Will Germany have an impact on Nord Stream 2?

Against the background of the coronavirus pandemic collapsing energy prices, the fate of the Nord Stream-2 gas pipeline was once again of interest to the USA. Germany was faced with a choice that it had long tried to avoid.

Will Germany have an impact on Nord Stream 2?

Earlier News Front reported that a bill expanding punitive measures against companies involved in the implementation of the project “Nord Stream-2” was introduced in the U.S. Senate. The document was authored by Republican senators Ted Cruise, Tom Cotton, Ron Johnson and John Barraso, as well as Gene Shaheen of the Democratic Party.

According to the bill, now Washington can blacklist companies and structures that provide insurance assistance in the construction of the pipeline or legal support for the project.

As you know, back in December last year, a package of sanctions was dragged through the U.S. Congress together with the military budget. He touched on the companies directly involved in the construction. When the punitive measures came into effect, the Swiss company Allseas, which provided pipelayers and supply vessels, withdrew from the project. Construction was suspended in its final stage. The U.S. actions already caused a lot of criticism in the German government. However, Berlin did not retaliate.

German government coordinator for transatlantic cooperation Peter Bayer explained passivity by the fact that American sanctions are directed not against Germany, but against companies.

“Therefore, Germany will not retaliate. If this had happened, it would have happened only at the European level, but it will not happen either”, –  the politician said.

Based on this logic, the new U.S. sanctions are forcing the German authorities to react in a mirror image. If a set of punitive measures is adopted in Congress, the U.S. blacklist may include German government agencies.

According to the country’s Ministry of Economy, sanctions also apply to bodies providing “services such as testing, inspections or certificates required to operate Nord Stream-2”. Moreover, the sanctions will also apply to the officials who, upon completion of the construction, must issue a permit to put the pipeline into operation.

“It would be an innovation if sanctions were directed against [friendly] government agencies or directly against governments”, –  the agency noted.

German Foreign Minister Heiko Maas has already commented on the situation. According to him, Washington’s intentions have not affected Berlin’s plans.

“Our position on this project has not changed, and the options that are currently under discussion are extraterritorial sanctions, which I reject”, – said the diplomat.

The U.S. approach has also been criticized in the Bundestag, reports the Frankfurter Allgemeine. Fritz Felgentra, representative of the Social Democratic Party in the Defense Committee, called American politics “hegemonic”.

Head of the CDU/CSS coalition in the Foreign Policy Committee Roderick Kiesewetter also noted the “double standard” of the United States, which also buys Russian oil itself.

“They are financing Putin much more than the Baltic Pipeline”, – the parliamentarian said.

At the same time, the head of the Bundestag Committee on Energy, Klaus Ernst, offered to come forward with sanctions against American senators.

“Sanctions are a bad tool, especially in economic policy. But we should think about countermeasures, such as penalties for American LNG”, –  he said.

According to the politician, it is time for the German government “to stop throwing cotton balls, recognize the problem and finally start repelling attacks on German and European sovereignty.

Such high-profile statements by German politicians clearly demonstrate their dissatisfaction with American-German relations. However, is Germany willing to openly oppose the US?

“I’ll be perfectly frank: our firms have large commercial interests in the U.S., and the spiral of sanctions would not be to our advantage,” says the head of the Eastern Committee of the German Economy, Michael Harms.

He complained that the U.S. unilateral extraterritorial sanctions are a “great force” that “must be reckoned with. Harms hastened to assure that American pressure must still be fought, but, as reported by Deutsche Welle, he could not offer anything concrete.

Nevertheless, the expert community is confident that the construction of Nord Stream-2 will continue. It is important to understand that the project is financed by the largest German companies Wintershall and Uniper, French Engie, Austrian OMV and English-Dutch Shell. That is, it is their financial interests that are threatened by American sanctions. Even if Berlin does not risk responding to US pressure, it may well develop a mechanism to circumvent punitive measures.

“It’s similar to the story of getting out of a nuclear deal with Iran. At that time, the blow came to those companies – German, European – that were working with Iran in the context of this nuclear deal. The conversation was about the fact that somehow Europe needs to support its companies, because European states themselves did not withdraw from this deal”, –  explains Stanislav Byshock, Executive Director of the International Monitoring Organization CIS-EMO in his commentary to the “Baltnews”.

Instrument in Support of Trade Exchanges or INSTEX – is the name of the instrument that allowed EU countries to cooperate with Iran in circumventing U.S. sanctions. In April 2020, it became officially known about the successfully completed transaction. Thus, the European Union already has experience in circumventing American restrictive measures, which can be used again.

Moreover, according to the Polish portal “BiznesAlert”, Nord Stream-2 may be requalified for a hydrogen project. The Russian Gazprom has been studying this prospect for several years now and the German government has approved a ten-year strategy to promote the use of hydrogen, giving Nord Stream-2 new profitable prospects.

The program will cost Berlin 9 billion euros. Obviously, the authorities expect to recoup such large-scale plans. To this end, €2 billion will be spent to promote the use of hydrogen in developing countries, creating a large international network of potential supplies. The publication is confident that this will not only allow using Nord Stream-2, but also use it at full capacity.

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