How Trump will punish Merkel for Nord Stream 2

13.03.2019

The United States continues to regard the Nord Stream 2 project as a political project, with the help of which Russia will allegedly put pressure on the whole of Europe. Washington’s position is very tough, so there has long been talk of future sanctions against the gas pipeline and German companies. Finally, there is some clarity on this issue, and Donald Trump himself introduced it in his own unpredictable manner.

As a cunning businessman, who has fought all his life for domination in the high-risk real estate market, Trump behaved radically and on the issue of Nord Stream 2. He said that Germany would greatly regret it, if it did not refuse to “help the Russians”, since the gas pipeline project allegedly contradicts the “security shield” for Europe, which is provided by the United States. In short, there are a lot of arguments here.

However, what sanctions in reality threaten Nord Stream 2 and Germany and what will be the consequences of their introduction?

The prospect of sanctions was written on the eve of the Wall Street Journal, which believes that Nord Stream 2 is a project that destroys the alliance of the USA and Germany and threatens the security of the whole of Europe. This conclusion is drawn not only on the basis of the argument already familiar to us that the gas pipeline will become the new political weapon of Russian President Vladimir Putin. The publication recalls Angela Merkel’s visit to the United States a year ago, where she had her talks with Trump in the Oval Office of the White House.

The newspaper writes that Merkel allegedly gave the command of her delegation not to touch "Nord Stream - 2", to avoid talking on this topic and to avoid direct answers to questions.

A year has passed since then, however, despite Trump's position, the construction of Nord Stream 2 continued, and European companies are taking part in the project with the support of Gazprom. The newspaper separately emphasizes that this is the Russian state monopoly.

This fact has exacerbated the contradictions and shows that an attempt to isolate Russia with the help of sanctions does not lead to the rallying of the allies in the Western coalition, but on the contrary - separates them, the newspaper notes.

And now, after fruitless attempts to convince Germany to abandon the project, a logical continuation ensues - the United States is preparing to impose sanctions. As one of the officials of the Trump administration told the newspaper, the US president believes that Nord Stream 2 contradicts the concept of the European “security shield” that America provides to Europe.

One of the German officials told the Wall Street Journal that the US sanctions against Germany because of the "Nord Stream - 2" will be an unprecedented new measure. First of all, this will mark the beginning of the confrontation of the United States with all of Europe. However, Trump has long been on this path.

“German officials say that Germany will perceive sanctions as aggression against another member of the North Atlantic Alliance. This is likely to widen the split between the US and Germany, created by Washington’s desire to improve trade with the continent, abandoning the Iranian nuclear deal, Trump’s tariff threats and Germany’s demand to increase its military spending, ”the newspaper writes.

In the situation with the “Nord Stream - 2”, Gazprom partners must come under the blow. US officials said that they would apply the law on so-called secondary sanctions, which are introduced for cooperation with sub-sanctioned companies and individuals.

In Europe, they are such giants as Engie (France), Royal Dutch Shell (Britain and the Netherlands), Uniper, Wintershall AG (Germany) and OMV AG (Austria). Gazprom covers about 50% of the construction costs of Nord Stream 2, and the rest is divided between these companies. If US sanctions are imposed against them, then all expenses will fall on Gazprom’s shoulders. Will this strangle a gas pipeline project? No, and here's why:

According to Russian officials, whose statements summarizes the Wall Street Journal, Gazprom will be able to buy out the shares of other companies in the project, and then the Russian gas giant will easily complete the construction of the pipe itself. The latter fact was also confirmed by European officials. They motivated this by the fact that Trump was already late - the most difficult part of the project was left behind. Gazprom also admits that if European investors are lost, Russian banks can invest in the project, as well as Chinese capital.

Thus, the “North Stream - 2”, as the Trump administration officials said, will turn into a “pure Kremlin endeavor,” and Merkel will be in a delicate situation when she will have to defend the Russian project entirely and simultaneously with the support of US sanctions against Russia.

There is only one conclusion: the US sanctions for Nord Stream 2 are not an obstacle, because Merkel will still support the project even in these delicate conditions for himself. The thing is that the German power industry has already been rebuilt under it and it is impossible or very expensive to reverse this process.