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2015-12-21 19:50:00

POLAND ATTACKS GERMANY

POLAND ATTACKS GERMANY

Donald Tusk, president of the European Council, became the latest senior politician to criticise plans for a new pipeline bringing Russian gas to Germany, saying it would undermine the EU's goal of reducing energy dependence on Moscow.

The $11bn Nord Stream 2 project was a central theme of debate at Friday's EU summit in Brussels.

Matteo Renzi, Italy's prime minister, joined eastern European countries in accusing Germany of hypocrisy for protecting its own economic interests. EU member states, including Italy, complain that they have lost out financially in order to hold a united line on sanctions against Russia.

Russia supplies 30 per cent of EU gas needs and Mr Tusk said Nord Stream 2 would only deepen that dependency. "In my perspective, Nord Stream does not help diversification, nor would it reduce our energy dependence," he told the summit's closing press conference.

He added that the proposed pipeline would heighten instability by cutting the gas transit fees that adds €2bn a year to Ukraine's fragile economy.

In a sign of how toxic the issue has become, Angela Merkel, Germany's chancellor, sought to distance herself from the issue, saying on Friday: "I have made clear, along with others, that this is first of all an economic project. There are private investors for this project."

Many countries believe the EU should raise a legal veto over Nord Stream 2, not least because Gazprom, Russia's state-controlled gas export monopoly, is the sole supplier and a big shareholder in the pipeline. The project is planned by a consortium of Russian and European energy groups: Gazprom, Shell, BASF, Eon, Engie and OMV.

Eastern European countries and Italy are still smarting from the collapse last year of the planned South Stream project, which would have brought Russian gas to south-east Europe under the Black Sea to the Balkans.

The $50bn project failed largely because Brussels insisted on competition rules that would have prevented Gazprom from extending its hold over the European market.

Using so-called Third Energy Package rules, the European Commission insisted other gas suppliers be given access to South Stream and argued that Gazprom would be in violation of laws by providing both the gas and owning the pipeline.

According to people who attended Friday's summit, Mr Renzi repeated his opposition to Nord Stream 2 and insisted that the same rules should apply.

In a sign of solidarity, EU countries accepted this in the conclusions of the summit, agreeing: "Any new infrastructure should entirely comply with the Third Energy Package". This countered fears that Germany would attempt to approve the pipeline under national rather than EU law.

Even in Germany, the project is contentious with a powerful energy industry backing the scheme and some politicians opposing it.

Norbert Röttgen, chairman of the Bundestag's international affairs committee, on Friday called for a review of Nord Stream 2, saying it was a "highly-political subject which carried the risk of splitting Europe".

He added: "There is a strong indication that Nord Stream 2 contradicts the aims of the agreed European energy policy."

However, German investors in the scheme have the support of the economics ministry and its leader, Sigmar Gabriel, leader of the social democrats, Ms Merkel's coalition partners.

Mr Gabriel discussed Nord Stream 2 with Vladimir Putin when the two met in Moscow last month. According to the Kremlin website, Mr Gabriel said it was "most important as far as legal issues are concerned that we strive to ensure that all this [Nord Stream 2] remains under the competence of the German authorities, if possible. So if we can do this, then opportunistic for external meddling will be limited."

An economy ministry spokesman on Friday declined to comment on the reported remarks but said Nord Stream 2 would "always be in line with valid European law".

ft.com

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More: 

EUROPE WANTS TO PAY MORE - 2 

NORD STREAM-2: SPECIAL TERMS 

STRETCHED NORD STREAM 

NORD STREAM IN THE PROCESS 

GAZPROM'S NEW STRATEGY

 

 

Tags: EUROPE, RUSSIA, NORD, STREAM, GAS, PIPELINE
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