Schroeder will take on a chairman position at the North European Gas Pipeline (NGEP) consortium only three weeks after leaving politics. The consortium is 51 percent owned by state-controlled Russian energy giant Gazprom and 24.5 percent each by Germany's two largest energy companies, BASF and E.ON.

In Babayevo, a city roughly 300 miles north of Moscow, Gazprom head Miller announced Schroeder's new job Friday at the ceremony to launch the $5 billion project.

Present were business leaders, German Economy Minister Michael Glos and Russian Prime Minister Mikhail Fradkov, both wearing fur hats, who hailed the new pipeline an important bilateral project and said it sounded the bell to a new era in Russian-European energy cooperation.

While Schroeder wasn't spotted in the cold, his name didn't stay out of the headlines, as German politicians from all parties immediately criticized his new engagement.

Critics say it is a conflict of interest as Schroeder, along with his close friend, President Vladimir Putin of Russia, was a key figure in pushing the project amid heavy criticism from several Eastern European states.

Putin in September visited Schroeder in what the opposition called a bid to get him re-elected. Both politicians presided over the signing of the project's contracts, just a few days before Schroeder got ousted in the German general elections.

"Schroeder once did his friend Putin a favor by calling him a 'true democrat' and now Putin gets him a job. The whole thing stinks," Green Party chairman Reinhard Buetikofer told German public television.

Even inside Schroeder's Social Democratic Party, voices Monday asked the former German leader to lay open his earnings and duties in the contract, and maybe even reconsider taking the job.

Deputy parliamentary president Wolfgang Thierse said "I wouldn't have done it," and added there should be general rules keeping retired politicians from entering business projects they have pushed for in their political careers.

Schroeder will likely have to explain his works at the Swiss-based consortium. According to German weekly Bild am Sonntag, the position pays nearly $1.2 million a year.

Outside Germany, the project is equally controversial.

The new 750-mile pipeline will stretch under the Baltic Sea to link the giant Siberian natural gas fields to wealthy customers in Western Europe, thus bypassing Russia's traditional transit countries Ukraine, Belarus and Poland. The countries' governments have complained heavily, as the new route strips them of important transit fees and, more importantly, of a political argument, said Roland Goetz, Russia economic expert at the German Institute for International and Security Affairs, a Berlin-based think-tank.

"The project hugely benefits Gazprom as it can now blackmail these countries," he told United Press International in a telephone interview. "They could say: 'If you don't accept higher gas prices, we will deliver more gas through the new pipeline.'"

The pipeline will start delivering 27.5 billion cubic meters of natural gas by 2010, Gazprom said, adding that it could boost supply to up to 55 billion cubic meters.

Schroeder and other leading politicians have argued the pipeline will help secure Germany's energy future. Half of all German properties are heated with natural gas, and Russia owns roughly one-fourth of the world's resources. In 2004, Gazprom exported roughly 140 billion cubic meters of natural gas to Western Europe. The project comes as oil prices remain high and domestic gas production in the North Sea declines.

"The project is a further sign of the strong German-Russian economic cooperation," Klaus Segbers, Russia expert at Berlin's Free University, Monday told UPI in a telephone interview.

But Goetz said the project did not significantly improve Germany's energy future, as the pipeline taps into the same fields in Siberia that also supply the existing landlines through the Eastern European transit countries.

"We should focus on new fields and markets, such as in North Africa or the Near East," he said.

Foreign investors are nevertheless expected to tap into profits surrounding the new pipeline, as Gazprom Friday said it would open up to 49 percent of its shares for public trading. The decision is set to please traders who will likely buy shares in large quantities.

As for Schroeder's new job, observers say the former chancellor could use his political clout to open doors in Western Europe for Gazprom, which said it wants to hook Scandinavia and the United Kingdom up to the new pipeline.

Related Links
SpaceDaily
Search SpaceDaily
Subscribe To SpaceDaily Express