Commentary on Political Economy

Thursday, 3 September 2020



Merkel faces calls to scrap Nord Stream 2 after Navalny poisoning

The Kremlin says the pipeline is a ‘commercial project that is in the interests of [Russia and Germany] and the energy security of the entire European continent’ © Anton Vaganov/Reuters

Angela Merkel is facing intense pressure to scrap the Nord Stream 2 gas pipeline project, which will transport gas from Russia to Germany, to punish Moscow over the poisoning of Russian opposition activist Alexei Navalny.

German MPs from across the political spectrum are demanding Berlin drop its support for the scheme, which is one of Russian president Vladimir Putin’s pet projects.

Politicians from both the opposition and chancellor Merkel’s own party, the CDU/CSU, insist that the pipeline project has no future following the attack on Mr Navalny, a prominent critic of Mr Putin who Germany said was poisoned with the novichok nerve agent.

“The only language that Putin understands is the language of natural gas,” said Norbert Röttgen, chairman of the Bundestag’s influential foreign affairs committee.

“Just saying we’re not going to talk about Nord Stream 2 . . . would be a complete vindication for Vladimir Putin,” he told German radio. “It would encourage him to continue these policies, because once again it’s been proven that he has nothing to fear from the Europeans.”

Russian opposition leader Alexei Navalny speaks to the media before a court session in Moscow in 2019 © Alexander Zemlianichenko/AP

The point was echoed by Katrin Göring-Eckardt, leader of the Greens in the Bundestag, who said Europe must make it clear that “Nord Stream 2 is no longer something we, together with Russia, can press ahead with”.

Meanwhile, Christian Lindner, leader of the liberal FDP party, said: “A regime that organises murders by poisoning is no partner for big co-operative projects — and that includes pipeline projects.” 

Dmitry Peskov, Mr Putin’s press spokesman, described the calls for a pullout as “emotional statements not based on concrete facts”. The pipeline, which is owned and will be operated by the Russian state-controlled gas giant Gazprom, is a “commercial project that is in the interests of both countries and the energy security of the entire European continent”.

Nord Stream 2, which will bring Russian gas across the Baltic Sea to northern Germany, bypassing Ukraine, has long been controversial, with critics claiming it will increase Europe’s dependency on Russia for energy exports.

The US imposed sanctions against companies involved in the project last year, prompting Swiss firm Allseas, which was laying the pipe, to pull out. Russia has vowed to complete the remaining 160km on its own.

new round of US sanctions sponsored by senators Ted Cruz and Jeanne Shaheen is now in the works, targeting any company facilitating the project, and potentially even German officials. German politicians have reacted angrily to the proposed sanctions, saying they represent unwarranted interference in German and European energy policy.

But the US measures have taken their toll. “Even before Navalny was poisoned, I was beginning to have big doubts that the pipeline would be completed — because of the US sanctions,” said Kirsten Westphal, an energy analyst at the SWP German Institute for International and Security Affairs.

The Navalny poisoning has added another layer of complexity. Germany said it would consult with its EU partners on an “appropriate joint response” to the attack. The rouble slumped amid fears that the EU would impose new economic sanctions against Russia.

Ms Merkel adopted a tough stance on the Navalny affair on Wednesday, condemning the poisoning “in the strongest terms” and demanding Russia explain itself. In recent months she has also sharply criticised Russia’s hack of the Bundestag’s computer system in 2015 and its failure to help German police investigating the assassination of a former Chechen rebel in the centre of Berlin last year.

Vladimir Putin meets German chancellor Angela Merkel in Meseberg, Germany, in 2018 © Steffen Kugler/Bundesregierung/dpa

But she has remained committed to Nord Stream 2. Asked last week whether Germany should pull out of the project in light of the Navalny incident, she said the two issues should be “decoupled”.

“It’s not appropriate to make a linkage between the Navalny issue and a project that is commercially driven,” she added.

That view is shared by the Social Democrats (SPD), junior partners in Ms Merkel’s governing coalition. “The debate has just become too narrowly focused on Nord Stream 2,” said Nils Schmid, SPD foreign policy spokesman. “And it’s not really honest, because stopping NS2 won’t change anything. Countries, including the US, will continue to import billions of dollars worth of oil from Russia.”

Mr Schmid said Europe should instead concentrate on “naming and shaming Russia, imposing sanctions on individuals, and proceeding with plans to adopt an EU Magnitsky Act”, which would allow for sanctions against human rights abusers worldwide. “We also need to make it clear that all talk of a strategic partnership with Russia is now over.”

German business has also spoken out in favour of Nord Stream 2. “We think it’s wrong to react to Navalny’s poisoning with further economic sanctions which would only hurt the Russian people and companies that have nothing to do with the matter,” said Oliver Hermes, head of the Committee on Eastern European Economic Relations, a business association.

Yet Ms Westphal said she believed the pressure for Berlin to pull out of Nord Stream 2 could prove irresistible.

“For the German government it’s always been this trade-off between energy policy, foreign policy and geopolitics. And now it’s looking like the geopolitical implications of Nord Stream 2 are beginning to outweigh the project’s energy benefits.”

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