1st Mar 2021

EU queries state aid in German-Russian gas deal

EU competition commissioner Neelie Kroes has asked the German government to explain why it has offered a financial guarantee for a plan to build a €5 billion gas pipeline between Russia and Germany.

"The commission has requested information from the German authorities so that we can verify that any state support is fully compatible with the EU state aid rules," said Ms Kroes' spokesman according to the Financial Times.

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The commission wants to know whether the guarantee to cover €1 billion of the project's cost is equivalent to state aid and if it is, whether it was granted within the rules of EU state aid subsidies.

The Brussels regulator has the right to inspect all large state aid payments made by EU governments and can block them or demand repayment if it finds they were granted illegally.

Ms Kroes' letter was sent on April 20 and Berlin is expected to reply later this week.

Ribbentrop-Molotov Pact

The 1,200 km pipeline is currently under construction and will link Russia to Germany under the Baltic Sea, bypassing states which maintain problematic ties with Moscow such as Poland, the Baltic states and Ukraine.

The project, agreed by former German chancellor Gerhard Schroder and Russian president Vladimir Putin in 2005, has sparked repeated criticism from Poland and Lithuania which say Germany should have consulted fellow EU member states.

Last week, the Polish defence minister, Radek Sikorski, compared the German-Russian gas pipeline to the 1939 Hitler-Stalin deal partitioning Poland.

EU energy commissioner Andris Piebalgs has also criticised the gas project.

Warsaw wants an EU pipeline

Meanwhile, Polish prime minister Kazimierz Marcinkiewicz will travel to Berlin today (9 May) to propose turning the Baltic Sea gas pipeline into an EU-wide scheme with the participation of several EU countries, including Poland.

Mr Marcinkiewicz will also meet German chancellor Angela Merkel.

"The French, British and the European Commission like our idea at first glance," said Mr Marcinkiewicz's foreign affairs advisor Richard Schnepf, according to the Polish press.

He said the move would give Poland a seat on the board of the pipe consortium, limiting the Kremlin's chances to manipulate Russian gas supply to the EU for political reasons.

German foreign affairs chief Frank-Walter Steinmeier on Monday said that the planned centre for German WWII exiles in Berlin, the Baltic Sea pipeline and the closure of the German labour markets are the biggest problems for German-Polish relations today.

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