NOS Nieuws•vandaag, 13:51
After the downing of flight MH17 over Ukraine in July 2014, the cabinet was clear: “No more business as usual with Russia.” Behind the scenes, the cabinet quickly changed its mind. Partly under pressure from the business community, it started lobbying to restore the poor economic relationship.
This is evident from documents requested on the basis of the Open Government Act (Woo) about the discussions at the Ministries of Economic, Foreign and General Affairs about the economic relationship with Russia. It paints a picture that the Netherlands, driven by the business community, tried to prevent heavier sanctions against Russia.
For example, it was clear to officials at the Ministry of Economic Affairs: “European dependence on Russian gas is a reality.” In a State Department note, officials were clear that “Russia will not shy away from temporarily turning off the tap.” Officials spoke of Moscow’s “gas weapon”.
Before the war in Ukraine, more than 3000 Dutch companies were active in Russia. After the MH17 disaster, under pressure from the Netherlands, several senior Kremlin members and Russian state companies were placed on a European blacklist. Nevertheless, the late Hans de Boer, as chairman of employers’ organization VNO-NCW, urged several times to organize a new trade mission to Russia, officials wrote in 2019 in a ‘Russia strategy’.
On 27 May 2019, Minister Blok of Economic Affairs met Russian Minister Lavrov of Foreign Affairs in Munich, officially about Russia’s liability in the downing of the Malaysia Airlines plane. “VNO is very welcome”, Blok was told by Lavrov there. “There is also no ban on trade missions,” Blok said three years ago in response to parliamentary questions from the PVV. However, the trade mission did not materialize in the end.
Fears of jeopardizing economic ties with Russia prevented a reduction in the heavy dependence on Russian gas for years. Only after Russia had turned off the tap itself after the invasion of Ukraine last year and energy prices skyrocketed did the Netherlands rush to look for alternatives such as liquefied gas and sustainable energy sources.
Signals that market share is being lost to competitors from other European member states must be taken seriously.
European and International Affairs Directorate of the Ministry of Economic Affairs
Although it would not be business as usual, all released documents show that doing business with Russia should in fact continue. Less than two years after the plane crash, the Ministry of Economic Affairs pointed out in a Foreign Affairs advisory note that “Russia is not going away and a pragmatic approach to its policy is desirable (…) and that the EU’s dependence on Russian gas is a reality .”
The European and International Affairs Directorate of the Ministry of Economic Affairs added: “Signals that market share is being lost to competitors from other European member states must be taken seriously.” This was seen as an “undesirable situation”: “There is a risk that the Dutch business community active in Russia will fall to the rear compared to other EU member states.” “Russia is ambivalent towards the Netherlands,” officials note.
Before the war in Ukraine, a quarter of the gas used in the Netherlands came from Russia. Because gas extraction in Groningen was to be halted, the Netherlands focused on more Russian gas until the Russian invasion of Ukraine last year. When Russia largely turned off gas to Europe more than a year ago, energy prices shot up and inflation was fueled.
After the downing of MH17, the Netherlands focused on “sanctions and dialogue” with Russia. A 2015 invitation from Russian energy minister Novak to Minister Kamp to attend an ‘oil and gas conference’ in St Petersburg was thus “put on hold” on the advice of his officials.
Not a fair playing field
The European sanctions imposed under pressure from the Netherlands and the “guidelines” for companies on how to deal with this soon began to chafe. “There is certainly a realization that the business community is suffering from the (Russian) sanctions and the economic downturn in Russia,” says a report by the Dutch Trade and Investment Board (DTIB) a year after the plane crash. In this consultative body, various ministries talk to industrial parties such as VNO-NCW and MKB-Nederland.
What is particularly chafing is that not all European member states comply too closely with the guidelines for sanctions. Not fair (“no level playing field”), think Dutch companies. And so officials advise “to look at a broader interpretation of the guidelines. (..) We want to advocate an open attitude when it comes to economic activities with Russia that, strictly speaking, fall completely outside the sanctions”. And further: “In the economic field, companies would like to see an improvement in bilateral relations: more dialogue, more active trade promotion.”
In a sketch for the future, officials stated in 2015 two scenarios. A relatively optimistic scenario in which “Russian energy supplies to the EU are not hindered.” In a pessimistic scenario, it was indeed taken into account that the Netherlands could sometimes be left out in the cold in a winter: “Although the Russian Federation will probably not immediately stop energy deliveries to the EU, Moscow may actively use the ‘gas weapon’. (…) for example due to temporary interruptions of the gas supply.”
However, an option to reduce dependence on Russian gas remains undiscussed. Because: “Russia needs the European Union at least as much as the other way around”, was the conclusion. An American offer to increase deliveries of more expensive liquefied gas was turned down, partly due to pressure from Dutch companies.
VNO-NCW said in a response that the lobby of then chairman Hans de Boer for a new trade mission to Russia was part of a Russia strategy that the cabinet was working on in 2019. “Ultimately, this also included that the instruments, in the context of Foreign Economic Relations, would be reopened to Russia, including trade missions.”
According to VNO-NCW, De Boer has asked for new trade missions to Russia in this light. “Missions help open doors, especially in difficult markets where the State plays a major role in the economy and entrepreneurs are often confronted with numerous problems, such as customs problems. After Crimea and MH17, the European Union had imposed (limited) sanctions, which have since been have been maintained (and meanwhile, of course, have been made heavier several times.”