Germany offered US a deal to drop Nord Stream 2 sanctions

Monitoring Desk

A German environmental NGO claims Finance Minister Olaf Scholz offered to aid the import of liquid gas from the US if the Trump administration dropped threatened action against the Russian pipeline project.

The German government offered the Trump administration financial support of up to €1 billion ($1.21 billion) in a bid to prevent Washington from imposing sanctions on the Nord Stream 2 pipeline, according to documents published by the non-profit Environmental Action Germany (DUH) Tuesday.

The controversial pipeline, which is nearing completion, would double the amount of natural gas delivered annually from Russia to Germany.

What did Germany allegedly offer?

The DUH published a personal letter from German Finance Minister Olaf Scholz to former US Treasury Secretary Steve Mnuchin.

Scholz allegedly offered funding for the import of liquefied natural gas (LNG) from the US.

In return, the US was asked to allow the “unhindered construction and operation of Nord Stream 2.”

“The German government is willing to massively increase its public support for the construction of LNG terminals along the German coastline … by providing up to €1 billion,” the letter stated.

“Future legislation, which could be the basis for sanctioning Nord Stream 2, will either not be used or, in the case of compulsory sanctions provisions, blocked by waivers or other adequate and effective tools.” 

Scholz is a member of the Social Democrats (SPD), the junior partners in Germany’s coalition government. He is the party’s lead candidate in this year’s national elections. 

What were the political reactions?

Sascha Mueller-Kraenner, executive director of DUH called it a “scandal” and a “dirty deal at the expense of third parties.”

A number of opposition politicians also condemned the revelations.

“It is completely unacceptable that Olaf Scholz is trying to use taxpayers’ money to gold-plate US fracked gas in Germany while at the same time wanting to buy Nord Stream 2 out of US sanctions,” Green Party lawmaker Sven-Christian Kindler said in a statement.

Left Party politician Sevim Dagdelen called the offer of taxpayers’ money on the subsidized construction of LNG terminals “downright criminal.”

“You don’t make dirty secret deals with brazen blackmailers, even if they are in the White House or in the US Senate,” Dagdelen said. 

The Finance Ministry in Berlin did not initially comment on the matter, although a spokesman said a statement was being prepared.

What is the dispute over Nord Stream 2?

The DUH and other climate activists oppose the expansion of LNG infrastructure in Germany as well as the Nord Stream 2 project largely over potential greenhouse gas emission concerns.

The US and several eastern European countries fear the pipeline will increase western Europe’s energy dependency on Russia.

However, supporters of the gas pipeline have long accused the US of only wanting to sell shipments of domestically fracked LNG to European customers.

Criticism of Nord Stream has also grown in light of Russia’streatment of jailed Kremlin critic Alexei Navalny .

The planned route of the Nord Stream 2 pipeline by-passes Ukraine entirely, cutting the nation off from transit fees it gets from existing gas pipelines.

In an interview Tuesday with the German newspaper Rheinische Post, German President Frank-WalterSteinmeier defended the pipeline by saying that fuel sales were “one of the last bridges between Russia and Europe.”

He said this was all the more important as June would mark 80 years since Nazi Germany invaded the Soviet Union.

Ukraine’s ambassador to Germany said the remarks were met with “surprise and indignation” in Kyiv, as they ignored Ukranian victims of the Nazis.

Ukraine’s opposition to Nord Stream 2 also stems in part because Kyiv benefits by collecting transit fees from Russian gas shipped through existing pipelines to Europe. Nord Stream 2’s Baltic Sea routing will bypass Ukraine, sending that gas directly from Russia to Germany.

Courtesy: DW