Masks reset: the US openly betray Europe

13.05.2019

The US Senate for the first time drafted a bill on direct sanctions against Europe. The reason is the refusal to comply with the requirement to cease participation in the construction of the Nord Stream-2 Russian gas pipeline. What are the chances of imposing these sanctions and how does Europe react to such insolence of Washington?

Recently, it seemed that the US was almost ready to leave the Nord Stream 2 alone. After all, Europe agreed to impose restrictions on the use of this pipeline, approving the EU Gas Directive and applying to the project the conditions of the so-called Third Energy Package, which will limit the capacity of the pipe.

When they said in Washington that they would impose sanctions on the gas pipeline, many in Europe thought that new anti-Russian measures would soon appear that would hit Moscow again, and the Europeans were not seriously threatened. Sanctions pressure is not only direct. Washington also has the notorious law CATSAA (On Countering America’s Opponents through Sanctions), which implies the so-called secondary sanctions against companies and individuals cooperating with companies from Russia, Iran and the DPRK.

The application of this law today is possible, for example, to Turkey and India for the purchase of Russian S-400 Triumph missiles. Companies from Europe for the Nord Stream - 2 could also expect this. However, everything turned out differently: the US Senate prepared the first direct harsh sanctions against Europe for participating in the Russian project. That is what the Europeans did not believe until the end, but now it seems that the masks have been completely dropped.

Still, sanctions

According to the publication Foreign Policy, the US Senate will be a bill on sanctions against companies that help build the "Nord Stream - 2." The publication reports this with reference to a copy of the document at its disposal.

The important point is that the bill is bipartisan. Such a unity of sworn political opponents in the United States is really the case with the question of new sanctions against Russia, Iran, the DPRK or Venezuela.

At the same time, the senators are confident that Russia does not have the technological know-how to lay pipes on the bottom of the Baltic, which means that it is very easy to stop the project by scaring European companies that will simply leave the project. However, serious sanctions must be imposed for this. And then the senators decided not to waste time on trifles and punish those who are undesirable.

According to the bill, persons who continue to sell or rent ships for use in the construction of Nord Stream 2 will be banned from entering the United States, and any of their assets in the United States will be frozen. The bill also provides for a series of sanctions imposed on individuals who provide financial and technical support or provide insurance services.

Who is being hit? “Nord Stream - 2” is being built jointly by Russia and Europe, which divided expenses exactly in half. Gazprom took over the first half, and Uniper and Wintershall from Germany, the British-Dutch Shell, OMV from Austria and Engie from France took the second half. Just imagine the freezing of assets in the USA of such a giant as Wintershall or Engie.

However, there is no direct indication in the document that sanctions will be imposed on these companies in full, but senators are calling for “increased pressure” on them. But smaller contractors offer to punish in full. The inspections will be subjected to two European companies that have contracts for laying pipes and operating pipe laying vessels: the Swiss Allseas and the Italian Saipem.

In addition, the bill imposes a requirement on the US Secretary of State to act annually in Congress with a report on the activities of all companies related to the Nord Stream - 2. At the same time, banks and other credit organizations will also be assessed on whether they have violated the sanctions regime.

Europe sees light

In Europe, it is not the first month that opinions have been heard that the United States has turned from an ally into an adversary. The last time such comments were made in connection with the cancellation of the visit of Secretary of State Mike Pompeo to Berlin just a few hours before meeting with Chancellor Angela Merkel. Then the journalists recalled to Americans the sanctions against Russia, which are harmful to Europe, and the withdrawal from the agreement on Iran, and the withdrawal from the Paris Climate Agreement, and the introduction of trade duties on steel and aluminum against Europe.

Now, European politicians and officials of various ranks have reason to think again how profitable it is for Berlin, Paris, Brussels, Vienna and other capitals to be friends with Washington.

The representative of the operator Nord Stream 2 AG Jens Muller has already given an interview to the Turkish agency Anadolu. In it, he assured that the sanctions will not help the United States to prevent construction, since all companies operate strictly in accordance with the laws and there is nothing to punish them for.

This logic is easy to understand. There are European companies that, in accordance with European laws, do business in the European territory. Therefore, US sanctions are completely illegal, but Washington has never been concerned with laws when its personal plans and strategies are at stake.

Austrian Chancellor Sebastian Kurtz said he will continue to support Nord Stream 2, despite opposition from the United States.

What's next?

The two-draft Senate bill has so far only been developed and not even submitted to the House. All threats remain on paper. It is obvious that in the process of passing a document through a US bureaucratic machine, some rules may be changed. And the Americans will not decide on the full program to impose sanctions on the largest European energy concerns, at least because of their serious influence on the European and global economy.

But. Nord Stream 2 was a red rag for Eastern European countries, which in the European Parliament voted to restrict the project or cancel it altogether. The outcome of the fierce debate was a compromise version - the adoption of the Gas Directive, which restricts pumping through the pipeline. No one got what they wanted - the opponents of Russia did not succeed in stopping the project, and the supporters of the gas pipeline now cannot rely on 55 billion cubic meters of gas per year, that is, at full capacity of the pipe.

The document allows supervisory authorities to limit the capacity of the pipe to 50% of its capabilities. That is, the pipeline will go not 55 billion cubic meters per year, but only 27.5 billion cubic meters. And it halves the profitability, profit, reduces the effect for the European market by half. For the internal market of Europe, gas is cheaper, the more it comes.

And it is absolutely clear that the United States pushed through an unfavorable solution to Europe in order to increase the competitiveness of its gas in the EU market. That is, Europe has already gone to meet the Americans, has agreed to act to its own detriment, but Washington still wants to punish it with sanctions.

However, there is another reality. Chancellor Merkel will be remembered by Europe not only because of the problem of migrants, but also because of the energy revolution in Germany. The country's transition to green energy is Merkel's personal project. And it is impossible without gas from Russia, because coal-fired heat and power plants and nuclear power plants continue to close in Germany, this process is already irreversible.

It will be easier for Europeans to come up with workarounds, hire other companies, work through nominees, but complete the energy sector reform in Germany, and indeed in Europe. Therefore, the project is needed above all by Europe itself.

In Russia, there is no doubt that when the Old World will need not 27.5 billion cubic meters of gas per year, but all 55 billion cubic meters, then no Third Energy Package will stop the progress. 

And from a purely political point of view, Europe should seriously think about who, in reality, is its true enemy. After all, it was directly said - US sanctions against Europe.