Germany first Berlin committed to Nord Stream 2 as it divides Europe

The closer the Nord Stream 2 pipeline comes to reality, the louder those opposed to the Russian mega-project become. Even Berlin’s ruling parties are seeing backlash but the country is still on board.
Quelle: dpa
Just as complicated as it looks.

If all goes according to plan, the Nord Stream 2 pipeline, intended to double the amount of Russian natural gas pumped to western Europe, could be up and running as early as next year.

Yet with each step closer to completion resistance grows. The €9.5-billion ($10.8 billion) project, owned by the Russian state-owned gas company Gazprom and co-funded by European energy companies Uniper, Wintershall, OMV, Engie and Shell, is not only opposed by Poland, Ukraine and the Baltic States but also the European Commission and European Parliament.

In public, senior managers at Nord Stream 2 seem relaxed about the massive infrastructural undertaking. In practice, however, they are pushing hard to create facts on the ground before opposition grows stronger.

Donald Trump’s administration also wants to disrupt the pipeline. As the current US ambassador to Berlin told Handelsblatt: “Why should we give Putin more power over Europe?” In July, Trump went so far as to call Nord Stream 2 a tragic mistake and that Germany’s gas and oil purchased from Russia made it “captive” to the country.

However, keeping Russia in check is not the United States’ only agenda. The country wants to boost overseas sales of liquified natural gas, of which it is one of the main global producers.

Now, the US is threatening to impose direct sanctions on companies participating in the massive project, a move set to anger Europeans, even those opposed to the pipeline. To many, this would mark another attempt by the US to impose its own laws and conditions on other countries' trading.

Despite all this, the German government has remained steadfast in its commitment to the project.

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Solid backer

Germany's foreign office argues that the Nord Stream 2 is crucial to improving Germany's energy security. The economy ministry has said that limiting Russian gas exports to Europe was not "rational politics."

Even the finance ministry has come out in favor of the pipeline saying Russia's dependence on foreign currency is greater than Germany's dependence on Russian gas. In other words, the pipeline will do little to expose Berlin to blackmail from overseas. It says the energy supply will actually be a stabilizing force in European-Russian relations.

Yet, some German politicians have shown signs of a re-think. Anngeret Kramp-Karrenbauer, the new head of the CDU, said it would be "too radical" to cancel the project, but said it was still possible to control how much gas was imported through the pipeline.

Jürgen Hardt, the foreign policy spokesman for the center-right Christian Democratic Union, said that "given the political situation, Nord Stream 2 investors need to ask themselves whether their money is well invested - or whether they should get out." He also added that Germany must take neighboring countries' concerns into consideration.

Ukraine, which shares a long history of gas quarrels with Russia, fears the pipeline, which would circumvent land-based links in the country by running underneath the Baltic Sea, will cut into transit fees it charges Russia to pump natural gas across its territory.

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A foreign policy spokesman for the center-left Social Democrats, Nils Schmid, agrees with Hardt's sentiment: "We reacted too late to criticism of the project from other countries."

For years, Berlin argued that the Nord Stream 2 is fundamentally about business, not politics. This annoyed its allies in Eastern Europe, who feel the pipeline is a transparent move to reassert Russian power and gain a chokehold over Europe’s gas consumption.

An economic necessity

Only in May did the government change its tone, acknowledging the political problems associated with the pipeline, especially to Ukraine. However, German Economy Minister Peter Altmaier said the project can be justified if Ukraine's "vital interests are preserved at the same time."

Supporters of the pipeline say Germany needs Russian gas more than ever. Germany's three biggest suppliers of natural gas are currently Russia, Norway and the Netherlands. In 2030, the Netherlands plans to turn off the gas taps; Norwegian exports are also dwindling. When the Nord Stream 2 pipeline reaches peak capacity, it will supply approximately the same quantity of gas exports to Germany as from the three suppliers.

For many German observers, Russian gas imports are a necessary economic resource, all the more so since the country is in the process of shutting down coal-fired power stations. Although the goal is ultimately to escape fossil fuel production, gas is essential as a medium-term stop-gap.

Moritz Koch is a political editor for Handelsblatt in Berlin. Klaus Stratmann covers energy policy and politics for Handelsblatt in Berlin. To contact the authors: [email protected], [email protected]