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Nord Stream 2 | Treading the middle path

By lifting sanctions on the pipeline, Biden seeks to walk a tightrope on Russia

May 22, 2021 10:25 pm | Updated May 23, 2021 12:11 pm IST

FILE PHOTO: Workers are seen at the construction site of the Nord Stream 2 gas pipeline, near the town of Kingisepp, Leningrad region, Russia, June 5, 2019. REUTERS/Anton Vaganov/File Photo

FILE PHOTO: Workers are seen at the construction site of the Nord Stream 2 gas pipeline, near the town of Kingisepp, Leningrad region, Russia, June 5, 2019. REUTERS/Anton Vaganov/File Photo

Blood is thicker than water, so the saying goes, and apparently that applies to natural gas and geopolitical allies too. Contrasting sharply with former U.S. President Donald Trump’s attacks on NATO, the Biden administration has decided to stand down on sanctions slapped onto a company Nord Stream 2 AG, whose CEO and former East German intelligence officer Matthias Warnig is alleged to have links to Russian President Vladimir Putin. The reason? To avoid compromising Washington’s relationship with Germany over the Nord Stream 2 pipeline, a 1,230-km twin pipeline capable of doubling the capacity of extant channels transporting natural gas from Russian fields to Europe under the Baltic Sea.

While the latest half-measure highlights difficulties that President Joe Biden is facing in terms of adopting a hard stance toward Russia, the complexity of the geopolitics in play necessarily lends weight to a calibrated approach.

At stake are Washington’s ties with multiple European allies, who are critical to maintaining the balance of power in a unipolar hemisphere. Firstly, the Russian pipeline seriously impacts Ukraine, through which Russian gas currently has to pass en route to Europe. In bypassing Ukraine with a direct pipeline to Germany, Russia appears to be seeking to isolate the former from the broad swathe Western Europe and render it less relevant as an important player in the energy ecosystem. This move gains additional salience in the context of the Russian annexation of the Crimean Peninsula of Ukraine in 2014, following years of gas pipeline pricing disputes, since 2009. In a similar vein, Poland and Slovakia also oppose Nord Stream 2, as they, along with Kiev, until now collected transit fees on gas flowing through their territorial boundaries.

A more direct beneficiary of the pipeline will be Germany, where concern has been rising regarding falling European gas production in recent times. On the one hand, it appears that fears that this pipeline, which is already 95% complete, will tip Europe into a captive situation with Russia might be unfounded. While Gazprom, the Russian government-owned oil and gas giant that is a majority shareholder in Nord Stream 2 AG, is very much a key supplier for certain eastern and central European countries, Western European nations have obtained their gas supply from other countries, including Norway, Qatar, and African nations. At a broad level, the EU as such is seeking to tamp down on its reliance on natural gas in favour of clean energy.

History of skirmishes

However, German lawmakers have made it clear to the country’s Chancellor, Angela Merkel, that they disapprove of Russian heavy-handedness in dealing with domestic opposition to Mr. Putin, including the jailing of opposition politician Alexey Navalny in August 2020, and that outright support for Nord Stream 2 could undercut their concerns on allegations of human rights violation in this context.

From the perspective of the U.S.-Russia relations, there is on the one hand the long history of what the U.S. considers to be the malign influence of Moscow on American politics and national security interests. It begins at least as far back as the 2016 election, where Russia-linked operatives were suspected of a sophisticated, targeted disinformation campaign aimed at improving the odds of Republican presidential candidate Donald Trump winning the election against his Democratic rival and former Secretary of State Hillary Clinton.

Seeking to impose punitive action for Russia’s interference in U.S. elections, then President Barack Obama, in December 2016, ejected 35 suspected Russian intelligence operatives from the U.S. and slapped sanctions on Russia’s two major intelligence services, the GRU and the FSB, a move that invited retaliation from the Kremlin.

Mr. Trump, however, appeared to adopt a softer line toward cracking down on Moscow’s apparent aggression abroad. While his administration did not lift the sanctions imposed over Russia’s invasion of Crimea in 2014, and Mr. Trump approved the sale of lethal weapons to Ukraine and ordered missile strikes against Syrian military sites linked to strategic operations and allies of Russia, he also delayed implementation of U.S. Congressional sanctions and appeared reluctant to act on allegations of Russian cyber aggression and U.S. election interference.

Now it has fallen to the Biden administration to tread the middle path, retaining a sharp focus on punitive sanctions against Moscow’s most egregious actions abroad, while recognising the importance of Russia in areas of U.S. strategic interest, including the globally interconnected nature of energy markets. Such a path may not necessarily be easy to traverse. Notwithstanding the Merkel government’s warm welcome of Mr. Biden’s support for Nord Stream 2, Republican lawmakers lashed out at the White House for handing Mr. Putin a major political victory. Even Democrats appeared to differ, with Senator Bob Menendez, Chair of the Foreign Relations Committee, denouncing the decision as one that has “has created uncertainty in many corners of Europe”.

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