The World Briefly

May 23, 2022

In the Hot Seat

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Former German Chancellor Gerhard Schröder resigned as chair of the board of Russian state energy giant Rosneft over the weekend amid tremendous pressure in Europe to eschew the income from Russia or face sanctions, the Washington Post reported.

Rosneft said in a statement that the former Social Democratic leader found it “impossible” to continue in the role for which he has earned $600,000 a year since 2017. The company added that he was “invaluable” in implementing large-scale infrastructure projects in Russia and Germany.

His resignation followed efforts by the European Union and its allies to sanction Russian figures and entities following Moscow’s invasion of Ukraine.

Last week, the European Parliament supported a non-binding resolution urging the EU to extend sanctions to “the European members of the boards of major Russian companies and to politicians who continue to receive Russian money.”

Meanwhile, German lawmakers approved a decision to strip Schröder of his taxpayer-funded office and staff granted to him as a former chancellor. Even so, this decision is being legally reviewed, according to German media.

EU lawmakers noted that Schröder’s senior position in a major state-controlled company means he is “de facto closely cooperating with Russia.”

Even so, the former chancellor remains on the board of Nord Stream 2, the company that built the controversial, now-defunct gas pipeline between Russia and Germany – it was suspended recently. At the same time, Gazprom, another Russian energy company, had nominated Schröder to its board in February but it’s unclear if he will take up the role following the European Parliament’s resolution.

Schröder served as Germany’s chancellor from 1998 to 2005 and is considered a close friend of Russian President Vladimir Putin. He was integral in deepening Germany’s dependence on Russian energy: During the 2005 election, he signed a letter of intent with Putin to build the Nord Stream 1 gas pipeline, the first Baltic gas pipeline between Germany and Russia. He became head of Nord Stream’s board of shareholders three weeks after he left office, a move that caused an uproar in Germany.

He was also instrumental in developing the $11 billion Nord Stream 2 pipeline that directly connected Russian oil fields to Germany. The idea of expanding Europe’s reliance on Russian energy was divisive in the continent, and the project was a source of contention between Germany and the United States. Two days before Russia invaded Ukraine, current German Chancellor Olaf Scholz blocked the pipeline’s approval.

Still, Schröder has refused to condemn the Russian invasion or disavow his friendship with Putin.

This story originally appeared in the May 23, 2022 newsletter, Payback.