Tuesday

7th Jul 2020

Germany to keep final say on Russia pipeline

  • New Russian pipeline already being laid in Baltic Sea (Photo: gazprom.ru)

Germany alone will decide whether to enforce EU law on its new gas pipeline with Russia, after France caved in during last-minute talks on the issue.

The legal regime to be imposed on the pipeline, called Nord Stream 2, will come from the "territory and territorial sea of the member state [Germany] where the first interconnection point is located", EU diplomats agreed in Brussels on Friday (8 February).

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  • Nord Stream 2 would concentrate 70 percent of Russian EU gas exports in Germany (Photo: Wikipedia)

Previous wording of the new law on offshore pipelines had said EU single market rules had to be applied on the "territorial sea of the member states".

The redacted wording meant European laws would have automatically covered all offshore pipelines in EU seas.

That would have forced Russian firm Gazprom to surrender its monopoly on Nord Stream 2, destabilising the project's business model.

It would also have legally barred Russia from using it to impose gas cut-offs on Western states, such as Poland and Ukraine, in its neighbourhood.

Leaving Germany the option whether to impose the EU laws on Nord Stream 2 might see Gazprom keep its monopoly.

But a spokesman for French president Emmanuel Macron said Friday's compromise still meant there was "European control".

"The dependence on Russian gas worries us. For that reason, it is important to us to ensure European control so that this dependence does not increase," he said in Paris.

"There is no French-German crisis," he added.

"Regarding the gas directive, we have reached an agreement and this was possible because Germany and France worked closely together," German chancellor Angela Merkel said the same day in Berlin.

The compromise was a climb-down for France, which had indicated on Thursday that it would back the tougher wording on automatic EU rules on offshore pipes.

"The deal received broad consensus," an EU diplomat said, amid preparations to start talks on the final version of the gas law with MEPs.

Opponents of Nord Stream 2 include most eastern EU countries, the Nordic states, and the UK.

Some among them were happy about the Franco-German compromise despite its softer wording.

The new gas directive still gave the EU commission a bigger say in areas other than Nord Stream 2, for instance, on future gas contracts between member states and non-EU countries such as Russia.

Friday's deal also meant the directive was finally moving toward adoption, after France and Germany had blocked it since November 2017.

"For a long time, the positions were quite diverse. Now that there's a compromise, this will one way or another reinforce the commission's [oversight] role," a diplomat from one anti-Nord Stream 2 EU country said.

The deal "allowed some [German] autonomy or specific national interests to be taken into account" on Nord Stream 2, he noted.

But it was "too early" to judge how Germany would wield its privilege, the EU diplomat added, amid divisions on the pipeline in Merkel's government.

Nord Stream 2 is to concentrate 70 percent of Russian gas sales to the EU in Germany.

Its opponents, including the US, say Russia has a track record of using gas-cut offs to "blackmail" its neighbours.

They also say it might embolden Russian aggression in east Ukraine, which Russia invaded in 2014, by making Ukraine's EU gas transit pipelines obsolete.

"If we want to have more strategic autonomy in this environment, then why should we make an exception on energy security?," the Nord Stream 2-critical EU diplomat said.

EU leaders recently agreed to aim for "strategic autonomy" in foreign policy and military terms, amid Franco-German plans for joint EU armed forces.

The US has threatened to impose sanctions on Anglo-Dutch, Austrian, French, and German energy firms who co-financed Nord Stream 2.

It has also posted troops as part of a Nato battalion to Poland to deter Russian aggression in wider Europe.

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