Europe’s broken Caucasus-Caspian policy is partly in trouble due to Germany’s Russia policy, which was put in place by the former German Chancellor, Mr. Schroeder, and faithfully executed by his SPD successor, Mr. Steinmeier who shared power with Ms. Merkel in the last German government.

The Sunday election, however, has put an end to the four years of political awkwardness that was caused by the CDU/SPD coalition, which as Ms. Merkel said shortly after winning, opens up new possibilities.  One of them is a new German Caucasus-Caspian policy.

For eight years now, Germany was absent from this region, and Berlin mostly concerned itself with its relationship with Moscow. Inside Europe and in NATO, Germany has held the odd position of defending Russia and clipping any EU policy in the bud that Moscow perceived as threatening to its core interests. This obsession with Moscow was largely SPD’s doing, and to an extent supported by the German industry. Lately though the German businessmen have begun to see that there are also big investment opportunities in the Caucasus-Caspian region, and many have started to argue that the German relationship with Moscow needs to be separate from Germany’s policy on the Caspian.

With the SPD now gone from power, the German business on board and Ms. Merkel keen to recalibrate the German-Russian relationship, the opportunity for Germany to become a serious player in the Caucasus-Caspian region is real.  And with Germany will also come a more ambitious EU.

Germany has always been the key to success in Europe’s outreach to the east. From enlargement to EU Balkan policy it was Germany in the driver seat. In the case of the Caucasus-Caspian region however, Berlin was often playing the role of the spoiler, which is why the numerous EU initiatives, from the neighborhood policy to eastern partnership never really worked.

The Caucasus-Caspian region is immensely valuable to Europe from a geopolitical, energy and economic point of view. The region borders Europe and sits between Europe and Central Asia. It is Europe’s gateway to Central Asia, an important market and a cultural melting pot, and in some ways a bridge to China.  But the Caucasus is riddled with unresolved disputes. Georgia has just fought a war with Russia resulting in it losing two of its territories that now claim to be independent states backed by Russian. Azerbaijan and Armenia are unable to resolve their dispute over the Nagorno-Karabakh region, which is part of Azerbaijan’s territory under Armenian occupation since 1993.  These pockets of instability are not only a security challenge for the EU, which now borders the region across the Black Sea, but they are also a huge stumbling block when it comes to regional cooperation, including cooperation on EU and NATO affairs.

All three countries are biding for EU and NATO memberships, but due to the security context imposed on the region by these conflicts, they have been unable to present a united front to Brussels, which has only meant that Europe has never really had to deal with them in a serious fashion in the sense of offering the Caucasus countries a real European perspective and a road-map to membership.

The security problems are also an issue in terms of Europe’s energy interests in the Caspian region. The Caspian Sea is a gas Mecca, which the EU is desperately trying to access. But as long as the conflicts simmer the pipelines are unsafe, which is why not much has been achieved in terms of building an access line from Europe to the Caspian gas.

With the right in power in German this all can change. Chancellor Merkel has the leadership credentials inside Europe to make sure that Europe becomes a direct stakeholder in the Caucasus security theater, and that Europe secures access to Caspian gas at a competitive price. This also means dealing with Turkey, which is a mega transit state and which has been difficult on agreeing to a fair transit and price fee with Azerbaijan, the ready-to-go supplier of Caspian gas to Europe.

A comprehensive German policy in the Caspian will need to have at least three components in order to function effectively – security, energy and foreign investment.  On the security front, Germany could become a peacemaker between Armenia and Azerbaijan, and work with Russia and Georgia to encourage between them confidence and cooperation. A revised German energy policy, with an emphasis on diversification of imports, would mean that Germany can play the roll of a major supporter and financier of the Southern gas corridor, which needs a multi-pipeline architecture in order to be a stable and reliable European access point to the Caspian gas.  In terms of promoting foreign direct investment into the region, a new German political awareness for the region and a will to develop closer ties with the Caucasus countries, will inevitably bring about a better economic co-existence between Germany and the region.

Europe stands to benefit from a redefined German role in the Caucasus-Caspian region, and countries like Azerbaijan have something tangible to offer to Germany in exchange for a more productive relationship.  

Borut Grgic is the founder of the Institute for Strategic Studies.