While the decision by Germany's governing coalition, led by Chancellor Angela Merkel, to phase out all of Germany's nuclear power plants -- which provide 28% of German electricity -- may be politically popular, it may do serious damage to the German economy.
One result of killing its nuclear power industry will be that it will force Germany to import more electricity directly from its neighbors, mostly France or Poland. With France, the electricity will still be generated by nuclear power; and with Poland, by highly polluting soft coal or by natural gas. Even so, neither France nor Poland has enough spare electric generating capacity to replace the entire array of German nuclear power plants.
Natural gas from Russia or Poland might be used to generate some electric power, but members of Germany's influential Green Party almost as hostile to natural gas as an energy source, as it they are to nuclear reactors. Germany might have a reservoir of shale gas in its north, but, for political reasons, it is an open question if any gas drilling will be allowed.
The German government claims that it will be able to replace most of the lost nuclear plants with renewable sources. The Government hopes at least to double the more than 19,000 wind turbines already in operation throughout Germany. The unreliable nature of wind and terrestrial solar power means that there will have to be back-up generators; and these will only add to the capital and overhead costs that Germany will need to pay for its new energy order.
To pay for all this imported electricity and for the new wind turbines, Germany will have to export even more goods and services. This export drive will make Germany even more dependent on international trade -- while even greater energy costs will only increase the costs of production inside Germany.
Less homemade energy, more exports and higher prices all taken together will probably mean that the German people's living standards will either stagnate or go down. This loss of prosperity will, in turn, reduce Berlin's ability to help the rest of Europe and the rest of the world to recover from the current recession: Germany will no longer be able to continue purchasing their imports and contributing to the bailouts of Greece, Ireland, Portugal, and other aspiring recipients.
More significantly, the new non-nuclear power policy may also inflict lasting harm on the precarious post-communist geopolitical order that has existed in the borderlands between Berlin and Moscow since the early 1990s.
Unfortunately, no matter how how much the politics and economics of the region have changed in the last twenty years, the geography has remained the same: to the East there is still Russia. The men who now run things in Moscow have never really accepted the loss of the Soviet Empire. Prime Minister Putin once called the collapse of the USSR " the greatest geopolitical catastrophe of the century," and has undoubtedly never regarded the loss of Russia's superpower status and hegemony over its Western neighbors as permanent.
For more than twenty years, Germany and the West have supported the emergence of a regional economic and political balance that has improved the lives of the people of Poland, the Czech Republic, Slovakia, Hungary, Romania, Bulgaria, the former Yugoslav republics, and most of the former Soviet republics, with the exceptions of Belarus and Moldova.
Germany has not only provided generous amounts of direct bilateral aid, but has also been at the forefront of the EU's effort to help these nations. German firms have invested in Central and Eastern Europe, creating jobs and modernizing local industries. The nations of Central and Eastern Europe are now fully integrated into the global economy. Along with the US and Canada, the EU's effort in what was the former Warsaw Pact area has been an amazing success.
One way that Russia has reasserted its influence in Central and Eastern Europe is through it's energy export policy. The natural gas pipelines that were built in the 1980s, (over the objections of the Reagan administration) have made large parts of Europe dependent on Russia's natural gas. In places like Ukraine and Belarus Russia has not hesitated to use gas supplies to reward its friends and punish its enemies. In Ukraine, in 2005-2006 Kremlin bosses cut the gas flow in order to put pressure on leaders in Kiev who were moving towards friendly relations with the West.
Poland is, to put it mildly, not a historic friend of Russia's. The leaders in the Kremlin have long resented the fact that in order to sell natural gas to Germany and to other places in Western Europe they have to pay transit fees to the government in Warsaw. Gazprom, the Russian gas monopoly, has recently been building an underwater gas pipeline that will bypass Poland and pump the gas directly from Russia to Germany.
If Germany suddenly can buy gas from Poland, the economic justification of this under-the-Baltic pipeline becomes problematic . At the very least, the project will take many more years to pay for itself than it would if Russian natural gas did not have to compete with Polish natural gas for the German market.
Russia has a history of responding violently when its energy interests are challenged. The oil pipeline that bypasses Russia by going through the Republic of Georgia and Turkey and sending oil directly from Azerbaijan and Central Asia to the Mediterranean, certainly angered Moscow and was part of the motivation for the Georgia-Russia war of 2008.
Poland is a member of both the EU and NATO, and that should, in theory, protect the pipeline; but in May 2007, when Russia launched a major cyber strike on Estonia, the tiny Baltic nation was, like Poland, a full member of both of these organizations. Although Russia has always denied responsibility for the attack, deniability is always one of the most predictable aspects of cyber war, not to mention the press policy of Russia.
In any event, thanks largely to Germany's decision to rid itself of its nuclear power industry, the economic and political balance of power in Central and Eastern Europe is going to be upset.
An already angry and resentful Russia, will have yet another reason to be even more angry and resentful. This possibility should probably keep Europe's political and military leaders up at night, but probably they won't. After all, Europe is a peaceful place full of peaceful people; to them, the ominous rumble of tank engines is probably just an illusion; and even if it is real, it is distant. At least for now.