Threatening letters from the USA were pouring in and the Franco-German friendship was heading towards a fresh crisis. The discussion about the German-Russian gas pipeline Nord Stream 2, in which companies from Austria, the Netherlands, Great Britain and France are also involved, demanded the Europe-wide high art of diplomacy.

When US Ambassador toGermany Richard Grenell, in a January letter to several German companies involved in the construction of the gas pipeline, threatened that their involvement “could entail a considerable sanction risk”, it was clear that at least diplomatic relationsbetween Germany and the US were at stake. But the controversial project, a quarter of whose line pipes have already been laid, did not only provoke criticism overseas. Some EU members also see the second gas pipeline, which runs from Russia through the Baltic Sea to Germany, as a threat to European security and energy independence. Ukraine also feared losses in their current ten-digit transit revenues.

The diplomats in Berlin, Brussels, and the Baltic States have been working continuously to reach a compromise so everybody could save face while not letting the project, whose expenses already reach the USD 10 billion threshold, fail. The effort seems to be successful for the time being. Let’s take a look at the diplomatic devices employed:

Constructive solutions instead of conflictual challenge

A fiasco was looming. Although France has been involved in the pipeline with a domestic company, Paris has advocated an amendment to the EU Gas Directive, which would regulate the pipeline more stringently in the future. Even those who promote and sell gas as a third country should not be able to operate the pipeline at the same time – this has been precisely the case with the Russian group Gazprom, initiator of the project. With the Paris’ approval of stricter legislation, there is now a majority in favor of the corresponding policy change with subsequent significant economic consequences. What to do to avert looming resulting conflicts? Clear answer: find a solution that satisfies as many needs as possible without destroying the project.

When a lot is at stake, as many parties as possible have to be on board, diplomats know that. The art is to keep the individual negotiating partner’s face, so that nobody has to leave the table as a real loser. This means approaching each other and promoting potential benefits. The EU’s demand for imported gas will grow, not only in Germany. In Berlin, Paris and Brussels, a compromise which all EU member states, with the exception of Bulgaria, were able to support, has been reached: stricter requirements should apply. However, the responsibility for third-country pipelines always rests with the EU country where the pipeline joins the European network. Although this requires coordination with the EU in the future, Gazprom will not be able to work as a supplier and operator at the same time, but based on the current state of knowledge, this should not cause the project to fail.

It is an entirely European compromise – led by France and Germany, who initially had very different views on the project. A bright hour of diplomacy – and a reason for the European economy to breathe a sigh of relief.

Dispelling fears and concerns 

For critics, the pipeline was a political project from the start. Chancellor Angela Merkel, on the other hand, insisted on regarding the project as purely economic. This caused growing annoyance in the EU. Every diplomat knows that concerns and fears must be taken seriously, however, they should be allayed as much as possible if they stand in the way of a negotiated result. There is no threat of unilateral dependency, because Russia needs gas revenues more than Europe needs Russian natural gas. And likewise, the operating license should only be granted if there is a new transit agreement between Moscow and Kiev. Thus the negotiating partners keep an eye on the interests of Ukraine.

And despite all the criticism that comes in various guises, it is important to carefully question whether the cause are really geostrategic constraints or whether the cause rather lies in countries’own economic interests. Diplomacy always tries to look at the big picture and not to be guided solely by sensitivities. For the true force of commitment lies in compatible solutions that satisfy as many parties as possible and leave no one as a complete loser.

I am not only convinced, but I know that entrepreneurs and managers already today find innumerable new opportunities when they see possible cooperation partners, even if these are found in their fiercest competitors. When even in the hardest fight no one is humiliated and exposed to expand one’s owntriumph. The business war ends first in the mind and then in the markets. In the economy of the future, many opportunities will grow from new and unusual forms of cooperation.

By the way, the art of gentle winning is learnable. Diplomatic strategies can be successfully transferred to entrepreneurial activity. If you would like to know more, you are welcome to attend the seminar “The Art of Winning Gently”, starting on April 10 in Zurich, Switzerland.


Gerlinde Manz-Christ