The chairman of the German Eastern Business Association (OAOEV), Oliver Hermes, has strongly warned against sanctions on the Russian-European gas pipeline project Nord Stream 2, branding it fatal for the Paris peace efforts in eastern Ukraine. According to Hermes, Washington’s attempt to interfere would be “more than an unfriendly act” and would “massively damage” transatlantic relations.
"If these sanctions are approved, this would be a direct attack on the sovereignty of the European Union and a fatal signal for the Paris peace efforts. The venture has been granted all necessary permits from the EU for its completion, besides, needed regulations for operation have been adopted”, he notes.
He specified that the planned punitive measures would jeopardise the ongoing peace process in Donbass on the Russian-Ukraine border after the German chancellor and French president as well as Ukrainian President Volodymyr Zelensky’s “bold policy” helped make the first steps out of the deadlock.
“This approach will be jeopardised with new US sanctions as well as striking a new natural gas transit agreement between Russia and Ukraine by the end of the year", Hermes said.
Threat to American LNG Projects
Consumers in the EU would also be affected, as US sanctions are expected to push energy prices up in the short term, Hermes added.
"Markets will respond to tensions. We learned this from the US sanctions against Russian aluminium producers, which were announced in April 2018 without consultation with the EU. Prices spiked so fast that the sanctions were finally suspended”, he recalled.
The sanctions are said to undermine transatlantic unity, which could cause massive damage to US projects in Europe, including those concerning liquefied natural gas (LNG).
"The Americans want to sell liquefied gas to Europe with plans to build terminals in Germany. If they step up pressure with economic sanctions, expected to repress the competition, the enthusiasm about such projects with the USA would cool down”, Hermes concluded.
Will Sanctions Be Accepted Before Christmas?
After months of pressing European countries to stop the project and threatening the companies involved in the venture, US sanctions against the Nord Stream 2 were reportedly included in a must-pass defence bill. It is expected to be approved before Christmas.
The sanctions will reportedly target the vessels and executives of the companies involved in laying the pipeline, which could lead to the blocking of their US-based property and visa denials. The future measures, which are attached to the National Defence Authorisation Act, or NDAA, are meant to force a standstill in the construction of the Nord Stream 2 pipeline, a Senate Republican aide said, as quoted by Bloomberg.
Due to be finished before the end of this year, Nord Stream 2 is a joint venture between the Russian energy giant Gazprom and five European companies: France's ENGIE, Austria's OMV, UK-Dutch Royal Dutch Shell, and Germany's Uniper and Wintershall.