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[Andreas Kluth] Nord Stream 2 could sever trans-Atlantic ties

US President Donald Trump is furious at Germany for many reasons, not all of them fathomable. In phone conversations with Angela Merkel, he’s allegedly called the German chancellor “stupid” and denigrated her in “near-sadistic” tones. Though this be madness, there is -- on rare occasions -- method in it. One such case is Nord Stream 2.

It is an almost-finished gas pipeline under the Baltic Sea between Russia and Germany, running next to the original Nord Stream. “We’re supposed to protect Germany from Russia, but Germany is paying Russia billions of dollars for energy coming from a pipeline,” Trump roared at a recent campaign rally. “Excuse me, how does that work?”

One of his grievances is that Germany has long been scrimping on its military spending, in effect free-riding on US protection, for which he wants to punish his “delinquent” ally. Another is that the European Union, which he considers Germany’s marionette, allegedly takes advantage of the US in business. Trump also wants to sell Europe more American liquefied natural gas.

But Trump isn’t the only American trying to stop Nord Stream 2. In December, Congress aimed sanctions at a Swiss company that supplied the ships to lower the pipes into the water. Then Russia sent another vessel to finish the job. So a bipartisan group of senators moved to widen the sanctions in order to kill Nord Stream 2 altogether.

The problem is that if this new round becomes law, it will amount to an all-out economic assault on Europe. It could hit individuals and companies from many countries that are only tangential to the project.

Considering this an instance of illegal American extraterritoriality, the German government now plans to make the EU retaliate against the US. Trump, in the heat of America’s “silly season” leading up to November, could then strike back with new tariffs on German cars or a full-blown trade war. The transatlantic alliance, which was already frayed, is close to tearing.

To me, this situation increasingly resembles “chicken,” a classic in game theory. The question is whether both sides are merely feigning recklessness or are already too far gone. And that applies just as much to the Germans. They like to play the reasonable side in transatlantic fights but deserve just as much blame as Trump and Congress for causing this mess.

If Russia were a normal country, the German rationale for this pipeline might make sense. Europe will need more gas, especially to replace much dirtier coal on the way to becoming carbon-neutral. And to get that gas, it makes sense to diversify -- between Norwegian imports, American LNG or any other sort, including the Russian stuff. And piping it into Europe along the shortest route -- through the Baltic -- is efficient.

But Russia is far from a normal country. It has for years been waging hybrid warfare in Europe, ranging from disinformation campaigns to aggression in Ukraine. At Germany’s urging, Russia recently extended a contract with Kiev to keep piping gas through Ukraine for several more years. But in the longer term, the new pipeline gives Russia dangerous geopolitical and strategic options.

With two pipelines through the Baltic and another big one through the Black Sea, Russia could in the future cut all central and eastern European countries out of billions in transit fees. The country already controls almost 40 percent of the EU’s gas market even without Nord Stream 2. Once that goes online, the rest of Europe may become too dependent and therefore vulnerable to blackmail. When Trump calls Germany “a captive to Russia,” he has half a point.

This is why Poland and the Baltic republics of Latvia, Lithuania and Estonia also oppose Nord Stream 2. As NATO’s eastern front line and former victims of invasion and aggression, they fear Russia more viscerally than Germans do nowadays. Psychologically, the Poles distrust any deal between Germany and Russia over their heads, because it reminds them of the Molotov-Ribbentrop Pact of 1939, which carved up their region between Nazi and Soviet spheres of influence.

My question to the Germans, then, is why they have for years been deaf to these strategic concerns by their partners in NATO and the European Union, while coddling their own pro-Russian business lobbies.

German intransigence looks even more unsavory when considering who within Germany is most passionately in favor of the pipeline. Support for it skews sharply to the left, with its long tradition of anti-American and pro-Russian leanings. The most egregious example is Gerhard Schroeder, a Social Democrat who was Angela Merkel’s predecessor as chancellor. He’s always been buddies with Russian President Vladimir Putin. These days he also chairs the supervisory board of Nord Stream, which is owned by Gazprom and thus controlled by the Kremlin, as well as the board of Rosneft Oil, a Russian oil giant.

Schroeder testified to the Bundestag that Germany and Europe should prepare tough countermeasures against US sanctions. He won support from The Left, a party that descends from the former regime in East Germany.

Nord Stream 2 was and is a terrible idea. It’s a geopolitical project disguised as a private business deal. It has shown Germany to be an insensitive and naïve ally, and the US to be a truculent one. It is now rending what little remains of their former relationship. If there is any way to leave these pipes buried and forgotten under the sea, all involved should discreetly and diplomatically search for it. Otherwise, this game of chicken will end the way it’s not supposed to.


Andreas Kluth
Andreas Kluth is a columnist for Bloomberg Opinion. -- Ed.

(Bloomberg)
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