After all the United States has done for Western Europeans — militarily, politically, and financially — defending their freedom and giving them untold billions in foreign aid, they have turned their backs on us and apparently decided that they would rather trade with the Soviets than with us. Even worse, Western Europe is giving the Soviets an incredible inducement in the form of billions of dollars in low-interest loans.
It is hard to believe, but the West Europeans are actually building a fantastic gas pipeline for the Soviets that is planned to run from Siberia to West Germany and then to ten West European countries. It is being financed by $15 billion in low-interest-rate loans proffered to Russia by a consortium of West European banks and guaranteed by West European governments. If the Soviets want to sell gas to the West, they should build and finance their own means of delivering their product to the consumer. ’
Loaning the Soviets the money to build their pipeline only enables the Soviets to spend their resources on other priorities, including spending at least 15 percent of their GNP on weapons; buying computers, micro-electronics and other modern industrial goods from the West in order to strengthen the Soviet military-industrial complex; financing the hard-currency costs of aggression in Afghanistan, South Yemen, Africa and Central America; and hoarding their famous gold supply.
When completed in 1985, the Soviet pipeline is scheduled to carry $10.7 billion worth of gas each year. This would provide a third of the energy needs of Western Europe. Dependence on an uninterrupted flow of gas would make Western Europe hostage to the Soviet Union, militarily, economically, and diplomatically. The pipeline would always be the mailed fist in a velvet glove; the Soviets wouldn’t need to stop the gas in order to achieve their goals because both sides would know that the Soviet pipeline is a credible weapon.
The Soviets have repeatedly proved that they could and would cut off sales of their own products to serve their military/political goals. They shut off the flow of oil to a customer in 1948 when Yugoslavia broke from Soviet control, in 1961 when Albania allied itself with Red China, and in 1962 against Red China itself. More recently, the Kremlin threatened to cut off oil to Poland in order to pressure that government to crack down on the Solidarity trade unionists just prior to last December’s declaration of martial law.
Defense Secretary Caspar W. Weinberger has led the U.S. battle against the pipeline. He knows that the money loaned to the Soviets by Western European friends will fuel the Soviets’ arms-building program, and that in turn will end up costing us more money.
A cutoff or interruption would not only inflict massive devastation and disruption on the industries and homes of Western Europe, it would be just as hurtful to West European financial institutions which, in making such massive loans, have made themselves financially dependent on repayment.
Some American officials believe that the loans made to the Soviets are actually in excess of what they need for the pipeline and so will give the Kremlin a “hard-currency float” as high as $2 billion. That will ease the Soviet problem of financing their aggression in Poland, Afghanistan and other countries. This puts us in the absurd position of trying to show sympathy with the freedom fighters in Poland and Afghanistan, while our so-called Western European friends are helping to arm the Soviet aggressors.
In the last six months, the Soviet trade deficit with the West has been greatly aggravated by the large food imports, by falling world oil prices, and by Russian activities in Poland. The Kremlin has had to sell about $3.5 billion of their gold.
The Soviets look upon the pipeline as the major source of future hard-currency earnings. At the present time, Russian oil exports constitute two-thirds of the Soviet foreign-exchange dollars earned, and Soviet oil production is expected to decline after the mid-1980s.
The myth seems to persist among some naive businessmen that trade guarantees peaceful relations. European history has countless examples of bitter wars being fought between nations that were excellent trading partners, such as the French and the Germans. The U.S. was engaged in brisk trade with the Japanese right up to the Pearl Harbor attack.
The United States can offer the West Europeans a splendid alternative to the Soviet gas pipeline: American coal. We have 150 million tons of excess annual coal production capacity, and we could easily furnish the 90 million tons that would be the thermal equivalent of the Soviet gas.
