduard Limonov’s National Bolshevik Party). There is no need to explain who controls nationalists in Russia and what goals they pursue. Furthermore, the economic prospects of such a business are close to zero. So such actions raise reasonable questions about the real intentions behind them.

Without substantial resistance, Russia may spread its aggressive behavioral pattern from Ukraine to other European countries. Russia’s economic weight in the EU and the neighboring countries, combined with its information influence, is a real danger to European security and unity.

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