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Germany stops Nord Stream 2 pipeline to meet with Russia

BERLIN – As recently in December, Olaf Scholz, the chancellor of Germany, referred to the new natural gas pipeline linking Russia to the German coast as a “private sector project” with absolutely no role in the economy. political discussions.

Last month, Mr. Scholz was puzzled when asked if he would repeat President Biden’s assertion that Nord Stream 2 The project will be stopped if Russia invades Ukraine.

But just hours later President Vladimir V. Putin ordered the Russian armed forces to cross the border into the breakaway regions of eastern Ukraine, Mr. Scholz made it clear that he had willing to sacrifice the project. This, when Germany is facing worst energy since the 1970s, and business leaders have warned that high fuel prices could threaten the industrial strength of Europe’s largest economy.

“The situation today is fundamentally different,” Mr. Scholz told reporters early Tuesday. “That’s why, before the latest developments, we also have to re-evaluate this situation. That includes Nord Stream 2, by the way.”

For years, Germany refused to jeopardize its energy trade with Russia in response to Moscow’s worst excesses because it dependent on Russian natural gas to keep its houses warm and plants running. In 2014, after Russia annexed Crimea, Berlin assured that its gas purchases would not be interrupted by any sanctions against Russia.

Some political observers said the abruptness of Mr Scholz’s move on Tuesday was remarkable.

“I think Moscow didn’t expect it to happen so quickly,” said Janis Kluge, a senior associate at the German Institute for International and Security Affairs.

“This is really something that was basically unthinkable just a few weeks ago,” she said. “The conundrum in German business and politics has always been that gas supplies from Russia will always be there in any crisis.”

Started under Mr. Scholz’s predecessor, Angela Merkel, the pipeline has caused tension between Germany and its partners in Europe and the United States. Senator Ted Cruz of Texas and others in Washington found a way pause building itwas finally completed at the end of last year.

Since November, The pipeline’s approval process has stalledpending the establishment of a subsidiary based in Germany to comply with European law.

Mr. Scholz said he had ordered his Economy Minister, Robert Habeck, to withdraw the paperwork that considered the pipeline a necessary part of Germany’s energy supply.

Mr. Scholz said: “Nord Stream 2 could not have come into operation without this certification. The approval process will now be scrapped and the Department of Economy will have to review it before the project can be resumed.

During weeks of discussions about possible sanctions against Russia, Scholz steadfastly refused to discuss plans to build an $11 billion pipeline, and wanted the Kremlin to speculate on what to expect. how Berlin might respond to Russian violations.

Germany’s attitude has changed after months of downsizing gas stations from its longtime supplier.

Since the end of November, Russia has been unwilling to sell Germany any natural gas beyond the amount agreed upon in long-term contracts, despite record-high spot natural gas prices. . It also allowed natural gas levels in the storage facilities Gazprom owns in Germany to drop to record lows.

Some officials in the Kremlin mocked the German decision.

“Then,” said Dmitri A. Medvedev, deputy chairman of Russia’s security council on Twitter. “Welcome to the new world where Europeans will soon pay 2,000 euros for every 1,000 cubic meters of gas!” (That’s almost twice the current rate.)

That claim is “complete nonsense,” replied Ursula von der Leyen, president of the European Commission. on CNN.

Dmitri Peskov, Putin’s spokesman, said Russia regrets Berlin’s move, emphasizing Moscow’s position that the project “has nothing to do with politics”.

“This is a commercial, economic, above all mutually beneficial project, meant to be a stabilizing factor for the European gas market,” he said.

Mrs. Merkel often uses similar words to describe the project, and for weeks it appeared that Mr. Scholz had no intention of changing that position. But his tripartite government – consisting of the liberal Liberal Democrats and environmentally conscious Greens, as well as his centre-left Social Democrats – has focused on German energy policy repositioning and emphasized reducing the country’s dependence on Russian natural gas.

Jen Psaki, the White House press secretary, said the German chancellor’s decision was made in conjunction with Mr Biden, who for weeks had emphasized in public that any move by Russia towards Ukraine would be possible. effectively terminate the pipeline.

“We consulted closely with Germany during the night and welcomed their announcement,” Ms. Psaki said via Twitter.

Many observers of European politics also welcomed Mr. Scholz’s decision as an opportunity to re-establish the German-Russian energy partnership, a relationship that since the days of the Cold War has been untouchable. in terms of foreign policy.

“For me, this is real leadership at a pivotal time,” speak Jana Puglierin, head of the European Council on Foreign Relations in Berlin.

The response from the country’s industries, many of which have been forced to scale back production because of high energy costs, has been more muted.

The main lobbying organization representing German industry, the BDI, warned on Monday that rising energy costs “threaten to destroy the economy.”

The association declined to comment on Tuesday.

But Mr Habeck, a member of the Greens, stressed that a military conflict would force energy costs to rise even further. “I want to emphasize that war raises prices,” he said.

Germany’s Eastern Business Association, which represents companies doing business in Russia and other countries in Eastern Europe, urged Mr Scholz and the European Union to “act with caution”.

“Common interests can act as a lever for understanding,” said Oliver Hermes, president of the association. “The door to dialogue is not firmly closed.”

Wintershall Dea, a German oil and gas company that is one of five European companies to finance half of the cost of the Nord Stream 2 project, also warned of the far-reaching economic consequences that a clash military action between Russia and Ukraine will cause. beyond the energy range.

“In addition to causing terrible human suffering, an escalation would set our entire continent back for many years,” a spokesman said. “And, with it, the European and Russian economies. When considering the economic consequences, it would be a mistake to focus solely on the topic of natural gas supply and gas pipelines. ”

https://www.nytimes.com/2022/02/22/business/nord-stream-russia-putin-germany.html Germany stops Nord Stream 2 pipeline to meet with Russia

Fry Electronics Team

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