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A few days after meeting with German Chancellor Angela Merkel in the White House, government officials have reached a deal that would allow the final construction of “Nordstream 2”, a Russian gas pipeline that runs under the Baltic Sea and into Germany, according to Reuters. This represents a reversal in American policy, which had up to the moment opposed the building of the pipeline and saw it as a tool that could then be used by Putin to increase its influence on Europe.
The decision comes months after the Biden administration had waived U.S sanctions to the companies that were involved in the construction of the project. A move that Secretary Blinked defended as necessary to “rebuild relationships with our allies and partners in Europe”. Today’s tacit approval of the completion of Nordstream 2 contradicts Blinken’s assurances that the administration’s opposition of Nrodstream 2 is “unwavering”.
The construction of the pipeline had been a point of tension between Berlin and Washington D.C for years. The latest development would prove to be one of the last policy victories for outgoing Chancellor Angela Merkel, whether it is a crowning achievement or a stain in her legacy is still up to decide.
Why is Nordstream 2 such a contentious issue?
The pipeline has been a geopolitical conundrum between the U.S, Germany, Ukraine, and Russia. With the first two countries expressing concerns (both diplomatic and economic) about the project, and the latter two pushing for it in the name of economic efficiency.
America’s opposition to the project (both during Obama and Trump) is based on the possibility that Putin can simply threaten to cut the gas supply to Germany if Berlin wants to oppose any policy spoused by the Kremlin, and Ukraine opposes the project since it would lose a significant amount of revenue as the pipeline that is currently used passes through the country.
For Germany, is all about economic necessity: the pipeline, which is 90% complete, is projected to bring 55 billion cubic meters of gas directly to Germany, according to the state-owned Russian oil company Gazprom.
While the whole of Europe is a prime consumer of Russian gas, Germany is addicted to it, with 40% of its total gas coming directly from Russia. The construction of Nordstream 2 would be a wonder for the supply of natural gas to Germany, as it could double the current amount of gas that flows towards Germany.
Russia would benefit both economically and geopolitically, the first one is fairly obvious as Gazprom would be more able to sell more gas to one of its key buyers in the region. However, by being the main supplier of gas of the most important country in the EU, the Kremlin has the ability to pressure Berlin to not oppose Moscow’s political intentions. Russia has done this before when it cut gas to Ukraine during the 2014 Crimea crisis.
What does the agreement says?
According to reports by the Wall Street Journal, the deal reached by the U.S government and Germany would: ensure $50 million in investment in green technologies in Ukraine, Germany would encourage energy talks under the Three Seas initiative, make sure that Russia continues to pay transit fees to Ukraine, and the U.S reserves its right to levy sanctions in the future if Russia uses the pipeline to coerce Europe.
The agreement, in theory, would make sure that Ukraine remains earning money through their existing pipeline, while also leaving the U.S the ability to levy sanctions on the pipeline if they think Moscow is using it to expand its influence. However, the agreement has yet to specify how to ensure the Russians will simply not pay once they stop using the Ukrainian pipeline.
Another concern that the construction of the Nordstream 2 pipeline brings is that it takes away one of the few leverages that Ukraine has over Moscow in its geopolitical struggle. Since Europe will no longer need the Ukrainian pipeline to get a majority of its gas, they would have fewer incentives to defend the Kyiv government if and when a crisis arises and pits them against the Putin government.
This agreement will certainly be seen with dread in Kyiv, especially after the West publicly rebuked President Zelensky when he announced that Ukraine would become a Nato member, a claim that both Biden and NATO dismissed. A few months ago, Ukraine was also in a state of alarm as Putin menacingly mobilized thousands of troops to its borders.
President Biden had to make a choice: Please its german allies by allowing them to get more Russian gas in the hopes of mending America’s relationship with the EU, risking the European energy security and upsetting Ukraine in the process or try its best to prevent the construction of Nordstream 2, curtailing Putin’s influence, while upsetting the Germans.
Although Biden has kept fiery rhetoric against Putin’s regime, even calling him a killer, the facts show that Biden has decided to let Russia gain a potentially crucial piece of leverage on Europe, which could hamper the ability of the U.S to coordinate a response towards an expansionist Moscow.
In the meantime, Ukraine looks with fear how its leverage towards Russia and its Western allies diminishes. Surely, other American allies that are facing a menacing neighboring power will also take note.
Daniel is a Political Science and Economics student from the University of South Florida. He worked as a congressional intern to Rep. Gus Bilirakis (FL-12) from January to May 2020. He also is the head of international analysis at Politiks // Daniel es un estudiante de Cs Políticas y Economía en la Universidad del Sur de la Florida. Trabajo como pasante legislativo para el Representate Gus Bilirakis (FL-12) desde enero hasta mayo del 2020. Daniel también es el jefe de análisis internacional de Politiks.