German-US deal on Nordstream 2 pipeline fails to bridge European divides

A bilateral agreement between Washington and Berlin over the Nord Stream 2 gas pipeline from Russia to Germany has ended a long-running dispute between the two NATO allies over the Kremlin-backed infrastructure project.

But Wednesday’s accord, struck in the wake of German Chancellor Angela Merkel’s… visit to the White House failed last week to bridge deep-seated dividing lines in Europe over the pipeline or satisfy critics who say it is a geopolitical weapon that the Kremlin will use to undermine Ukraine and increase its influence over the EU’s energy supply .

Nord Stream 2, due to launch later this year, will pump 55 billion cubic meters of gas under the Baltic Sea, allowing Kremlin-controlled gas exporter Gazprom to reach customers in Germany and elsewhere in Europe without using pipelines through Ukraine.

A divisive project

Ever since Gazprom first applied for permits to begin construction on Nord Stream 2 in 2015 – a year after Russia annexed Ukraine’s Crimea peninsula – Ukraine, Poland and other eastern EU countries have feared The influence of Moscow on Europe’s energy supply have condemned the project.

They say it will be used by Russian President Vladimir Putin to both rob Kiev of up to $2 billion in annual fees it earns pumping Russian gas to Europe through its Soviet-era pipelines, and to reduce Moscow’s share of increase European gas imports, which the Kremlin could do. use as a bargaining chip in geopolitical negotiations.

In 2019, the US passed legislation imposing sanctions on European companies working on the pipeline, much to the anger of Germany and the EU commission, which saw the move as an unprecedented extraterritorial intervention in European energy policy, and acidifying bilateral ties between Berlin and Washington.

Security promises and cash

While the Joe Biden administration has maintained US opposition to Nord Stream 2, the president has made rebuilding relations with NATO partners such as Germany a priority.

Under the deal, announced days after Merkel’s last visit to Washington as chancellor, the US will: revoke his sanctions against the pipeline in exchange for promises from Berlin to protect Ukraine and Europe from possible Russian threats.

In particular, Berlin has pledged to impose measures, including restricting Russian energy imports if the Kremlin tries to “use energy as a weapon or carry out further aggressive actions against Ukraine”.

The deal also sees Germany appoint a special envoy to help Moscow renew a 10-year gas supply agreement through Ukraine that expires in 2024, and make an initial donation of $175 million to Kiev as part of a $175 million fund. 1 billion to accelerate Ukraine’s shift from coal to renewable energy projects. Berlin will also provide $70 million to improve the security of Ukraine’s energy infrastructure.

Nord Stream Map

‘Superficial and insufficient’

But long-standing critics of the project were unmoved by those promises from Berlin. Foreign ministers of Ukraine and Poland said in a joint statement that the proposals were “superficial and cannot be considered sufficient to effectively mitigate the threats posed by Nord Stream 2”.

“We call on the United States and Germany to adequately address the security crisis in our region, of which Russia is the sole beneficiary,” they said, adding that Kiev and Warsaw would continue to work with allies to oppose the pipeline. .

Slawomir Debski, head of the Polish Institute of International Affairs, a state-backed think tank, said the agreement would “create a huge security hole on NATO’s eastern flank, particularly in Ukraine”.

Wednesday’s deal, Debski added, was the latest example of an inability to “convince Germany that maintaining peace on NATO’s eastern flank was more valuable than its relations with Putin’s Russia.”

Ukrainian officials said they were not in favor of trading US sanctions for theoretical German responses to possible Russian actions. “First of all, Ukraine’s national sovereignty and security concerns require specific guarantees and concrete implementation mechanisms,” said Yuriy Vitrenko, chief executive of Ukrainian state gas company Naftogaz. “The current US sanctions regime remains the primary deterrent to continued Russian aggression in Ukraine.”

Selling ‘A Bad Deal’

Despite the agreement with Germany, the US State Department has said it still believes Nord Stream 2 is “a bad deal” for Europe. One US official described it as “making the best of a bad hand”.

But despite that, Washington and Berlin now have to convince Kiev, Warsaw and other opponents of Nord Stream 2 that the agreement is the right way forward for Europe and Ukraine.

Merkel on Thursday dismissed the idea that the deal was a sign that Ukraine and Poland had a lower priority for Berlin than Russia. She said the intent was not to erase the differences between Berlin, Washington and others, but rather to provide a way to manage lingering disagreements. She said Germany would be ready to impose sanctions on Russia if necessary and said that “we are not without tools to do something”, adding that it was important that Germany always had talks with Russia.

Much will depend on talks over the next month ahead of Ukrainian President Volodymyr Zelensky’s meetings with Biden at the White House on August 30, and Berlin’s ability to convince critics that it can be trusted to defend interests.

In a phone call between Merkel and Putin on Wednesday night, the two leaders “touched up the possibility” of extending Ukraine’s gas transit agreement beyond 2024, the Kremlin said in a statement.

But Ukraine and its supporters will want more than just words from both Berlin and Moscow to allay their concerns about Nord Stream 2’s impact.

“There is a fundamental problem. It has to do with the fact that we still don’t understand if Russia is ready to fulfill its obligations and it has to do with Ukraine’s security,” Ukrainian Foreign Minister Dmytro Kuleba said in televised comments on Thursday.

“America and Germany agreed on something. But we all understand that the main benefactor of this crisis created by [Nord Stream 2] is the Russian Federation.” he added. “And this is the biggest problem. . . on which more needs to be done.”

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