June 15, 2020
US and Germany step up fight over NordStream 2
One of the big stories in Germany over the weekend was the outrage by the grand coalition about proposed US sanctions against Germany over NordStream 2. This follows the decision of a bipartisan group of US senators to introduce a bill, the protecting Europe's energy security clarification act, to sanction companies involved in the project.
We see zero sign of movement by the Germans. Yesterday, the German government expressed its dismay that the US would go that far. What we noted in the coverage of FAZ is a widespread misunderstanding in Germany. German politicians seem to attribute the US position to the election campaign and the increasing desperation of Donald Trump. But these latest sanctions have been proposed by a bipartisan group of senators. A president Joe Biden is not going to see this differently, and Trump's lasting legacy is that he has introduced a framework under which such sanctions are possible.
In Germany, there is cross-party support for NordStream 2. 96% of the pipeline was physically completed before the Trump administration stepped up its threats. The Russians said that they will study the proposed US legislation, but see no reason to stop the project. While the Swiss-based company that constructed the pipeline pulled out under heavy US pressure, the Russians have promised to complete the remaining work. We think this conflict will come to a head at some point this year.