Germany aims for new deal with Washington on Nord Stream 2

One of the most-read items among German foreign policy experts these days is a 34-year-old book that could offer clues to resolving one of the biggest diplomatic headaches bedevilling US-German relations.

The book is Ally Versus Ally: America, Europe, and the Siberian Pipeline Crisis, written in 1987 by a then-obscure law student. Its author, Antony Blinken, is now US secretary of state.

Blinken’s book looks at the row that broke out between the US and Europe in the early 1980s over a new pipeline from the Soviet Union’s vast Siberian gasfields to Europe. In 1981 the Reagan administration imposed sanctions on the project, leading to one of the worst crises in transatlantic relations of the cold war.

History seems to be repeating itself. Russia is building a new pipeline, Nord Stream 2 (NS2), and the US has again imposed sanctions, arguing it will increase Europe’s dependence on Russian energy exports. Just as in 1981, the measures are a bone of contention, with German politicians accusing the US of waging “economic war” on a close ally.

The hope of experts in Berlin is that Blinken’s arrival at the US Department of State could usher in a fresh approach to NS2 — and potentially a resolution of the stand-off. After all, in his book he argued that it was more important for Washington to nurture its allies than dictate their economic relations with Moscow. 

Andreas Nick, an MP with Chancellor Angela Merkel’s Christian Democratic Union, is one of those encouraged by Blinken’s book. “My impression is that [he] doesn’t think sanctions are the right way to deal with an ally, and we trust him,” he said.

In Berlin, ministers are now working on creative solutions they can present to President Joe Biden’s team that may persuade them to drop sanctions. One idea being floated is the concept of “snapbacks” — a mechanism that would allow Germany to shut off Nord Stream 2 if Russia puts pressure on Ukraine, say, by arbitrarily cutting supplies through its gas transit system.

Some German politicians argue that if such a mechanism can be agreed, having the pipeline might actually strengthen the EU’s bargaining power vis-à-vis Moscow.

“Once NS2 is finalised, we should have the option to stop the flow of gas whenever we think it necessary,” said Nick. “That way you may get a completely different kind of leverage over Russia.”

Yet defining snapbacks is hard: German officials want to be able to make their own call, based on context. US officials favour automatic triggers. They also say Ukraine must be involved in any discussions on the mechanism.

Such a measure would anyway be legally fraught. Nord Stream 2 could sue the German authorities if they interrupted the flow of gas. A spokesperson for the project declined to comment.

Another idea under discussion is for Germany to impose a kind of moratorium on commissioning the pipeline until Russia shows goodwill. “We should think about making the start-up of NS2 conditional on a change of behaviour on the part of Russia — say, the release of [opposition activist Alexei] Navalny, or improvements on the ground in eastern Ukraine,” said Nils Schmid, foreign policy spokesperson for the Social Democrats.

As Berlin searches for solutions, early signs from Washington suggest the Biden administration is keen to lower the temperature of the debate over NS2. Two people briefed on the matter said Blinken has indicated an openness to minimising sanctions. A spokesperson for the state department did not comment on the claims but stressed sanctions were only one tool.

But the problem for those keen to strike a deal is that the hardline US stance on NS2 is backed by both Democrats and Republicans, who have voted to expand sanctions legislation this year.

“If you’re the Biden administration, you’re coming up against bipartisan support in Congress for sanctions to kill Nord Stream 2,” said Daniel Fried, a former US ambassador to Poland who also held the top sanctions role in the state department during the Obama administration. “You don’t want to be seen as being soft on [President Vladimir] Putin right out of the gate, especially now.”

Already, the prospect of the state department “slow-rolling” sanctions has drawn strong criticism from Congress. Two senior members of the Senate foreign relations committee, Republican Jim Risch and Democrat Jeanne Shaheen, wrote to Biden last Friday saying they were “concerned” by reports the US might disregard statutorily mandated sanctions in exchange for a deal with Germany.

They urged the president to ensure delivery of a report that the state department is due to hand Congress on Tuesday identifying entities that are “actively involved” in the construction of the pipeline and so liable to sanctions under US law.

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Biden himself has always disapproved of NS2, calling it both on the campaign trail and since his election a “bad deal for Europe”. As vice-president he toured Europe in 2016 to voice his opposition to the project. A former Obama official said the US approach was always to delay completion of the pipeline, a strategy the person described as “death by a thousand cuts”.

That attitude has not fundamentally changed since Biden moved into the White House. Nord Stream 2 “divides Europe, exposes Europe and central Europe to Russian manipulation [and] goes against Europe’s own stated energy and security goals”, a state department spokesperson said last week.

At the same time, there is a clear desire on the part of the new administration to mend fences with Berlin. Washington sees Germany as a critical ally on everything from confronting China and negotiating with Iran to climate change. Solving their NS2 problem would allow them to focus on their shared agenda.

That is certainly what the Germans are hoping. And they think that if history is any guide, they have reason to be optimistic. Back in 1982, the Reagan administration ultimately rolled back its sanctions, after howls of protest from its European allies.

As Blinken wrote in his book: “The [Reagan] embargo was an intolerable affront to the Europeans, for, in their view, it brazenly asserted the United States’ right to make trade and foreign policy for its allies — whether they like it or not.”