On Wednesday evening, House and Senate negotiators agreed on a deal to send a new sanctions bill to President Trump’s desk.
As I explained last month, it’s a much overdue piece of legislation that will restrict Russian business interests. It will also prevent foreign businesses, such as those in Europe, from doing business with U.S. entities if they also do business with Russian energy companies. Finally, the legislation prevents Trump from waiving the sanctions (should he irrationally desire to do so). Trump, of course, isn’t happy about that, but the bill has veto-proof bipartisan support in the House and Senate.
Yet it’s not just Trump and the Russians who are upset.
The French government says the bill is illegal. The European Union says, “America first cannot mean that Europe’s interests come last.” Germany says the U.S. is acting unfairly.
Some might be surprised by this backlash. Europe, after all, is supposed to be skeptical of Russian President Vladimir Putin’s territorial ambitions. And the assumption should be that this legislative crackdown on Russian energy blackmail serves Europe’s long-term security.
Such an assessment, however, assumes European nations speak honestly when it comes to Russia and sanctions.
And they do not.
Ultimately, there’s a simple reason this legislation is unpopular with Europeans: it takes away the Europeans’ ability to have their cake and eat it.
For many years now, the European Union and its constituent member states have talked a big game about breaking their dependence on Russian energy imports. But they’ve done very little to actually enact that agenda. Indeed, the main Russian energy supplier, Gazprom, is seeing increasing sales to western Europe.
In large part, this failure is due to weak political resolve. E.U. countries want to spend their money on welfare programs, not on defense. As a consequence, Russia’s blackmail is more credible and less deterrable. But the failure to break Russia’s energy stranglehold is also a result of its earned influence. When I say earned, I mean “bought.” Consider that figures as senior as the former German Chancellor Gerhard Schroder have become rich working with Russian energy companies.
Still, keeping Russia happy is also good for business.
Put simply, European politicians do not want to risk the jobs and tax revenue that go with Russia-related business. As a result, officials happily limit their enforcement of existing sanctions agreements. That’s relevant because European businesses are already notorious for sidestepping sanctions regimes. When they know they won’t get in serious trouble for doing so, they do it even more.
It’s exactly for this reason the U.S. legislation is so important. Taking on European collaboration with Russia, the legislation does what hasn’t been done before. The Europeans know this and that’s why they are so upset. They know the economic relationships European banks and businesses hold with the U.S. are far more valuable than their deals with Russia. As such, those businesses will grudglingly abandon their Russian dealings.
Realpolitik has returned to Europe.
In turn, this legislation is a big challenge to Putin. If he loses his claws into Europe, his ability to consolidate his long-term energy hold over the continent will decline. As the Washington Examiner noted during President Trump’s recent trip to Warsaw, scuttling Nord Stream II should be a key U.S. foreign policy priority. The U.S. must also ensure that our energy exporters are able to supply the European market without delay.
Regardless, this is a good day for U.S. policy and Europe’s future security.
The French might call this budding law illegal, but I call it innovative statecraft.
