Germany’s Energy Policies and Strategic Preferences: An Analysis of Nord Stream 2

Abstract

Nord Stream 2 is arguably Germany’s and the EU’s most debated energy project. It seems puzzling why the German federal government firmly holds on to the project which has been heavily criticised on a national and international level. Using a mercantile realist oriented theoretical framework, this work illustrates that despite international resistance and legitimate criticism the project fits into Germany’s energy policies. It argues that Germany prioritises techno-economic strategic preferences in energy policies to strengthen the country’s international standing.

An in-depth analysis of Nord Stream 2 and underlying interest in the pipeline demonstrate that Germany expects to gain several economic and strategic advantages from the project that will increase the country’s political leverage. These can be assigned to three main motives: Ensuring the competitiveness of Germany’s industry; improving Germany’s position on the European gas market, by turning it into a gas transition country; and strengthening the economic ties with Russia avoiding a market shift towards Asia.

This thesis underlines that Germany addresses Nord Stream 2 with a commercial orientation and demonstrates how this promotes German energy policies. It concludes that techno-economic strategic preferences might improve Germany’s international reputation. However, it also shows that adverse effects can occur because partner countries and the wider international sphere are not sufficiently considered.

Nord Stream 2 is arguably Germany’s and the EU’s most debated energy project. It seems puzzling why the German federal government firmly holds on to the project which has been heavily criticised on a national and international level. Using a mercantile realist oriented theoretical framework, this work illustrates that despite international resistance and legitimate criticism the project fits into Germany’s energy policies. It argues that Germany prioritises techno-economic strategic preferences in energy policies to strengthen the country’s international standing.

An in-depth analysis of Nord Stream 2 and underlying interest in the pipeline demonstrate that Germany expects to gain several economic and strategic advantages from the project that will increase the country’s political leverage. These can be assigned to three main motives: Ensuring the competitiveness of Germany’s industry; improving Germany’s position on the European gas market, by turning it into a gas transition country; and strengthening the economic ties with Russia avoiding a market shift towards Asia.

This thesis underlines that Germany addresses Nord Stream 2 with a commercial orientation and demonstrates how this promotes German energy policies. It concludes that techno-economic strategic preferences might improve Germany’s international reputation. However, it also shows that adverse effects can occur because partner countries and the wider international sphere are not sufficiently considered.