The European Commission may impose sanctions against Russia because of the Navalny case, but Brussels refuses to decide the fate of “Nord Stream – 2” instead of Germany itself. Experts believe that Berlin found itself in a delicate situation, as it unofficially guaranteed the project’s support in exchange for the preservation of Ukrainian transit. Moscow has fulfilled its promise.
The head of the EU diplomacy Josep Borrel published a statement that the European Commission may impose new sanctions against Russia because of the Navalny case. At the same time, Brussels will not decide the fate of “Nord Stream – 2”, he said.
“We can expect that Navalny’s poisoning will have an impact on Russia-EU relations. Some say it will affect “Nord Stream – 2”. I will say again: it is beyond the capabilities of the pan-European bodies. The European Commission has never been enthusiastic about this gas pipeline, which, from the viewpoint of the EC, cannot be considered an important priority in infrastructure development. However, this (“Nord Stream – 2″) is something that applies to specific EU members that have promoted the project,” the EU diplomacy head said in a statement.
Last week the German government allowed Nord Stream 2 to stop and Gazprom is now preparing to complete it. German Chancellor Angela Merkel herself, as DPA reported, held a closed meeting of the ruling parties’ faction at which she suggested that the fate of the Baltic gas pipeline should be decided at the European level.
“The European Union made it clear that it would not link Nord Stream-2 with the Navalny case. It’s up to Germany to decide whether to impose a moratorium or cancel it altogether. That’s why it’s Germany, not the EU, whose dishonest game Russia may see. Especially taking into account the agreements to preserve the Ukrainian transit after 2019,” Katya Yafimava, a leading analyst at the Oxford Institute for Energy Studies, wrote on Twitter.
The existence of informal arrangements between Angela Merkel and Vladimir Putin was hinted at in November 2019 by German Foreign Minister Heiko Maas. “Ms. Federal Chancellor many months ago clearly told President Putin that the implementation of alternative gas transit through Ukraine in the future will be a very important topic. And Putin made some promises to her,” the German Foreign Minister said at a press conference talking about Naftogaz Ukrainy and Gazprom’s negotiations on gas transit through Ukraine.
Recall that in late December, the companies signed a five-year contract to transport gas through Ukraine. The Russian side undertook to supply 220 billion cubic meters of gas through Ukraine by 2025 and to pay $6.98 billion for this.
At the same time, Gazprom undertook the obligation to evenly transit 178 million cubic meters of gas per day on a “swing or pay” basis when the contracted volume is paid, not the actual volume. Of all the existing Ukrainian directions is the most expensive. The same Polish transit costs “Gazprom” four times cheaper.
The more unpleasant, obviously, for Moscow is the situation when Berlin can give up its promises on the “Nord Stream – 2”. Russian Foreign Minister Sergei Lavrov has already stated that Russia now needs insurance in case of joint projects with Europe.
“Unfortunately, the European Union has chosen to sacrifice its geo-economic, strategic interests to meet the immediate desire to keep up with the U.S. in what is called “Russia’s punishment. We are used to it. Now we understand that all our future plans, I mean the possibility of returning to a full-scale partnership with the European Union, we must build necessarily using a “safety net,” – said the head of the Russian Foreign Ministry in the program “Moscow. Kremlin. Putin” of the TV channel “Russia”. Then Sergey Lavrov canceled his visit to Germany, which was to take place yesterday, September 15.
“There was an informal agreement between Russia and Germany,” Igor Yushkov, a leading analyst at the National Energy Security Fund (FNEB), believes. – Gazprom signs a 5-year transit agreement with Ukraine, thus proving that “Nord Stream – 2” is not a political project. That is, it is not built to deprive Ukraine of transit money, which is interpreted by the West as Russia’s desire to punish Ukraine. Plus, the transit agreement allows us to remove a part of the financial burden on Ukraine’s maintenance from Europe and transfer it to Russia. In response, Germany had to guarantee that there would be no sanctions against Nord Stream 2 and that the gas pipeline would be completed.
The expert notes that the Germans actually recognized the existence of such agreements when there was a dispute between Germany and the United States about new sanctions against the Baltic gas pipeline. “German politicians openly said: ‘We have done everything that you (USA) demanded from us: forced Russia to sign a transit agreement with Ukraine and are building LNG receiving terminals, so why do you continue to press on the ‘Nord Stream – 2?
Against the background of the history with Navalny, politicians – opponents of the Baltic gas pipeline – have become more active in Germany, but the support of the project remains in the ruling parties, Spiegel notes. Yesterday, both the Austrian President and the Chancellor announced the need to complete the gas pipeline construction. There is no discussion in Germany why the story with Navalny coincided with the time when the completion of Nord Stream-2 is to be resumed. But they already raise the question that the ban may cost Germany a lot. The lawsuits against the project participants, pipeline owners, and future gas recipients will total tens of billions of euros. At the same time, it will not be easy to cancel a project that is 94 percent complete. It has all the permits and cannot be closed for political reasons.
“Experts believe that there will be a need for a separate banning law, which should still be carried through the Bundestag. Also, the Federal Grid Agency may postpone issuing a permit to launch the already constructed gas pipeline. However, formally, it is independent and does not obey the government,” Spiegel noted.
Before Navalny, the biggest threat to Nord Stream 2 was considered to be the U.S. intention to extend sanctions to the project. They are planned to be adopted in November and December in the U.S. defense budget for next year. The sanctions apply to all types of vessels involved in the project, insurance and certification organizations, and even ports. American senators even wrote letters to Germany, and the U.S. Treasury Department held video conferences with project investors. Washington tried to intimidate Europeans with future sanctions but caused the opposite reaction. This was followed by a story with Navalny.