2021.08.05 17:45

‘Europe has a Germany problem’. What will the deal on Nord Stream 2 mean for Eastern Europe?

Andrius Balčiūnas, LRT.lt2021.08.05 17:45

The United States and Germany have signed a deal on the Nord Stream 2 pipeline. The EU promised sanctions on Russia if it tries to blackmail Ukraine, however, Germany and the US may have little power to hinder Russia’s economic and political goals.

The US has firmly opposed energy projects between Russia and the EU for decades and the Trump administration had imposed sanctions on companies involved in the development of the Nord Stream 2 gas pipeline. However, the two countries still reached an agreement on July 21.

“This is a bad situation and a bad pipeline but we need to help protect Ukraine and I feel that we have made some significant steps in that direction,” said US Under Secretary of State for Political Affairs Victoria Nuland.

Washington’s and Berlin’s deal envisaged sanctions against Moscow if it decides to use the pipeline for coercive means, and also states the goal of preserving the existing gas transit via Ukraine.

“That’s a very empty promise. How can they [the US and Germany] ensure that? The US and the UK couldn’t ensure Ukraine’s territorial integrity under the Budapest memorandum,” said Kalev Stoicescu, a research fellow at the International Centre for Defence and Security (ICDS) in Estonia.

He pointed out that the West failed to keep its promise to protect Ukraine in exchange for the country agreeing to give up its nuclear arsenal.

“Now, when Chancellor Merkel was asked on how she will guarantee this, she said that she has Putin’s promise. Is Putin’s word a guarantee in global matters now?”

The US acknowledging the completion of Nord Stream 2 and signing the deal can complicate Transatlantic renewal with the Biden administration.

“The US will not mend its relationship with Europe by signing this agreement with Germany. I don’t think this agreement was signed to restore Transatlantic relations,” Kristine Berzina, a senior fellow at the German Marshall Fund of the United States, told “I’d say it has more to do with a pragmatic approach that one of the two Nord Stream 2 lines was already completed, and the second one will be completed soon.”

Washington had little power to stop the construction since the first Nord Stream 2 line was already completed in June, Berzina added. Germany could have cancelled the project, however, it chose to proceed with the pipeline.

With this deal, the US and Germany are grasping for “the last straw” while trying to protect Ukraine and maintain Transatlantic relations, Berzina believes.

Washington and Berlin have also committed to starting a fund of 1 billion US dollars for Ukraine to diversify its energy sources away from Russia. However, it will not be enough to ensure Ukraine’s energy independence, according to Stoicescu.

“If this were the price that Russia had to pay in the future, that they get Nord Stream 2, but the whole process would lead to Ukraine’s energy independence, with the help of the West. Maybe that could be it,” said Stoicescu. “I just fear that the process towards Ukraine’s energy independence would be very long and painful, and that Russia would use Nord Stream 2 as a lever over Ukraine, over us, over all of Europe.”

Europe’s problem

The deal between the United States and Germany on the Nord Stream 2 pipeline was a “mistake”, according to Lithuanian Foreign Minister Gabrielius Landsbergis.

Lithuania, Latvia, Estonia, Poland, and Ukraine all opposed the completion of the pipeline running under the Baltic Sea.

Eastern European countries had grown to distrust Germany, and could for a while rely on the US to defend their interests, Berzina said.

“The whole of Europe has a Germany problem that the US won’t be able to fix. [...] If Germany wants to be a leader in Europe [...] how does it see the consequences for its actions on everyone? There are ambitions, and the desire to become the dominant voice in the EU's foreign affairs, but no attention is given to the consequences,” said Berzina.

Russia previously did not exceed more than 70 percent capacity of the already operational Nord Stream pipeline. Moscow may now say that the existing sanctions are preventing it from ensuring full gas deliveries.

“They couldn’t even fill the first pipeline with gas. Russia will have a lever over EU sanctions, which will also include gas evaporation in the Arctic,” said Stoicescu. “Then they will come and say ‘look, Nord Stream 2 is ready, but we don’t have gas since you imposed sanctions on us, there are no investments coming from the West [...]. It’s an endless circle.”

Moscow’s victory?

The German government insisted that Nord Stream 2 was a purely commercial affair. The energy project was also supported by German gas companies.

It is naive to believe that Russia would not have any political goals, Stoicescu said.

“Nothing Russia-related revolves just around the economy, there are always political goals as well. The West believes that, despite disagreeing with Russia on political matters, we can do business. That’s not how Russia thinks, it’s all related to their political goals,” said Stoicescu. “The deal is done now, and sadly it is just another example of our biggest allies making deals with Russia over our heads. We can only hope that we won’t have to suffer for this in the future.”

Russia will use the division in the West to its advantage, finding suitable partners in the German government for economic and political gain, according to Berzina.

“This will lead to further use of economic tools to achieve economic and foreign policy goals. This is Moscow’s victory, and Europe should be worried about it,” said Berzina.

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