Germany shuts down Nord Stream 2 pipeline in response to Russia
BERLIN — As recently as December, Olaf Scholz, the German Chancellor, viewed the new gas pipeline linking Russia with the German coastline as a “strictly private project” that had no role in political discussions.
Last month, Mr. Scholz objected when asked if he would echo President Biden’s assertion that the Nord Stream 2 project would be stopped if Russia invaded Ukraine.
But just hours after President Vladimir V. Putin ordered Russian armed forces to cross the border into breakaway regions in eastern Ukraine, Scholz made it clear he was ready to sacrifice the project. . This, as Germany faces its worst energy crisis since the 1970s, and with business leaders warning that high fuel prices could threaten the industrial prowess of Europe’s biggest economy.
“The situation today is fundamentally different,” Scholz told reporters early Tuesday. “That is why, given the latest developments, we must also reassess this situation. By the way, this includes Nord Stream 2.”
For years, Germany refused to jeopardize its energy trade with Russia by responding to Moscow’s worst excesses, because it depended on Russian natural gas to heat its homes and run its factories. In 2014, after Russia annexed Crimea, Berlin assured that its gas purchases would not be disrupted by sanctions against Russia.
The suddenness of Mr. Scholz’s Tuesday decision was remarkable, some political observers said.
“I think Moscow didn’t expect it to happen so quickly,” said Janis Kluge, senior associate at the German Institute for International and Security Affairs.
“It’s really something that was fundamentally unthinkable just a few weeks ago,” she said. “The hard-line narrative in German business and politics has always been that gas supplies from Russia will always be there through any crisis.”
Started under Mr. Scholz’s predecessor, Angela Merkel, the pipeline has caused tension between Germany and its partners in Europe and the United States. Sen. Ted Cruz of Texas and others in Washington had sought for years to halt its construction, which was finally completed late last year.
Since November, the pipeline approval process has stalled, pending the establishment of a Germany-based subsidiary to comply with European laws.
Mr Scholz said he had ordered his economy minister, Robert Habeck, to withdraw documents that considered the pipeline a necessary part of Germany’s energy supply.
“Nord Stream 2 cannot enter service without this certification,” Scholz said. The approval process will now be scrapped and the Economy Ministry will have to review it before the project can go ahead.
Throughout weeks of discussion of possible sanctions against Russia, Mr Scholz had remained firm in his refusal to discuss his plans for the $11 billion pipeline, wanting to keep the Kremlin guessing how Berlin might respond to transgressions. Russians.
Germany’s attitude has changed after months of dwindling petrol reserves at its longtime supplier.
Since the end of November, Russia has refused to sell Germany natural gas beyond the quantities agreed in long-standing contracts, despite the record price of natural gas on the spot market. It has also allowed natural gas levels in the storage facilities that Gazprom owns in Germany to plunge to record lows.
Some Kremlin officials derided the German decision.
“Well,” said Dmitry A. Medvedev, deputy chairman of the Russian Security Council. on Twitter. “Welcome to the new world where Europeans will soon pay 2,000 euros for 1,000 cubic meters of gas!” (That’s roughly double the current rate.)
This assertion “is complete nonsense,” replied Ursula von der Leyen, President of the European Commission. on CNN.
Dmitry Peskov, a spokesman for Mr Putin, said Russia regretted Berlin’s decision, underlining Moscow’s view that the project “has nothing to do with politics”.
“This is a purely economic and commercial project which, in addition to mutual benefit, is supposed to be a stabilizing factor for the European gas market,” he said.
Ms. Merkel frequently used the same words to describe the project, and for weeks it appeared that Mr. Scholz had no intention of changing that position. But his three-party government – which includes the liberal Democratic Party and the environmentally-conscious Greens, as well as his centre-left Social Democrats – has focused on repositioning German energy policy and has emphasized on reducing the country’s dependence on Russian natural gas.
Jen Psaki, the White House press secretary, said the German Chancellor’s decision was made in conjunction with Mr Biden, who has publicly insisted for weeks that any action by Russia towards the Ukraine would effectively terminate the pipeline.
“We had close consultations with Germany overnight and welcome their announcement,” Ms Psaki said. on Twitter.
Many European political observers also hailed Mr Scholz’s decision as a chance to reset the German-Russian energy partnership, which since Cold War times has been untouchable in foreign policy terms.
“For me, this is real leadership at a crucial moment,” noted Jana Puglierin, President of the European Council on Foreign Relations in Berlin.
The response from the country’s industries, many of which have already been forced to cut production due to high energy costs, has been more subdued.
The main lobby organization representing German industry, BDI, warned on Monday that soaring energy costs “threaten to crush the economy”.
The association declined to comment on Tuesday.
But Mr Habeck, a member of the Greens party, stressed that a military conflict would force the cost of energy to rise further. “I want to emphasize that war drives up prices,” he said.
The East German Business Association, which represents companies doing business in Russia and other eastern European countries, urged Scholz and the European Union “to proceed with caution “.
“Common interests can serve as a lever for understanding here,” said Oliver Hermes, president of the association. “The doors of dialogue must not be permanently closed.”
Wintershall Dea, a German oil company that was one of five European companies that provided financial support for half the cost of the Nord Stream 2 project, also warned of the far-reaching economic consequences that a military clash between the Russia and Ukraine would have repercussions far beyond the energy sphere.
“As well as causing terrible human suffering, an escalation would set our entire continent back years,” a spokesperson said. “And, with it, the European and Russian economies. When considering the economic consequences, it is wrong to focus solely on the topic of natural gas supply and pipelines.