In Ukraine crisis, Germany faces tough decisions over Nord Stream 2 – EURACTIV.com

Germany could find itself in a no-win situation if Russia invades Ukraine, pitting Berlin’s main gas supplier against its most important security allies.

Chancellor Olaf Scholz would face pressure from the United States and other Western allies to respond to any invasion by halting the commissioning of the recently completed Nord Stream 2 pipeline between Russia and Germany.

But that would risk exacerbating a gas supply crisis in Europe that has been widely blamed on a shortage of gas flows from Russia and which has sent European energy prices skyrocketing.

The price spike has hit businesses and consumers across the region hard, including low-income workers in Germany whom Scholz’s Social Democrats (SPD) are counting on to vote.

“Germany is between a rock and a hard place,” said Marcel Dirsus, nonresident researcher at the Institute for Security Policy at the University of Kiel.

“The Scholz government wants to keep Americans happy because they are Germany’s most important allies outside of Europe. But they don’t want to annoy the Russians either. It’s hard to do.

Russia has massed troops near its border with Ukraine and demanded security guarantees from the West, but denies plans to invade its former Soviet republic.

Any invasion would be likely to trigger new international sanctions against Russia, with measures against Nord Stream 2 widely seen as one of the most powerful ways to pressure Moscow.

But Scholz, who replaced Angela Merkel as chancellor late last year, is already facing disagreements within her coalition government over the scope of German sanctions against Nord Stream 2 if Russia attacks the Ukraine.

The Greens would like to scrap the project, which is still awaiting regulatory approval, as they oppose fossil fuels. They also want to send a clear signal to Russian President Vladimir Putin that military aggression abroad and undemocratic practices at home will not be rewarded with gas deals.

Business-friendly Free Democrats (FDP) have also signaled that they prefer a tougher approach to Russia.

Scholz hopes to find a compromise that will satisfy both his coalition partners and senior party officials, such as Defense Minister Christine Lambrecht, who said that Nord Stream 2 – which passes under the Baltic Sea and bypasses the territory Ukrainian – should not be dragged to Ukraine. crisis.

The German regulator, the Bundesnetzagentur, is in charge of the certification of the Nord Stream 2 gas pipeline, a process which began last September and is expected to last six months. Once the German regulator has completed its inspection, the authority will send a draft decision to the European Commission, which will also have a say.

Moratory?

The European Union’s most populous country and largest economy risks appearing divided, and Scholz risks appearing weak if he does not show strong leadership in the crisis.

“Scholz seems too passive and absent,” said Gwendolyn Sasse, senior fellow at Carnegie Europe, suggesting he should try to play a bigger role in the EU.

The SPD sees itself as the natural heir to Germany’s pioneering “Ostpolitik” policy of openness to the Soviet Union in the 1970s. But other European countries want Germany to do more to project the Europe’s influence and protect Eastern neighbors who fear what they see as Russian aggression.

Scholz could have his eye on opinion polls that show around 60% of Germans support Nord Stream 2, said Thorsten Benner of the Global Public Policy Institute (GPPi).

“For Scholz, there is also a concern for fairness: the United States is a major importer of Russian crude but has not committed to stopping imports while Germany should cancel Nord Stream 2,” Benner said. .

Energy prices in Germany in December were up 69% compared to December 2020. Russian military action in Ukraine could push them even higher.

“In the event of an invasion, we would see wild spikes in gasoline prices. All bets are off,” said Hanns Koenig, energy analyst at Aurora Energy Research.

The government would then face pressure to provide subsidies to low-income Germans and manufacturers who rely on gas for production, further straining public finances already strained by the coronavirus crisis.

Some European politicians say Russia can do more to lower prices and consumer bills in Europe, and have accused Moscow of using the energy situation for political purposes.

“Natural gas flows from Russia are at historically low levels,” Koenig said. “Russia is prioritizing routes it owns and sending far less than it has historically across others.”

Russia denies manipulating supplies, and Russian Foreign Minister Sergei Lavrov told German Foreign Minister Annalena Baerbock this week that Western attempts to politicize the Nord Stream 2 project would be “counterproductive”.

Dirsus said Scholz was unlikely to kill the project but could impose a moratorium on it if there was an invasion.

“It will be a step designed to show the Americans and other allies that Germany is responding, but at the same time they will send a signal to Russia that the project could still be revived,” he said.

(Editing by Georgi Gotev)

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