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Nord Stream 2 a quandary for competing interests in EU

Christoph Hasselbach | Rosalia Romaniec | Miodrag Soric | Alexandra von Nahmen | Iurii Sheiko
February 4, 2019

About one-third of the Nord Stream 2 pipeline has been laid. There's growing opposition to the pipeline — including now possibly from France — and the EU is having difficulty figuring out how to deal with the project.

A Nord Stream 2 pipeline station in the Baltic Sea near the German island of Rügen
Image: picture-alliance/dpa/B. Wüstneck

Initially, it was mainly Ukraine and Poland that objected to Russia's plan for a second natural gas pipeline across the Baltic Sea. Jacek Czaputowicz, Poland's foreign minister, recently said the project "will kill Ukraine." 

Once Nord Stream 2 is laid, Russia will be able to supply a lot more natural gas to Germany directly, and from there to other countries. And Poland believes that when Russian gas no longer has to be exported via Ukraine, the country will no longer be guaranteed protection against further aggression from Russia. According to Kay-Olaf Lang from the German Institute for International and Security Affairs, Warsaw also sees the Nord Stream 2 pipeline as a symbol "of German disloyalty towards its eastern neighbor, and of a special relationship with Russia."

For a long time, this criticism was simply ignored in Berlin, but it has taken on another dimension since the United States also started exerting pressure. President Donald Trump has warned that Germany could become dependent on Russia for its energy, and the US ambassador in Berlin, Richard Grenell, has threatened sanctions if Germany keeps course. US officials are clearly losing patience: "Now is the time to negotiate," a high-ranking US government representative told DW. "Once the pipeline has been completed, Europe will lose its margin for maneuver with Russia."

But German officials say this is really about business interests. The US wants to sell its own liquid gas to Germany. The minister for economic affairs and energy, Peter Altmaier, hasn't ruled out importing from the United States, but only to supplement Russian gas, and only if the price is right.

Germany needs more Russian gas

Russia's strategic project

For Russia, the gas pipeline is a strategic project. The country has been pushing back against criticism, with  Gerhard Schröder, a former German chancellor who now manages the Nord Stream 2 project, doing much of the work.

Russia subsists, to a large extent, on its natural gas exports — and the Kremlin wants to keep the profits, not share them with other countries. It also doesn't want Ukraine, Poland and other countries to be in a position to interrupt supply. 

Moscow may be prepared to make concessions to Ukraine if criticism continues to grow, but only while the project is still under construction. Once the pipeline is completed, Russia will be in a position of strength, which will enable it to ignore not only Ukraine's interests but also those of other eastern European countries.

Former German Chancellor Gerhard Schröder and Russian President Vladimir Putin
Schröder has been criticized for his his frequent cozying up to Russia's PutinImage: picture-alliance/dpa/A. Druzhinin

Read more: Russia's Lavrov, Germany's Maas discuss gas pipeline at Moscow talks

Time is running out

Nord Stream 2 is also an issue for the European Union. The European Commission has the difficult task of finding a solution for the EU as a whole, given the conflicting interests involved. In 2016, EU energy commissioner Miguel Arias Canete actually said straight out that Nord Stream was not in the interest of Europe as a whole. The Commission isn't openly trying to block the pipeline project, but it does want to make it an EU project, meaning it would be subject to strict EU competition rules.

Any such decision requires the agreement of the European Parliament and the European Council of member states. The Commission has Poland and the Baltic countries on its side, as well as Britain, Denmark, Slovakia, Ireland, Sweden, Italy, Luxembourg and Croatia. Germany, Austria and the Netherlands, on the other hand, want to proceed with Nord Stream 2, preferably in its current form. Businesses from these countries are involved in its construction.

Baltic states oppose Nord Stream 2 pipeline

One deciding factor could be the position adopted by France, which is still considering the issue. France traditionally sides with Germany, and its energy supplier Engie is also involved in the Nord Stream 2 project. It's therefore likely that Paris will support the German position. If Paris votes against applying EU common rules to the project, or if it abstains, the Commission will fail to achieve the necessary majority.

Romania, which currently holds the presidency of the European Union, is trying to broker a compromise, but time is running out. European elections are happening in May. After that, a new EU Commission must be formed, and it probably won't be in place before November. Meanwhile, construction of the pipeline continues – and if Brexit happens as planned on 29 March, the Commission will lose, with Britain, one of the biggest supporters of making the pipeline into a common EU project.

Read moreNord Stream 2 pipeline row just got dirty

DW infographic: Routes of the Nord Stream gas pipelines in Europe

Blocking Nord Stream 2 does not seem realistic, but its opponents have for now at least won a partial victory. “Warsaw has succeeded in putting a project on the political agenda that for a long time was regarded as purely economic,” says the German Institute for International and Security Affairs' Kay-Olaf Lang. He comments that the opposition to Nord Stream 2 has contributed to it becoming an important element of the geopolitical discussion, not only in eastern Europe, but in Germany, too.

In particular, opponents of Nord Stream 2 see Chancellor Angela Merkel's comment in April 2018 as confirmation of their position. After a meeting with the Ukrainian president, Petro Poroshenko, in Berlin, the chancellor admitted for the first time that the gas pipeline was "not only an economic but also a political project." However, Wolfgang Ischinger, the chairman of the Munich Security Conference, has commented that this acknowledgment came very late in the day. Ischinger gave a newspaper interview in which he criticized the German government for not paying enough attention to the Eastern Europeans' concerns. For Poland, the Baltic states and Ukraine, this too confirmed their arguments. They’re hoping that Berlin will now listen to them after all.

Rosalia Romaniec
Rosalia Romaniec Head of Current Politics/Hauptstadtstudio News and Current Affairs@RosaliaRomaniec
von Nahmen Alexandra Kommentarbild App
Alexandra von Nahmen DW’s Brussels Bureau Chief, focusing on trans-Atlantic relations, security policy, counterterrorism@AlexandravonNah