https://www.bloomberg.com/news/articles/2020-06-25/germany-weighs-measures-against-u-s-over-nord-stream-sanctions
Germany Weighs Measures Against U.S. Over Nord Stream Sanctions
Germany is preparing to strike back against the U.S. if President Donald Trump follows through on his threat to kill off the Nord Stream 2 gas pipeline with additional sanctions.
Chancellor Angela Merkel’s administration is considering pressing for coordinated European Union action, according to two German officials familiar with the discussions. An economy ministry paper seen by Bloomberg News said such measures by the U.S. would be new and could hit significantly more German and European companies and banks as well as state agencies.
The 1,200-kilometer (745 mile) pipeline under the Baltic Sea, designed to pump Russian gas directly to Germany, has triggered deep division between EU member states. But the prospect of a direct U.S. intervention in the 27-member bloc’s energy interests should prompt a collective response, the officials said on condition of anonymity.
The new German strategy adds the possibility of further escalation between the transatlantic allies, with the U.S. this week announcing potential tariffs on $3.1 billion of products from Germany and other European countries. Trump has also reiterated his intention to cut the number of U.S. troops in Germany and renewed a threat to hit the German auto industry with a new set of levies.
Trump has made Nord Stream, owned by Gazprom PJSC, one of his main targets in his periodic attacks on Merkel and the German government. He revived the verbal salvoes this month, saying Germany is “delinquent” on defense spending and dispatching “billions” to Vladimir Putin.
“We’re supposed to protect Germany from Russia, but Germany is paying Russia billions of dollars for energy coming from a pipeline,” Trump told a rally last week in Tulsa, Oklahoma. “Excuse me, how does that work?”
U.S. sanctions signed by Trump that targeted pipe-laying vessels in December threw the pipeline’s completion into disarray. While German officials said the project would merely by delayed, new measures proposed by U.S. senators could put Nord Stream in permanent danger, the German officials said.
But any response, including sanctions, would have to be weighed carefully, one official said. With Trump’s poll numbers sagging four months ahead of the U.S. presidential election, he could follow through on previous tariff threats -- notably on German autos, the official said.
German Economy Minister Peter Altmaier issued a warning over the legality of the new measures earlier this month, signaling that imposing them could bring a new low to transatlantic relations.
“The German government has long had the view that sanctions with extraterritorial effects are in conflict with international law and that they’re not a contribution to advancing international cooperation,” Altmaier told reporters in Berlin on June 12. “This position hasn’t changed.”
Bundestag lawmakers on the economic affairs committee discussed potential retaliation against U.S. sanctions in a June 17 meeting. The committee chairman, Klaus Ernst of the anti-capitalist Left Party, said parties were in agreement that such measures violated international law.
“The government is called upon to develop and put forward proposals for a measured, clear reaction on behalf of Germany and the European Union,” Ernst said in a statement after the closed-door meeting.
German industry is concerned that the new raft of sanctions may prompt counter sanctions in Europe, which it opposes on the strength of U.S.-EU trade ties and traditional allegiances, Michael Harms, the managing director of the BDI lobby’s East European Committee, told reporters last week. Some 670 companies from 25 nations have worked on the pipeline, according to Harms.
Gazprom, which has vessels docked off Germany’s Baltic coast, is set on completing the pipeline in the face of U.S. resistance. It made a request with authorities in Copenhagen to operate so-called DP3-class vessels in Danish waters.
The Akademik Cherskiy, a vessel that Russia could use to build the remaining stretch of the gas-export link, arrived at a German Baltic port last month after a trip from the Sea of Japan that took two months. The ship is a DP3-class pipe-laying vessel, according to Esperis Consulting, a Warsaw-based energy consultancy.
The German ministry paper said it was unclear how the Russians planned to proceed with some 150 kilometers remaining for the pipeline. A target for completion in early 2021 would require construction to resume this summer, the paper said.
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