Economic Interdependence of Germany, Ukraine and Russia: Shifting Triangular Relations in Trade and Energy Domains during 2003 - 2023

The political conditions established by the initiation of the Special Military Operation has led to the significant changes in the energy relations status-quo and especially in the energy trade between Russia and Europe. As there is a high interconnectivity between Russia and Europe, in 2021 it is up to debates whether Germany, the biggest EU economy and the biggest EU consumer of Russian energy, will be able to reject Russian exports in case of war (Siddi, 2021). The Lisbon Treaty and EU Energy 2050 roadmaps have undoubtedly envisioned the possible environmental and political dangers of being dependent on fossil fuel energy resources, but the most optimistic strategy aimed to achieve energy sovereignty only by the year 2050. It is doubtful whether this reference point could be achieved even in three decades, as the non-renewable energy is still in heart of most of industrial infrastructure, with another problem being the unseenable danger of the climate change; it is more difficult to argue that at some moment in future the excessive use of the non-renewable energy will create dire and unimaginable consequences, compared to the relatively simple post-2022 logic of “do not trade with an enemy, as it will use energy revenue to produce or accrue more weaponry”. It creates a paradox, where it is much easier to develop a common policy against Russia which, unlike climate change, possesses much less danger for the EU, compared to the already problematic floods and droughts. Regarding the Ukrainian energy status-quo, this country has received multiple energy-related infrastructure from the USSR, as well as some sufficient coal and gas fields, which were effectively utilised after 1991. Prior to 2022, it was able to cover the major part of its energy consumption by domestic energy production, and it is likely that in several years given the sufficient Russian or EU investments in its energy infrastructure recovery this can be achieved once again. However, Ukrainian energy status-quo has several major problems. Firstly, it cannot produce all the required energy domestically, even in the peaceful times, therefore it must rely upon the import from within. Secondly and consequently, if Kiev desires to approach the EU even further, it has to increase its renewable energy production and to decrease the dependence on nuclear energy, with the latter being a sufficient challenge for the Ukrainian economy. Finally, it can no longer benefit from the preferential energy trade conditions with Russia, the biggest energy exporter in the European region. In the 2000s, Ukraine was benefiting from the low prices of the Russian gas and oil, therefore it has less ability to balance its energy supply between the different market options. We can say that Ukraine has some favourable conditions for increasing its energy independence in future, yet it requires less hostilities and much more investments. And even in this case, it is most likely that the Ukrainian vision for its energy future will not come in line with the EU’s aim of de-carbonisation, as the heavy reliance on nuclear energy, oil and gas makes the nature of its energy sector much closer to Russia rather than Europe.