Germany offered €1bn to avert US sanctions against Nord Stream

Monday, 08 March 2021
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It has become clear that the German government was ready to pay over €1 million to the Trump administration to avert US sanctions and proceed with construction of the Nord Stream 2 pipeline. Finance minister Olaf Schulz offered the money to his US counterpart Steven Mnuchin, saying Germany would support the construction of LNG import terminals.

Scholz sent the letter to Washington on August 7, 2020, according to research by the German newspaper ‘Die Zeit’, but the government has long denied the existence of such a document. In the written proposal, the government offered to “public support for the construction of LNG import terminals by making available state funding on favourable terms.”

The Trump administration has openly backed the US oil and gas industry which wanted to export LNG to Germany via the proposed terminals in the ports of Brunsbüttel and Wilhelmshaven. Trump had openly threatened sanctions against all companies involved in the construction of Nord Stream 2, saying he wanted to sell American instead of Russian natural gas to Germany.

Merkel back restart of works on Nord Stream II

The German Chancellor Merkel is supporting Nord Steam II even after Russia earlier announced the expulsion of diplomats from Sweden, Germany and Poland for taking part in illegal protests in January against the jailing of Russian opposition figure Alexei Navalny.

“The position on Nord Stream II is not affected by this for the time being. This is a project on which you know the position of the federal government,” stated Merkel. The Chancellor l has been saying she would like to treat the Navalny case and the pipeline project as two "separate" matters. However, she might now be pressured into changing her stance especially after the German Institute for Economic Research (DIW) cast doubt on the pipeline's usefulness from an economic perspective.

Construction of the 1,230-kilometres pipeline is 90 percent complete, apart for a final stretch of around 120 kilometres in length in Danish waters. The pipeline under the Baltic will make landfall at the northern German coastal town of Lubmin, near Greifswald after starting from the Russian port of Ust-Luga.

The outgoing US Administration criticised the pipeline by-passing Ukraine and depriving that nation of transit fees while increasing the EU’s reliance on Russian gas imports. Germany, however, insists that Russian pipeline gas is a necessary to ensure security of supply and does not impede companies or utilities to buy natural gas or LNG from other sources. 

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