Every January, the supervisory boards of Germany’s biggest companies traditionally receive polite notes wishing them all the best for the new year. But the letters that two large German firms received a fortnight ago from the US ambassador were more an economic threat than pleasant greeting.
Ambassador Richard Grenell warned chemicals company BASF and energy firm Uniper that they risk sanctions if they continue their involvement in the Nord Stream 2 gas pipeline project.
“While the United States does not comment on specific future sanctions actions, we continue to stress that firms operating in the Russian energy export pipeline sector are engaging in activities that carry significant sanctions risk,” the letter warned.
Although BASF and Uniper have made no public comment, sources inside the companies say the letters were regarded as threats. The companies sought guidance from the German foreign ministry and were advised not to reply. The ministry itself has made no official statement about the letters.
According to newspaper Bild am Sonntag which first broke the story, Grenell sent several similar letters to German companies and that he had Washington's support in doing so. A spokesperson for Grenell told the newspaper that the letters should not be considered threats - rather they were “a clear message” about US policy.
Nord Stream 2 will run for 1,200 kilometers beneath the Baltic Sea. The project is being managed by the Russian state-owned energy company Gazprom, with financial contributions from Uniper and Wintershall in Germany, Engie from France, Austria’s OMV and Royal Dutch Shell. The pipeline should be completed by the end of 2019.
But the project has long been controversial. Several eastern European countries, Poland and Ukraine in particular, have criticized it. Most Russian gas exports to western Europe currently pass through Ukraine, giving the country some leverage over its neighbor. Germany has supported the pipeline project for years even though last month, the European Parliament passed a non-binding resolution calling for the project to be cancelled.
The Trump administration has repeatedly said that the pipeline gives Russia too much power over Europe’s energy supply and that it threatens eastern European countries. Skeptics say this is far from the US’ only motivation and that in fact the US wants to promote sales of its own liquefied natural gas in Europe.
Bypassing Grenell, going straight to Washington
Since becoming ambassador last May, Grenell has succeeded in antagonizing many German politicians and diplomats. He has used social media to warn German companies to avoid dealing with Iran, and has appeared to offer support to European right-wing parties.
The US ambassador has already been to four meetings in the foreign office where senior staff have made it clear they would like to improve the relationship. In person, Grenell is said to have been conciliatory, but then has continued his public provocations.
Behind closed doors, German diplomats have quietly commented that they don’t think Grenell really understands the role. As a result, they have preferred to bypass the Berlin office and deal directly with their counterparts in Washington instead, where talks about subjects like Iran and Nord Stream 2 have apparently proceeded in a “professional” way.
Speaking to German business groups operating in eastern Europe just last week, Foreign Minister Heiko Maas criticized US sanctions threats, saying that, “European energy policy should be decided in Europe, not in the US.”
Jürgen Flauger covers the energy market for Handelsblatt, international market developments and energy policy. Formerly Handelsblatt's Washington correspondent, Moritz Koch is now a political editor in Berlin. To contact the authors: [email protected], [email protected]