Press Play to listen to this article
Gazprom’s Russia-Germany pipeline under the Baltic Sea threatens to erupt into a geopolitical storm as US President-elect Joe Biden takes office.
On Monday the Federal Ministry of Economics said It had been informed by the United States of plans to impose sanctions on the Russian lay vessel, which has completed the last sections of the pipeline, from Tuesday. The ministry took note of the announcement “with regret,” said a spokesman.
Nord Stream 2 has received approval from both Germany and Denmark to complete the construction of the final 75 kilometers of the 1,200-kilometer route.
The sanction news comes as the pipeline geopolitics tighten.
Pressure on Berlin to rethink is growing after Russia held a kangaroo hearing on Monday for opposition leader Alexei Navalny when he returned to the country after a poisoning attack by the Russian secret police.
When asked whether Nawalny’s arrest was an occasion for Chancellor Angela Merkel to reconsider her support for the pipeline, government spokesman Steffen Seibert said told Reporter: “The position of the federal government on the Nord Stream 2 project, which is a commercial project, has been presented here often enough and has not changed.”
This is not the position of the outgoing Trump administration or the new Biden administration, which reflects the unease in much of Central Europe, where the pipeline is viewed as an instrument of Kremlin political power.
The US State Department spread the word. “We can confirm that the department has contacted companies to inform them of the adoption of additional mandatory sanctions … and the sanction risk of a continued link with the NS2 project,” a spokesman said via email, adding, “Those who Those who support and support this Russian project of malevolent influence must now get out or face the consequences. “
These warnings work. The Zurich Insurance Group, one of several insurers involved in the project, announced by email on Monday that it is “committed to fully complying with all applicable sanctions regulations”.
At the beginning of the month, the Norwegian company DNV GL, which is supposed to certify the completion of the pipeline, also withdrew, citing threats of sanctions.
Berlin’s cautious stance is unlikely to change after the CDU elected a new chairman on Saturday, Armin Laschet, who advocates maintaining relations with Russia and currently heads the state of North Rhine-Westphalia, home of German energy giants RWE, E. ON and Uniper.
But behind the position of the federal government hides a fierce internal dispute over the project. Many NGOs and the Greens oppose it, while big business and some local governments are interested.
The German state of Mecklenburg-Western Pomerania, where the pipeline is slated to go ashore, is using a US exemption for non-commercial government activities to advocate for the pipeline. The state parliament passed an invoice for the creation of a non-profit climate foundation expressly aimed at “contributing to the progress of the work on the Nord Stream 2 pipeline” – with a A donation of 20 million euros from Nord Stream 2 for booting. But large NGOs refuse to have anything to do with the foundation.
The US embassy in Berlin said German media that the workaround attempt “does not change the facts”. But the German federal tax office gave the company expedited approval and resulted in a diplomatic standoff.
The NGO Deutsche Umwelthilfe is Preparing a lawsuit to try to stop construction in German waters because he claims it violates environmental regulations. The group has also appealed to Competition Commissioner Margrethe Vestager and asked her office to investigate the German Climate Foundation for possible violations of EU state aid rules.
“We can confirm that we have received the letter, which we will answer in due course. We will now examine the content and examine the matter,” said a spokesman for the commission on Friday.
Brussels is right in the middle
The European Commission is less enthusiastic over the pipeline, concerned about the energy security of the block. But she is also not enthusiastic about US sanctions for activities in the EU – which she considers to be contrary to international law.
As early as Tuesday, the Commission intends to present a strategy paper to protect European companies from extraterritorial sanctions. A Design received from POLITICO shows that the EU will consider “possible involvement in foreign procedures in support of EU businesses and individuals” in order to combat sanctions. But every proposal can only come “in the fourth quarter of 2021”, according to the draft.
That leaves a sensitive issue for Biden once he becomes president on Wednesday. Having campaigned for a return to normal after four years of Trump trade wars and transatlantic roaring, Biden now has to find the balance between repairing frayed relations with Germany without making Russia weak.
“Efforts to resolve the Nord Stream 2 problem will be a tightrope walk,” said Richard Morningstar, who served as special envoy for Eurasian energy under the Obama administration.
The new sanctions require the US to consult with the affected countries before they are applied – and German Foreign Minister Heiko Maas said he was ready to speak to Biden’s team.
â€œOne possible solution would be to suspend the construction of the pipeline if serious talks were held about an agreement – with Germany, but also with Poland, Ukraine and other Central and Eastern European countries – that could limit the threat posed by Northern Stream 2 View of energy security and also protects the interests of Ukraine, â€œsaid Morningstar.
Do you want more analysis of POLITICS? POLITICS Pro is our premium intelligence service for professionals. From financial services to commerce, technology, cybersecurity, and more, Pro offers the real-time intelligence, deep insights, and breakthrough insight you need to stay one step ahead. E-mail [emailÂ protected] to request a free trial.