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Pipeline Politics
The Pipeline Dividing Europe

Though many expected the EU to renew sanctions against Russia for its incursions in Ukraine as a matter of course, Italy has delayed proceedings by asking for more discussion on the matter. Important to this discussion seems to be Berlin’s intention to move forward with the construction of the Nord Stream 2 pipeline, which would increase Germany’s capacity to import Gazprom natural gas. The FT reports:

[Italian prime minister Matteo Renzi] last week blocked an effort to roll over the measures against Russia for another six months amid irritation at Germany’s insistence on moving forward with the pipeline, which largely follows the same path as the original Nord Stream pipeline, and its refusal to allow Brussels to review the project, known as Nord Stream 2. […]

In particular, the Italians believe that Nord Stream 2, backed by senior members of German chancellor Angela Merkel’s government, runs contrary to the spirit of the sanctions campaign and amounts to a powerful Germany putting its economic needs ahead of the bloc’s collective diplomacy. “We are strong on sanctions, but on the other hand a number of countries, or companies, are able to double [the size of] Nord Stream,” one Italian official said.

Nord Stream 2 is backed by a consortium of 6 energy firms: Gazprom (which has a 50 percent stake in the project), two German companies, a French company, an Austrian company, and Royal Dutch Shell. The project, if it goes through, will give Gazprom a link to Europe that bypasses the Baltic states, leaving out Ukraine and any potential transit problems therein.

Italy doesn’t like the project because its own pipeline deal with Gazprom—the so-called South Stream—was scuppered late last year after the European Commission pushed back against some of the project’s contracts. Eastern Europe is loathe to see an alternative route being floated that would cut it out of valuable geopolitical leverage and lucrative transfer fees. And for its part, on the other side, Germany would love to strengthen its own economy with a more stable supply of natural gas.

The vagaries of the Nord Stream 2 project are throwing intra-European tensions into sharp relief. It seems the U.S. doesn’t have a monopoly on fractious pipeline politics.

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