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."

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