Thursday, April 22, 2021

Nord Stream 2: german politicians seek to mitigate the impact of the sanctions

 Source WELT:

US President Joe Biden was barely confirmed in office when CSU boss Markus Söder tweeted: “The transatlantic bridge is being built.” Meanwhile, despite all the relief about Biden's more cooperative political style, it is clear that some traces of this bridge are still clear “America first” applies.

A current example of this is the almost completed Nord Stream 2 gas pipeline, which is increasingly coming into the focus of the US government in view of the growing tensions with Russia - and is therefore putting pressure on the German government.

The Americans want to prevent the pipeline from Russia to Germany "at all costs," as Biden and other top US politicians emphasize. And the stronger the friction with Russia, currently fueled by the imprisonment of the Kremlin critic Alexej Navalny and Russian troop concentrations along the border of Ukraine and on the Crimean peninsula, the stronger the pressure of the USA on the German government.

In the factions of the grand coalition, the tough US course is leading to the realization that the 1,200-kilometer pipeline can only be completed at a high - possibly too high - foreign policy price.

A plan B is needed. There are now more votes in the CDU to put the building on hold for the time being. And in the SPD it is said that the company can be linked to political conditions for Russia.

"We need a face-saving solution for all sides, a moratorium could be one," says the CDU Federal MP and foreign policy expert Roderich Kiesewetter WELT.

Several CDU politicians had previously spoken out in favor of examining such a moratorium, including Defense Minister Annegret Kramp-Karrenbauer and the Federal Government's coordinator for transatlantic cooperation, Peter Beyer (CDU). A majority in the parliamentary group, including politicians like Kiesewetter, has so far been skeptical of this. Apparently, some people are now starting to rethink.

The foreign policy spokesman for the SPD parliamentary group, Nils Schmid, explains: “I don't see that the project can be stopped now, so close to completion. It is also questionable whether political majorities could be organized for this in a short period of time. However, it would be possible to make the operation of Nord Stream 2 subject to certain conditions. We should talk about that. "

So far, the SPD has been fairly closed behind the pipeline through which 55 billion cubic meters of gas are to flow into the European Union every year: the prime ministers in East Germany as well as finance minister and chancellor candidate Olaf Scholz and party leader Norbert Walter-Borjans.

Mecklenburg-Western Pomerania's Prime Minister Manuela Schwesig (SPD) was instrumental in establishing a so-called environmental foundation, the purpose of which is actually to support the pipeline that is to end in Lubmin near Greifswald.

And the chairman of the board of directors of the project company for Nord Stream is known to be former Chancellor Gerhard Schröder (SPD).

The fact that the SPD is now calling for the operation of the pipeline to be linked to political conditions, which, depending on the political situation, could quickly lead to an actual shutdown, is a new tone. Ex-party leader Sigmar Gabriel recently told WELT that, from the point of view of European sovereignty, Nord Stream was “initially none of your business”.

That is exactly what the Americans see differently.

Because unlike Donald Trump, who wanted to prevent the underwater pipeline between Russia and Mecklenburg-Western Pomerania through the Baltic Sea also in order to be able to sell American liquefied natural gas to Europeans more easily, Biden and a number of influential US politicians are not only interested in energy policy.

But above all, to get your hands on another instrument with which Russia can be put in its place. Nord Stream 2 falls under the geopolitical category in Washington.

Influential members of Congress see Nord Stream 2 not only as a danger to Europe, but also as a massive threat to American security interests. With the pipeline, Russia would get a "geopolitical tool", warn Senate members James Risch and Jeanne Shaheen. The pipeline would “tie up” Europe to Russian gas and thus expose “the next 40 years” to political constraints, the Republican and the Democrat wrote in a letter to Biden.

A few days later, Congressmen Michael T. McCaul (Republican) and Marcy Kaptur (Democrats) replied in a letter to US Secretary of State Antony Blinken: “If completed, Nord Stream 2 would enable Putin's government to continue using Russia's energy resources as a weapon to exert political pressure on all of Europe. "One must counteract the evil influence of Russia, also by making sure that Nord Stream 2 is never completed". Both letters are available to WELT.

Chancellor Angela Merkel (CDU) had long described the billion dollar project as a purely economic project, so there was no reason for the federal government to intervene. But of course the gas pipeline is highly political.

And that's also because it triggers criticism not only in the USA, but everywhere in Europe - and that primarily affects the federal government and not the companies involved, Gazprom or, on the western side, Wintershall, Uniper and others, which do not hold any shares hold more of the project company for the pipeline, but remain committed to the project.

All EU institutions reject Nord Stream 2 as incompatible with a common European energy policy, and the Baltic states, Ukraine and Poland feel that they have been bypassed in the truest sense of the word. The southern Europeans resent the federal government for sticking to Nord Stream, but preventing the southern variant, South Stream. France recently warned the Germans to put the project on hold. In addition, environmentalists are storming against it, and economists are questioning the economic viability.

A moratorium could be a way out of the dilemma - believes Kiesewetter's group. And a political signal. "A moratorium would be a sign to the Russian government that we will not simply accept cases such as the imprisonment of Alexei Navalny, the actions of the Russians in eastern Ukraine or the annexation of Crimea," said the CDU MP.

However, he also sees the problem of such a solution: "It is clear that such a moratorium does not exist for free, the consequence would be contractual penalties for which the federal government should be responsible."

The project could cost up to ten billion euros; the submarine tube is currently 95 percent complete. Experts estimate that if it is not completed, claims for damages could accrue that are also in the billions. Money that the taxpayer would have to raise.

It is clear to those in favor of this solution that this will not go down well, especially in a super election year. "An alternative to a moratorium could be to complete the natural gas pipeline, but then not obtain any Russian gas until the open foreign policy issues have been resolved, in other words a kind of shutdown mechanism," suggests Kiesewetter.

The CDU politician is thus quite close to the ideas of the SPD foreign politician Schmid: “With this solution, we would not come under time pressure. That only arises when you aim to demolish construction, ”he says.

“In addition, in this case the state would not be confronted with high claims for damages, which would inevitably threaten in the event of a moratorium. In the case of operational requirements, if they are motivated by foreign policy, we could invoke the law of sanctions. ”This would mean that companies would not be able to sue for compensation.

It is questionable whether this course has a majority in the SPD. And in the CDU-led Ministry of Economics, they don't want to hear about such initiatives. The federal government is neither a contractual partner nor can and should determine the conditions under which gas will flow through Nord Stream 2 and be accepted, it says.

Mind games about "a de facto expropriation" would have a fatal effect on investors and the location. Alternatives to aborting the pipeline plans are negotiations with the Americans and other partners about an "energy partnership", technology transfers to expand renewable energies in the USA or investments in the gas network in Ukraine.

Foreign politician Schmid suggests that we first sound out the intentions of the US government and come to an agreement with it “whether we want to use energy policy as a sanction tool against Russia at all. And what goals we are pursuing if we slow down Nord Stream 2 now. The release of Navalny? The withdrawal from Donbass or from the Crimea? "

What is needed is an overall concept. "To concentrate solely on Nord Stream now to put pressure on the Kremlin is probably not very effective and not honest on the part of the Americans," said Schmid. "Because they buy large quantities of oil in Russia at the same time."

Nord Stream 2: How Russia is bypassing the sactions with help of European countries

 An interesting investigation by german newspaper WELT:

US Secretary of State Antony Blinken never tires of repeating what top Washington officials have been saying for more than a decade. At the meeting with Germany's Foreign Minister Heiko Maas in Brussels two weeks ago, Blinken emphasized that the USA rejected the Nord Stream 2 gas pipeline. In an interview with NATO Secretary General Jens Stoltenberg, Blinken said that US President Joe Biden considers Nord Stream 2 to be a “bad idea”, bad for Europe and the USA. The American Secretary of State is expected to hold new talks in Brussels on Tuesday.

In a recent interview with the television broadcaster CNN, Blinken stated that there was no ambiguity in the American position: close German-American relations on the one hand, and a fundamental rejection of Nord Stream 2 on the other. The spokesman for the US Embassy in Berlin, Joseph Giordono-Scholz, also made it unequivocally: The White House "is determined to use all available levers to prevent the completion of Nord Stream 2".

It is more than clear: the USA wants to do all it can to prevent the eleven billion dollar project, which many critics between Kiev and Brussels describe as Russia's geopolitical project. The pipeline between Russia and Germany running on the bottom of the Baltic Sea is 95 percent complete and in the long term would make gas transit via Ukraine superfluous.

A weakening of Kiev has been in Moscow's interest since 2004 at the latest, when the country committed itself to the west course with the “Orange Revolution”. This is currently also proven by the Russian deployment on the Ukrainian border. In Berlin, however, the criticism has so far been restrained. From a German perspective, Russia's saber-rattling clearly has no impact on the future of Nord Stream 2.

At first glance, it would not take more than one last effort to complete the controversial project - if it weren't for the American sanctions that forced the Swiss service provider Allseas and its high-tech lay vessels to withdraw from the project. According to the US media, the Biden government is preparing a new round of sanctions. The content remains unknown so far. The target of these new sanctions could be Nord Stream 2 AG, the official builder of the pipeline, and CEO Matthias Warnig.

But at least the previous extraterritorial sanctions of the Americans, which triggered criticism in Germany, not least from Chancellor Angela Merkel, could be more holey than initially assumed. Despite intensive efforts by Nord Stream – 2 critics such as Poland, construction is progressing. Warsaw recently canceled the registration of two supply vessels registered in Gdansk and sailing under the Polish flag. These are said to have been involved in the construction of the pipeline.

But the special ship "Akademik Tscherski", which Russia intends to use for the completion of the pipeline, appears to be invulnerable to attacks by the opponents of Nord Stream 2. For almost a year, after his adventurous relocation of Russia's offshore projects on the Pacific to the Baltic Sea - at that time, Akademik Tscherski was sometimes accompanied by warships of the Russian Navy, it frequently changed course and destination, apparently to confuse the Americans - it has been commuting Ship between German ports and the Russian Baltic exclave Kaliningrad. In December, the German waterways and shipping administration said that the laying vessel was ready for use.

It was apparently retrofitted with European technology - despite sanctions, as the Russian-language service of Deutsche Welle reported with reference to Russian and German customs data from the ImportGenius database. According to this, Russian companies that have not appeared so far have purchased systems for pipeline construction from suppliers for a total of ten million dollars from the Netherlands and Italy, which the owner of the laying ship Akademik Tschersk had re-exported to Germany.

According to the research, suppliers such as Nuova Patavium srl from the northern Italian region of Veneto have split orders into individual deliveries that should have triggered US sanctions under the “Countering Russian Influence in Europe and Eurasia Act”. These remained below the sum of one million dollars - this was how it was possible to avoid attracting the attention of US authorities.

Thanks to such tricks, the construction of Nord Stream 2 continues undisturbed and fits into a long series of manipulations that are intended to lead US authorities astray. On paper, for example, Akademik Tscherski no longer belongs to the marine division of Gazprom since last year, but to an obscure infrastructure management fund from the Russian region of Samara, which previously belonged indirectly to the Russian energy company. Today it can no longer be proven that the fund is controlled by Gazprom, its real owners are unknown.

As reported by Russian media, the Fortuna lay vessel has completed half of the previously outstanding section of the pipeline in Danish waters. The section should be ready by the end of May, according to a message from the pipeline builder to Denmark's Energy Agency - partly with the help of Akademik Tscherski. The ship arrived at the construction site on Monday, as reported by Russian media.

This is good news for Mecklenburg-Western Pomerania's SPD Prime Minister Manuela Schwesig and her controversial “Foundation for Climate and Environmental Protection MV”. The organization, largely financed by Gazprom, which critics such as the FDP member of the Bundestag Alexander Graf Lambsdorff call "Fake Foundation", is supposed to promote climate and environmental protection projects in science and research, but also finance projects at daycare centers and schools. At the same time, the “completion of the Nord Stream 2 pipeline” is one of the goals of the foundation. That is a "temporary secondary purpose", says Erwin Sellering, head of the foundation and former Prime Minister of Mecklenburg-Western Pomerania.

A secondary purpose with far-reaching geopolitical consequences, as Sellering openly said in an interview with Deutschlandfunk Kultur, the foundation is supposed to be a kind of insurance policy for Gazprom. If the talks between the German government, the EU Commission and Joe Biden's government about the future of the pipeline should fail, they are “ready to help”. The Russian state energy exporter Gazprom is at least not making its tricks public - it does not seem to be a problem for a German state government to openly offer help to circumvent sanctions.

But this help could be unnecessary. Akademik Tscherski should start work shortly, then the construction work has reached the home straight: the last 120 kilometers in Danish waters, the most complex construction section of Nord Stream 2. The completion of the pipeline will then take a matter of months. According to Gazprom board member Viktor Zubkov, the pipeline will be completed this year: “It's a shame about the lost time, but that's how it happened,” commented Zubkov at a press conference.