The day after the expulsion of the group of Russian diplomats from some European Union countries, Germany gives final approval for the construction of the Nord Stream 2 gas pipeline. As one of the managers of the Polish company wrote rightly, it was not possible to choose a worse moment for such a decision – writes Wojciech Jakóbik, editor-in chief of BiznesAlert.pl.
Germany’s agreement after Skripal
The Federal Office for Shipping and Hydrography gave consent to the arrangement of Nord Stream 2 in the exclusive economic zone of our western neighbor. Earlier, Germany has already agreed to run the bus over their territorial waters. This means that in this country the gas pipeline at issue already has all the necessary approvals to start work. It needs more – in Russia, Finland, Sweden and Denmark.
However, the signal from Germany is clear. The Russians can count on business as usual even after attempted murder with the use of chemical weapons in the European Union, i.e. after the Skripal case, after subsequent reports of cyber attacks and Russia’s interference in the elections in the West.
This is not the end of signals. Former Austrian Minister of Finance, Jorg Schelling, became a Gazprom consultant.
According to Oberosterreichischen Nachrichten, Schelling will consult the Nord Stream 2 project criticized in Poland and several other countries of Central and Eastern Europe. The former minister confirmed the revelations of the Austrian newspaper, but did not reveal any more about the nature of his employment in Gazprom.
The state-owned OMV is the financial partner of Nord Stream 2 AG, which is one hundred percent owned by Gazprom. It was Schelling who hired as the president of OMV Rainer Seele, who is now an active defender of the disputed project. Former minister and current president of OMV together visited Russia to talk about economic cooperation.
Nord Stream 2 is to achieve a capacity of 55 billion cubic meters annually and be ready by the end of 2019. Its partners, like OMV, count on cheap gas. Critics are afraid of negative political, market, legal and security impacts.
The project may still be delayed by Denmark’s decision to block consent in exclusive territorial waters due to arguments in the field of security and foreign policy, which is allowed by the newly adopted law. A new route, bypassing Denmark, could be painful. Sources of BiznesAlert.pl even talk about a year or longer delay. In this case, Gazprom and its financial partners from Europe to would have to increase expenditure on the project currently estimated at EUR 9,5 billion.
However, it would be more disadvantageous for Gazprom to sign a new transmission contract with Ukraine. The present ends in 2019, and in the past the Russians declared they would not sign a new one. Among other things, under the influence of Germany, they said that they would ensure a minimum level of supply, and the European Commission notified the participation in the negotiations.
The Polish Foreign Minister after the expulsion of four Russian diplomats said that after the Skripal case, it will be more difficult for the Russian side to defend Nord Stream 2. There has been a rash of optimistic comments after this statement. It turns out that despite a series of negative signals from Russia, Europe can not respond equally clearly. It did not remove its sanctions, but it did not introduce any new ones either, apart from symbolic expulsions. It is paralyzed by the Nord Stream 2 project, which – as the example of Schelling shows, but also the more well-known Gerhard Schroeder – may be corrupt in nature. Although Russia’s actions are increasingly worrying, some Europeans still prefer to make money on their dealings with Gazprom.
Meanwhile, Germany’s consent will theoretically allow the Russians to start the construction of the section on the territory of the country, that is in the European Union. This may make it difficult to include Nord Stream 2 as revised by the gas directive proposed by the European Commission. It was to lead to the subordination of investment to EU law. The revision was to concern new projects. The dugged Nord Stream 2 can be defined differently. Germans would probably make sure that it was not “new” anymore.