Interview with German Ambassador to Ukraine Anka Feldhusen ahead of Unity Day
International opposition has always been strong to the Nord Stream 2 pipeline, which will bypass Ukraine and send more natural gas directly from Russia to Germany.
But now, a growing chorus of voices inside Germany is calling on German Chancellor Angela Merkel to call a halt to the Baltic Sea project that is 94% complete and, once operational, will increase the direct bilateral transit capacity to 110 billion cubic meters when combined with the existing Nord Stream line.
And Merkel is said to be listening. She is also said to be exasperated with Vladimir Putin and distrustful of the Kremlin dictator, who she knows well from her 15 years as chancellor. If Merkel’s concern translates into real action rather than political posturing, the near-fatal Aug. 20 Novichok poisoning of Kremlin critic Alexei Navalny will be the turning point.
“Navalny seems to have been kind of the last drop. The fact he’s treated in Germany made it closer to us,” German Ambassador to Ukraine Anka Feldhusen said in an interview with the Kyiv Post, ahead of the 30th anniversary of Unity Day on Oct. 3, celebrating the nation’s reunification.
Merkel, a revered figure in Germany and internationally, will be leaving office next year.
So Ukrainians, Americans and other opponents of the 1,230-kilometer Nord Stream 2 are hoping that she can be persuaded to deliver the death blow to the pipeline that is seen as a pet political project of Putin rather than an economically sensible one, at a cost of $11 billion, when cheaper delivery options (such as through Ukraine’s land-based pipelines) exist.
“She would have never come out saying that stopping Nord Stream 2 stream is on the table if she hadn’t been exasperated” with Putin, Feldhusen said.
Still, the legal and financial ramifications of stopping a project that is privately financed appear to suggest that Nord Stream 2 eventually will be completed, despite the ongoing delays. Under an agreement with Russia’s Gazprom, Ukraine can expect to transit at least 40 billion cubic meters of Russian gas annually for the next several years — about a third of capacity.
And, even if Germany turns against the project, Berlin is not happy that Nord Stream 2 critics, chief among them America, have chosen economic sanctions on the private companies involved in building the new pipeline. “I honestly think that’s wrong because it’s against a partner,” she said.
Yet if Russia keeps up its lawless ways and stonewalling on answers demanded in the Navalny poisoning, Germany may have no other choice than to finally get tougher on Putin. The Kremlin “might lose one of their communication partners” in the European Union, the ambassador said.
The problem of how to change Russia’s behavior is one that the West collectively still has not solved, she said, leaving unsatisfyingly slow and incremental progress — if at all. On Russia’s war, which Germany has a lead role with France in peace talks, she cited modest advancement in the ability of Ukrainians to travel to and from Kremlin-controlled areas, demining and prisoner exchanges.
In any case, the energy realities are that Germany will need lots of Russian natural gas for the foreseeable future as it transitions to renewable sources and away from nuclear energy by 2050 and then eventually coal and oil.
“If it doesn’t come from Nord Stream 2, it will come through Ukraine,” she said. “Nord Stream 2 for Russia was always more of a showcase than about making money. If that is stopped, one of their biggest lighthouse projects goes down the drain. They will be able to sell the gas otherwise, but will have taken a huge blow in economic prestige.”
Don’t wait a generation
During the hour-long interview with the Kyiv Post, Feldhusen was generally upbeat about the state of political, economic and cultural relations between Ukraine and Germany. She also believes that Ukraine is on the right track to greater integration with the European Union, politically and through concrete economic transformations such as becoming connected to the European electrical power grid in coming years.
She, moreover, thinks that President Volodymyr Zelensky should not worry so much about his declining popularity since his landslide election last year. “I would tell him: You are doing things the country and people need and they appreciate it. Don’t worry about your numbers.”
Yet, just as Ukraine is unhappy with Germany for its support of Nord Stream 2, Germany — as an EU leader and one of the G7 democracies — has long been critical of Ukraine’s inability to summon the political will to combat corruption and create strong and trusted public institutions, especially in the courts.
“Ukrainian people want justice reform,” she said. “What Ukraine has instead is a vicious circle of institutions defending each other. What you need, above all, is the political will from the very, very top. This is something that the president has to come out more forcefully on. Without this reform, the country will need another generation to benefit from this reform. If I were Ukrainian, I would not want to wait another generation.”
Additionally, Germany and the other G7 nations — United States, France, Italy, Japan, Canada and the United Kingdom — are trying to find ways to pressure Ukraine into ensuring the strength of institutions that form “an independent anti-corruption” system. Those include the National Anti-Corruption Bureau of Ukraine, the Specialized AntiCorruption Prosecutor’s Office, the High Anti-Corruption Court and the National Association for the Prevention of Corruption.
All came into existence as part of the slate of reforms undertaken after the EuroMaidan Revolution overthrew Kremlin-backed President Viktor Yanukovych in 2014. After he fled to Russia, Ukrainians learned he
left no money in the state treasury and official estimates are that his kleptocratic regime stole anywhere between $40-$100 billion in four years of power. Yanukovych’s thievery was aided by his monopolization of all branches of government and power agencies, including police, prosecutors and courts.
But, either because of limited powers, obstruction from powerful vested interests or internal betrayals, Ukraine’s anti-corruption agencies haven’t made much of a dent in Ukraine’s ubiquitous corruption problem.
Moreover, civil society activists and independent journalists find themselves increasingly under attack. Case in point: The arson fire that destroyed Vitaliy Shabunin’s home, a crime that remains (like almost all of them) unsolved — something that Germany has not forgotten, Feldhusen said. “We noticed that and we talked about it,” she said.
Also, Feldhusen cited absurd court decisions and regulatory rulings as detrimental to investment.
Without rule of law, Feldhusen said, Ukraine will never reach its potential — and never attract enough investment to transform the country
from a poor one to a prosperous one. “It will stay difficult to invest here.”
Economies hum along
While the COVID-19 pandemic has inflicted huge financial losses globally, national economies are recovering. Ukraine, in fact, may even shake off the effects by the end of the year, some predict. Germany, meanwhile, remains a world economic powerhouse.
In Ukraine, German businesses have told Feldhusen that “the damage by the pandemic is less than actually expected,” aside from such service industries as hotels and airlines.
And, looking at the trade figures, it’s hard to see the problems between Ukraine and Germany. Last year, bilateral trade approached $10 billion and, despite the pandemic, the 2020 numbers could come in strong too.
And there’s concrete examples of new investment.
Kostal Ukraine, a subsidiary of Germany’s Leopold Kostal GmbH & Co., is building a second plant for the production of automotive electronics near Kyiv Boryspil International Airport. It’s expected to start work in
Feldhusen joined Verkhovna Rada speaker Dmytro Razumkov, Kyiv Oblast Governor Vasyl Volodin, director general of Kostal Ukraine Radoslav Shkup and other dignitaries for the groundbreaking ceremonies for the nearly $50 million investment that is expected to create 900 jobs. The company has already one auto components production center, opened in 2006 and employing 1,000 people, in Pereiaslav of Kyiv Oblast.
Also, in December, the Germanbased STADA Group, a global manufacturer of generic drugs and consumer healthcare products, acquired the pharmaceutical business of Biopharma, one of the key pharmaceutical producers in Ukraine. The purchase also included the production center in Bila Tserkva, the city of 200,000 people located 85 kilometers south of Kyiv. Feldhusen said she understands the company is investing more than $90 million into Bila Tserkva and expanding employment.
‘Nothing to worry about’
Of all the things that Ukraine needs to worry about, including Russia’s ongoing war, a change in German foreign policy should not be one of them — no matter who wins Germany’s elections next year.
“Ukraine has nothing to worry about,” she said. “Our relations are so intensive and across parties. They are all virtually knocking on my door, asking when they can come to Ukraine. Ukraine has very steadfast friends in Germany.”
Nonetheless, the German diplomacy mission, with 150 people working for the embassy, is struggling along with everyone else to adjust to the restrictions imposed by COVID-19. Unity Day celebrations will be online, rather than in the courtyard of the German Embassy in Kyiv.
Feldhusen’s travel around Ukraine has been curtailed, but not eliminated. She continues to hold in-person meetings, with plenty of physical distancing, including with Prime Minister Denys Shmyhal. She also does regular media interviews, in Ukrainian when the circumstances demand.
“We’ve all become more creative to avoid becoming infected while still meeting people, with open windows and open balconies,” she said if the weather forbids outdoor meetings.
At the higher levels, both foreign ministers — Ukraine’s Dmytro Kuleba and Germany’s Heiko Maas — have visited each other’s countries in 2020. “Our foreign ministers get along really well,” she noted.
“The social media team did wonders during those weeks and months when we were in complete lockdown. We developed ways to spread the word of Germany around Ukraine,” Feldhusen said.
Creativity will be put to the test for the foreseeable future, since strict and prolonged lockdowns inflict too much economic damage.
“The pandemic will be with us and perhaps even more so in October,” she said.
Anka Feldhusen, Germany’s ambassador to Ukraine, speaks with the Kyiv Post on Sept. 16, 2020, outside in the courtyard of the German Embassy. It is located at 25 Bohdana Khmelnytskoho St. in central Kyiv.1
People gather outside the Berlin Cathedral (Berliner Dom) illuminated as part of the yearly Festival of Lights in Berlin on Sept. 14, 2020. The festival of lights, an outdoor light art gallery with more than 90 works of art in 86 locations spread over 168 square kilometers throughout Berlin, ran from Sept. 11-20.