Germans Reject Proposed US Sanctions on Russia Gas Pipeline Project, Call For EU Protection Measures

By James Carstensen | December 18, 2019 | 5:12pm EST
The Nord Stream 2 gas pipeline’s sector in northeastern Germany. (Photo by Tobias Schwarz/AFP via Getty Images)
The Nord Stream 2 gas pipeline’s sector in northeastern Germany. (Photo by Tobias Schwarz/AFP via Getty Images)

Berlin (CNSNews.com) – German Chancellor Angela Merkel and business executives here are criticizing a U.S. defense policy bill that incorporates sanctions targeting a controversial gas pipeline between Russia and Germany – a project which the Trump administration and some countries in eastern Europe say serves only to increase the continent’s dependence on Russian energy.

“We are against extraterritorial sanctions,” Merkel told lawmakers in the Bundestag on Wednesday, adding that “decisive discussions” with the U.S. would be needed to explain Germany’s disapproval of the sanctions. She did not elaborate on what that would entail.

German Eastern Business Association chairman Oliver Hermes called on the government to begin working with the European Union to develop instruments designed to prevent U.S. intervention in the Nord Stream 2 project.

“If we don’t give a clear stop signal here, we are in danger of being pushed around by non-European powers in the long run,” he said in a statement. “It is much more than a single economic project – the U.S. decisions would be a fundamental attack on the sovereignty and self-respect of the E.U.”

The FY 2020 National Defense Authorization Act, passed by the U.S. Senate on Tuesday, contains provisions targeting foreign vessels and company executives linked to construction of the pipeline, with the power to revoke or block visas of foreign individuals or block their property and interests in the U.S.

The Association of German Mechanical and Plant Engineering, in a response similar to Hermes’, called for a plan to protect European companies from the sanctions.

“In Berlin and Brussels, we finally need to discuss how to protect European companies from extraterritorial sanctions, regardless of which country they are from,” said the association’s managing director, Thilo Brodtmann. He added that Germany, as one of the largest exporting countries in the E.U., must take the initiative in this regard.

The E.U. – like the United States – has warned Germany in the past against an overdependence on Russian energy. Rather than trying to ban Nord Stream 2 outright, however, the E.U. revised regulations in February to bring part of the pipeline under its regulatory umbrella.

Despite its concerns about the pipeline, the E.U. also opposes extraterritorial sanctions.

E.U. Trade Commissioner Phil Hogan reiterated last week that the E.U. was in principle opposed to the imposition of any sanctions on E.U. companies that do “legitimate business.”

The 764-mile pipeline Nord Stream 2 pipeline, like the existing Nord Stream system, will channel Russian natural gas to Germany along the Baltic Sea bed, bypassing a transit pipeline running through Ukraine.

The U.S., along with Ukraine and some other eastern European countries, is concerned that the pipeline, which is expected to double existing Nord Stream gas supplies from Russia to 110 billion cubic meters a year, will increase European dependency on Russian energy.

The pipeline entered its final stage in October, with 186 miles remaining to be completed.

Both the U.S. and Ukraine also have economic interests at stake, The U.S. wants to sell domestic liquefied gas in Europe, and Ukraine depends on lucrative transit fees it obtains as a result of Russian pipelines passing through its territory.

Jürgen Trittin, a lawmakers with the Greens, denounced what he called “aggressive” U.S. measures aimed at Nord Srtream 2, and charged that they “apparently serve only one goal – to encourage U.S. energy dominance.”

Ukraine’s 10-year gas transit deal with Russia, which has kept Europe supplied with Russian gas, is due to expire on December 31. Talks to strike a new deal have so far been unsuccessful.

Ukraine reacted positively to the threatened U.S. sanctions, which Kyiv hopes may delay Nord Stream 2 long enough to provide it with stronger leverage in its negotiations with Russia.

Russia, while remaining confident the pipeline will be completed, criticized the U.S. for what it said was unfair competition, in breach of international law.

Kremlin spokesman Dmitri Peskov accused the U.S. of “expanding its artificial dominance to the European market.”

“Such actions do not please Moscow or the European capitals; nor Berlin or Paris,” the Interfax news agency quoted him as saying.

When asked whether the sanctions could impact Nord Stream 2, Peskov replied: “We expect this project to be completed.”


 

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