06:19 GMT04 June 2020
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    The US Senate on Tuesday passed a $738 billion defence bill that includes sanctions against Nord Stream 2, along with other provisions. The Senate voted 86-8 in favor of the 2020 National Defence Authorization Act (NDAA), which will now be forwarded to US President Donald Trump's desk.

    The legislation calls for mandatory sanctions on Nord Stream 2 and TurkStream pipelines and bars military-to-military cooperation with Russia. Trump has been a supporter of the bill and has urged Congress to pass the legislation so he can sign it immediately before funding for the Defence Department expires on 20 December.

    Germany - whose Uniper and Wintershall take part in the Nord Stream 2 project - is reportedly considering retaliatory measures in response to the impending US sanctions against Nord Stream 2.

    Russian Foreign Minister Sergey Lavrov has, however, said that new US sanctions would not hinder the construction of the European energy project.

    Andy Vermaut, fundamental rights activist from Belgium is "unhappy" with this decision, as Europe has a huge demand for Russian gas.

    "The Senate voted Tuesday to impose sanctions on companies operating the pipeline for Russia's Nord Stream, sending a bill that definitely opposes European nations' energy policy. This bill is designed to stop the $10.6 billion pipeline under development in the Baltic Sea and to double the supply of Russian gas to Germany. We need this Russian gas. The measure, which is part of a major annual spending bill for defence, was passed between 86 and eight after the House of Representatives was easily clear last week", Vermaut says.

    According to the rights activist, the bill is a "war claim" as it could eventually undermine the EU economy.

    "This is an anti-Russia, France and Germany war claim. To develop our European economy, but also to give our European families an acceptable energy tariff, Europe really needs this cheap Russian gas. Increasing sanctions on Russia thus weakening the European economy is unfair of the United States. This is an example of Americans' abuse of power. Gas production was never competitive in America. In Europe, we certainly ought not to be responsible for the mistaken political decisions made by the Americans", Vermaut stresses.

    Vermaut also expresses indignation with Washington's move as the US bill heralds foreign intervention in EU energy policy.

    "The price seems to have to be paid for by ordinary citizens of Europe. The needs of European merchants and people must be protected and Europe must avoid any intervention in the energy policy of Europe. Last week the German-Russian Chamber of Commerce announced that the pipeline is necessary for European energy security and that the US should be penalized if this. I perfectly agree. We need now a strong European answer. The unthinkable has happened. The citizens of Europe must oppose this decision and this policy must be protested by the big politicians of Europe. We cannot accept or recognize this. The United States is making a big mistake here", Vermaut says.

    As a possible measure to counter the US decision on the Nord Stream 2, Vermaut suggests sanctioning American goods in Europe.

    "Europe must now impose sanctions and penalties on American products, services and goods in Europe. We cannot accept that the whole of our economy is being undermined by the United States. The ordinary citizen will be the loser again. Not only is this unacceptable, but it also goes against the interests of European companies, which have already invested a great deal in the development of Nord Stream 2. The National Defence Authorization Act, a $738 billion 2020 package that includes sanctions, is now heading to the White House, where Trump is expected to sign it. These sanctions target not only pipe-laying vessels for Nord Stream 2 but also TurkStream, a Russian-Turkey pipeline, and include asset freezes and the cancelation of US visas for contractors", Vermaut laments.

    The Belgium-based pundit points to a member-company of the joint energy project which could be hit hardest by the US sanctions.

    "One of the major contractors that will be hit is Swiss-based Allseas, which was hired by Russia's Gazprom to build an offshore section. This is just pure bread looting. This also goes against the Paris Climate Convention. It is quite normal for us to turn to our European neighbors when it comes to our energy. We should not buy our gas on the other side of the world at a more expensive price just to please the Americans and undermine our own economy. This is no longer serious", Vermaut states.

    Sanctions as Means of 'Gaining Competitive Advantage'

    Yannis Koutsomitis, a Belgium-based political and economic analyst, points to the timing of the US move to sanction the Nord Stream 2.

    "The US Congress has rushed to sanction the construction of the Nord Stream 2 project, during a very sensitive time for the security situation in Europe, as this controversial energy project is at least indirectly connected to the peace process. Just a week ago, Russian President Putin showed he is willing to engage in a peace process with Ukraine's President Zelensky. It would be wise for the US to accommodate this positive momentum and not put unnecessary hurdles on a very delicate negotiation. It is understandable that there differences of opinion over West's handling of relations with Russia, but my take is that sanctioning Nord Stream 2 is counterproductive at this stage", Koutsomitis says.

    A Washington-based expert from the Eurasia Centre think-tank, Earl Rasmussen, suggests that the US measure against Nord Stream 2 would result in an extension of the deadly conflict in Ukraine.

    "The recently passed National Defence Authorization Act continues the aggressive actions of the US, this time focusing efforts on traditional US allies as a result of them conducting business transactions with Russia. This is a sad day and one which directly acts to use sanctions as a means of gaining a competitive advantage. Moreover, it extends funding in support of deadly force in Ukraine, while European, Ukrainian and Russian leaders are attempting to find a diplomatic solution to the conflict which originated due to a US-supported violent coup against a democratically-elected government", Rasmussen says.

    US Alienates Allies

    Rasmussen emphasizes that even if American energy diktat in Europe succeeds, liquified gas from the US cannot replace the growing demand of the EU economy for Russian gas.

    "Nord Stream 2 has been targeted by the US Administration and now has the support of Congress. It is shocking that the US is now dictating commerce, economic development, energy security and defence policies of its European and NATO allies. Europe is in need of increased gas supplies in order to transition from coal and nuclear power and to provide an engine for its economic growth. US LNG will not meet the needs of a growing and evolving economy and definitely will not meet those needs from a financial or economic perspective. Sanctioning businesses and countries that are acting in their own interests for their businesses and people seems to be the target of US sanctions", Rasmussen says.

    The new measure will create additional distance between the US and its European partners, according to the pundit.

    "Continued US aggression will only alienate allies more. Continued US meddling in sovereign countries’ internal affairs along with the supporting sanction and tariff game will only go so far before it boomerangs on the US, its alliances, and its economy", Rasmussen predicts.

    Dr. Theodore Karasik, a Senior Advisor for Gulf State Analytics, sees the US move as a perfidious maneuver to cut Russia out of the global competition for dominance in the energy supplies.

    "This sanction move against Russia is meant to cut Moscow out of the regional gas market in early 2020. Europe is naturally unhappy,  and for good reason, for near-term energy requirements and sanctions damage to European companies involved in the construction and maintenance of these lines. One major contractor that could be hit is Swiss-based Allseas, which has been hired by Russia's Gazprom to build the offshore section. To be sure the US is seeking a larger role in gas politics and exports to Europe in key states such as Poland as a counter to Russia. Where are these pipelines run is part of that calculus. But it is also important to tabulate the context of this formula with regard to Libya and what comes next. The geoeconomic gas game is on and carries risks for every party and thus we are witnessing a transformation of the industry", Karasik suggests.

    The views and opinions expressed in the article do not necessarily reflect those of Sputnik.


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    National Defense Authorization Act (NDAA), impact, EU, sanctions, Germany, Russia, United States, Nord Stream 2
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