Saturday, 16 February, 2019

Nord Stream 2 in dire straits after French U-turn

Angela Merkel and Emmanuel Macron signing a German French friendship treaty in Aachen Angela Merkel and Emmanuel Macron pledged closer cooperation as they signed a new treaty last month Credit LUDOVIC MARIN AFP
Kenny Thornton | 10 February, 2019, 22:02

According to the French representation of the compromise provides for a two-stage procedure: The first responsibility for Pipelines with third countries such as Russian Federation spent in the EU country where the line for the first time on the European network hits, BelTA learned from the environment of the President of France, Emmanuel Macron.

France has chose to back the directive which has seemingly shaken the relation between Mr Macron and Ms Merkel.

Germany will not become dependent on Russian Federation for gas due to Russia's Nord Stream 2 pipeline, Chancellor Angela Merkel said on Thursday, stressing that it was crucial to ensure Ukraine remained a transit country for gas.

The EU executive wants a say over how Nord Stream 2 is used before its construction, which involves European companies, is completed. It is believed that the amendments in question mainly target Nord Stream 2, funded by the Russian gas supplier Gazprom.

France had earlier chose to support amendments to the Gas Directive that would give the European Commission more powers over the Russian-European Nord Stream 2 pipeline, while Germany continued to oppose the move.

That will mean charging market prices for gas, rather than Gazprom making its own agreements, and will likely make running the pipeline more expensive in general, said Gustav Gressel, a senior policy fellow at the European Council on Foreign Relations think-tank in Berlin.

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The draft compromise reportedly addressed the concerns, saying: "We consider a (gas rules) directive in this spirit indispensable for a fruitful discussion on the future gas transit through Ukraine".

The newer draft, seen by Reuters, suggests Berlin is looking to take the lead on authorising the pipeline, which will run from Russian Federation directly to Germany. The pipeline project will be on the line until the legislation passes.

German Chancellor Angela Merkel has so far insisted that the pipeline is a "purely economic project" that will ensure cheaper, more reliable gas supplies. He also noted that the vast majority of business representatives have voiced support for Nord Stream 2.

"There is no French-German crisis", the spokesman added. So one could see the compromise draft as damage limitation exercise as although main threats, i.e. significant arbitrary cap on Nord Stream-2 utilisation, appear to have been alleviated, regulatory uncertainty and danger of litigation remains, Yafimava explained.

The French Ministry of foreign Affairs had initially announced on Thursday, the government in Paris wool unlike Germany votes for a tightening of the rules for Pipelines from third countries.

German businesses are very involved in the pipeline, having invested heavily in the project, which is run by former Chancellor Gerhard Schröder.

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