Merkel’s policies left Germany too reliant on Russian gas, adviser admits

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Angela Merkel’s former chief economic adviser has acknowledged that her policies left Germany overly dependent on Russian gas, and in hindsight the country should have done much more to diversify its energy supply.

“If we’d known then what we know now, we would of course have acted differently,” Lars-Hendrik Röller told the Financial Times.

But he insisted that plentiful and cheap Russian energy exports had delivered a massive boost to the German economy, helping to ensure 10 consecutive years of growth.

“It helped to deliver us strong growth rates that paid for things we otherwise wouldn’t have had, for a period of 10-15 years, things which would otherwise not have been possible,” he said.

Röller also insisted that Merkel, who served as chancellor from 2005 to 2021, had little choice but to bet big on Russian gas after deciding to phase out nuclear energy. “You can argue whether that was the right thing to do, but it was the consensus in society at the time,” he said.

Opposition to fracking Germany’s domestic reserves of unconventional gas and to building import terminals for liquefied natural gas closed off potential alternatives to Russian hydrocarbons, which were in any case much cheaper than supplies from places like Qatar, he said.

Moscow had also proved to be a reliable energy partner over several decades with its gas flowing “all the way through the cold war”.

“But the result is that we did, in the end, become very dependent on Russian gas — that’s a fact,” he said.

Merkel has faced mounting criticism since leaving office for allowing Germany to become so reliant on Russian energy, even after it became obvious the Kremlin was prepared to use its oil and gas exports as a geopolitical weapon.

By the time Russia launched its full-scale invasion of Ukraine in February 2022, it accounted for 55 per cent of Germany’s gas imports.

Much of the criticism has focused on the former chancellor’s longtime support for Nord Stream 2, a pipeline under the Baltic Sea, which would have substantially increased the volume of gas flowing directly from Russia to Germany, bypassing Ukraine.

Critics say the project, which continued to be built even after Russia annexed Crimea in 2014, would have allowed Moscow to tighten its grip on European energy markets. The pipeline and its precursor Nord Stream 1 were damaged in explosions last year that are still being investigated.

Since the start of the war, Olaf Scholz’s government has weaned Germany off Russian gas, built several LNG terminals and moved to vastly expand renewable capacity.

In a now famous speech in the Bundestag last September, Robert Habeck, the Green economy minister, accused Merkel’s Christian Democratic Union of “16 years of failed energy policies” that the coalition had been forced to “clean up” in a matter of months.

But Röller said Merkel’s government would have struggled to build LNG infrastructure and diversify Germany’s energy supply “given the political context at the time”.

Röller served as Merkel‘s top economic aide for her last 11 years in power and since 2021 has been teaching economics at the ESMT, one of Germany’s leading business schools. In that role he has initiated a new international conference, Berlin Global Dialogue, which was held this week and which brings together political and business leaders from the west and developing economies.

Merkel’s critics also accuse her of failing to undertake essential reforms in areas such as digitalisation, where Germany still lags its European neighbours, and blame her for the country’s slow progress in building out wind and solar energy.

Röller admitted the government “didn’t expand renewable energy at the pace we should have done”, blaming excessive bureaucracy and ordinary citizens raising “too many objections” to projects. Scholz’s government has since moved to streamline approval processes for wind farms and solar panels.

He also dismissed the suggestion that Merkel’s relentless focus on balanced budgets meant Germany had failed to invest enough in the country’s poor infrastructure.

“The Scholz government is only able to pursue its current policies because of the strong economy we left it and the fiscal discipline of the last decade,” he said. “We managed the economy well in the past and created the space for the current government to make the necessary investments.”