The EU talks to Russia about matters of vital interest to every member-state’s citizens, but a prime example is energy. Here the picture has shifted sharply over the past decade. Ten years ago, Russia was seen as a bright prospect for Europe’s future oil and gas supplies, and a source of nuclear expertise, fuel and technology. Since then corruption and incompetence at home, and bullying behaviour abroad have eroded Russia’s clout, to the point that even Germany is now sceptical about its reliability. In the past, Germany was heavily dependent on Russian gas. Its biggest energy companies were closely tied to Gazprom, and the former German Chancellor, Gerhard Schröder, took on the chairmanship of a controversial Russian–German gas pipeline on the Baltic seabed soon after he left office in 2005. In his time Germany resisted any attempt to talk toughly to Moscow on energy and other issues: many outsiders saw that as sinister. They feared that the gas supplies had anaesthetised the country’s prudence and scepticism when it came to policy towards Russia.17
That has changed. Russia’s squabbles with transit countries such as Ukraine have interrupted gas supplies to Europe and rattled German confidence. Angela Merkel, Mr Schröder’s successor, is instinctively more hawkish about Russia. Corruption and incompetence in Gazprom and elsewhere have raised fears about Russia’s ability to meet its long-term supply commitments. New gas supplies are available from elsewhere – chiefly Liquefied Natural Gas (LNG), which can be delivered by sea from distant suppliers. Only five years ago this was scarce and expensive. But technological change has made tankers and terminals cheaper, while new extraction techniques mean that more gas is on the market. The days when Russia’s east-west pipeline monopoly created a lock on European energy supplies are over.
But Russia is now playing a hard defensive game. It no longer controls the bottleneck in supplies. Instead it wants long-term contracts, stakes in downstream distribution systems and market information. In Britain, those dealing with Gazprom’s local subsidiary say that its behaviour is less that of a new entrant into the market, and more of an intelligence operation. The head of counter-intelligence for Germany’s BfV security service, Burkhard Even, highlighted the role of Russian spies in
supporting Russian companies… to gain a footing in the German energy sector. The interest is above all in alternative and regenerative energy, possibilities to increase energy efficiency, European energy interests and diversification strategies…18
Russia is in most respects a backward country – a source of humiliation to those who remember that the Soviet Union was the country that put the first satellite, living creature and human being into space. Closing that gap through the normal process of industrial development seems all but impossible. Despite remaining pockets of excellence in the education system, ambitious Russians head abroad, rather than building their businesses at home.19 Though Mr Putin is personally determined that Russia become a world leader in nano-technology, building such hi-tech industry from scratch is hard: Russia does have plenty of brainpower, but it is starting ten years later than competitors in Germany, America and Britain. The only way Russia can hope to close the gap is by stealing secrets, either to take advantage of them in its own industry, or to trade elsewhere (principally to China). One way of doing that is snooping on other countries’ communications.
Use Google Earth to search for 57º48’8.20”N 28º12’58.59”E and you will see a snapshot, taken from space, of a large collection of satellite dishes on the westernmost extremity of Russia, on the Estonian border, to the north-east of the main A-212 road from the provincial capital Pskov. Even viewed from on high, the gleaming metal and bright paintwork make it clear that this is a new installation; the long shadows cast by the guard fence and sentry posts around the antenna array indicate a high degree of security. Google now helpfully labels it ‘Center FAPSI’20 and an enterprising photographer has provided a fine picture of it.21 Western intelligence officials were initially puzzled about the facility’s purpose. Russia already has an archipelago of electronic listening stations: why build a new one exactly there?
The answer was that this particular corner of Russia overlapped, just, with the then footprint of the main Inmarsat 4-F2 satellite, which sits high over the Atlantic ocean in a geostationary orbit carrying a huge quantity of data between Europe and the United States.22 Such data networks are of great interest to Russia. The ability to listen in to mobile phone calls, bug emails, observe web-browsing habits and obtain passwords are essential ingredients of other espionage operations, both in gathering politically sensitive information and in garnering compromising material that can be used for blackmail – and also in stealing other countries’ commercial and industrial secrets.[21]
Industrial espionage was a big feature of Soviet-era intelligence too. But the economic planners who ran industry then were mostly incapable of putting into production the techniques and technology that the KGB’s spies so painstakingly and brilliantly acquired during the Cold War. Many of those constraints have now gone. Russian state-backed high technology companies operate more effectively than their Soviet-era predecessors. One reason is that they are not shackled by the constraints of the planned economy. Another is that the paranoid culture of secrecy has faded. Their experts and executives can travel freely; Western controls on the export of sensitive equipment that frustrated Soviet engineers during the Cold War have lifted.23 Not only can the stolen material be better used, but the threshold of treachery when obtaining it has sunk. In the days of ideological competition between East and West, even the most hard-up Western scientist might think twice about helping a totalitarian superpower whose very existence was based on lies and mass murder. Helping Russia sounds a lot less bad: after all, many Western businesses and politicians have deep interests in that country too. A German scientist or engineer who succumbs to a Russian approach to pass on secrets from his firm or university laboratory could be forgiven for thinking that if senior public figures can enrich themselves through connections with Russia, humble boffins can do the same.
Overall, America is the top target for Russian foreign intelligence. The partnership that has developed since the ‘reset’ is grudging and cautious, while the adversarial approach is deeply rooted and instinctive. As well as harassing and monitoring members of the Russian diaspora, a prime goal for the Russians is to assess and if possible influence policy-making. This includes scrutinising anyone who presents a direct or indirect challenge to the regime in Moscow through their activities in political life in Washington, DC, such as retired officials, commentators and policy-makers; and think-tank and academic experts who are involved in policy that affects Russia, its interests and its neighbours. Practical targets range from the symbolic, such as the repeal of the Jackson-Vanik amendment,24 to the wonkish, such as understanding arguments in the Senate about arms-control treaties. A prime strategic interest is to weaken transatlantic security ties, thus strengthening Russia’s position in Europe. This is behind the Russian demands (so far fruitless) for a new European ‘security architecture’ that would exclude America and give Russia a legally binding veto over the continent’s decision-making. To that end, Russia stokes anti-Americanism in Europe and eagerly encourages American policymakers and thinkers to see the world in terms of bilateral deals between superpowers, rather than the sentimental old alliances of the last century. Russia is pushing on an open door in this: America’s commitment to NATO is weakening, as is Atlanticist sentiment in Europe.
21
u Of course Western intelligence collects information on Russia too. America’s National Security Agency gathers electronic data from antennae in north-eastern Poland, close to the Russian border.