Monday, 5 January 2026

Why Olaf Scholz failed over Russian energy policy?

Greetings for the New Year 2026

At one point the then Chancellor of Federal Germany, Olaf Scholz was in strategic defiance against America led west when he signed up with Russia a comprehensive natural gas agreement in March 2022. But within months he failed. Why?

First and foremost NATO was too strong for him to fight alone. Jen Stoltenberg the then NATO Secretary General urged Olaf Scholz to walk back on the agreement lest Germany would be blamed for disrupting NATO unity. He urged the Chancellor to find alternate supply routes for Russian energy that are anyway going to be too costly.

Even though Scholz was explaining to NATO that Germany needs Russian energy much more than Russia needs German cash and joining in any sanctions regime targeting Russian energy would backfire. Moreover, finding alternate paths say from Central Asia would take quite some time to materialize. None of these pleas were acceptable to NATO Secretariat or to the White House under Biden Administration.

Unlike in the case of strong willed Gerard Schroeder former Chancellor and mentor to Scholz at Social Democratic Party (SPD), Scholz was too weak for a frontal fight against the NATO. He therefore reluctantly gave in to the arm twisting. Within few months Russian energy supply was dissipating on one hand. On the other German industrial output plunged 23% due mainly to the sky rocketing energy cost that hiked to almost 340%.

Olaf Scholz was having running duel with his defence minister Boris Pistorius, who became the most popular politician across the country and a top brass of the SPD at the expense of Scholz who was often considered too weak to mount any opposition to what Pistorius says in public as regards to the cabinet stand on Russian energy policy.

Scholz, was found as a compromise candidate for Chancellorship in the SPD coalition with the Greens and the liberal FDP. He often faced barrage of criticism over his weak handling of international relations with both Russia and America. As a peace lover he was perceived a coward due to his reluctance to get involved in the supply of heavy armour to Ukraine which he rightly perceived as impediment to balanced relationship with Vladimir Putin.

Russia is enemy to Germany narrative was intensively propagated by the Globo Capitalists who had a bigger say in German politics. Even though the electorates per se do not buy into it, especially in regions of the former East Germany, contrary opinion was either muted deliberately or treated as anti-German utterings. Hence, Scholz getting beholden to Putin was vociferously shunned.

More than anything else, his Foreign Minister Ms. Annalena Baerbock representing the Green Party was too vocal in her anti-Russian rhetoric  who at one point declared  that “Germany is at war with Russia” in the European Parliament. She along with Pistorius were actively pursuing anti-Scholz propaganda contrary to the principle of cohesiveness over of cabinet policy.

Lastly when his party SPD suffered a crushing defeat in a key regional election losing to the conservative CDU especially in its worst-ever result in Germany's most populous state of North Rhine-Westphalia the writing was on the wall that his days are numbered.

Sans a workable strategy to offset economic downswing of Germany resulting out of Ukraine war and energy war Scholz has no other choice but to continue as a lack-lustre Chancellor. His original strategic defiance against America led west failed miserably.

Lesson to be learned from Olaf Scholz saga is simple. You must understand how to navigate your strategy amid geoeconomics, if you wish to succeed in business or government!

 

Cheers!

 

Muthu Ashraff Rajulu

Strategy Adviser

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Strategy Adviser

 

 

 



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