Eastern Europe to confront Berlin over new Russian gas pipeline

Henry Foy in Brussels

Eastern Europe is girding for another clash with Berlin over a Russian gas pipeline that would circumvent Ukraine and the EU’s easternmost members.

Nine countries, led by Poland and Slovakia, are petitioning to block the pipeline in a campaign animated by their belief that the EU’s most powerful member state has put its own economic needs ahead of their energy security.

In a letter to Donald Tusk, the European Council president, seen by the Financial Times, they demand that the proposed pipeline between Russia and Germany be put on the agenda of next month’s summit of EU leaders, in an attempt to pressure Brussels to withhold its approval. 

The eastern countries, which have clashed with Germany over EU demands that it accept thousands of refugees, fear the new Nord Stream 2 pipeline, the second to connect the two countries under the Baltic Sea, will increase Europe’s dependence on Russian gas monopoly Gazprom. They argue that it contradicts the EU’s own energy diversification and security policies and amounts to one rule for Berlin, and another for everyone else. 

“Nord Stream 2 would be, above all, detrimental in geopolitical terms . . . for the purpose of exerting more political pressure and applying blackmail on the EU, its eastern member states and its eastern neighbours,” said Polish MEP Jacek Saryusz-Wolski, a member of the centre-right leadership in the European Parliament. 

“In the current geopolitical context, enhancing Gazprom’s — the external expression of the Kremlin’s policy — position on EU territory could be a geopolitical game-changer, especially for the EU’s neighbourhood,” Mr Saryusz-Wolski added. 

The issue also risks becoming a source of renewed transatlantic tensions. The Obama administration has vocally objected to the project, noting it would deprive Ukraine of about €2bn in gas transit fees — money that the International Monetary Fund or EU would have to make up as part of its burgeoning aid package to Kiev. 

A senior EU official said the lobbying campaign has already achieved some success and energy security would probably be discussed at the December summit. But Jean-Claude Juncker, president of the European Commission, which will rule on the legality of the Gazprom project, has batted away suggestions from eastern states that the project should be considered as a political issue.

Mr Juncker has insisted the project is a commercial venture and should only be assessed to see if it complies with the EU’s internal market rules, echoing comments made by Angela Merkel, German Chancellor.

 Maros Sefcovic, the Slovak vice-president of the commission and head of its energy policy, has said that the EU “will only support infrastructure projects that are in line with the core principles of the energy union”. 

Poland, which has been the most vocal critic of the pipeline, argues that it will cut Ukraine out of the European gas supply chain, hurt European cohesion efforts and plans to integrate energy networks. Warsaw also fears it will increase Moscow’s — and Berlin’s — influence over gas supply. As such, it has argued that the project should be assessed as a geopolitical risk. 

The Poles have support from Slovakia, which stands to lose an estimated €400m it receives in transit fees for Russian gas that currently flows through its territory, and Hungary, still smarting from the commission’s decision to block its plans to build a similar “South Stream” pipeline with Russia. 

"We know that at the moment we are losing this battle [to stop the project], but we will fight, fight, fight anyway," one senior diplomat from the region told the Financial Times. 

Nord Stream 1, inaugurated in 2011, met similar opposition from eastern states, which saw it as a way for the Kremlin to control EU gas supply. Then Polish foreign minister Radoslaw Sikorski compared it to the 1939 Molotov-Ribbentrop pact that saw Nazi Germany and the Soviet Union divide Poland between them.

It was eventually pushed through with the strong support of former German chancellor Gerhard Schröder, who signed the deal to build the pipe in his last few days in office. (Mr Schröder was subsequently appointed chairman of the board of the company that runs Nord Stream).

Berlin says the new pipeline will protect EU gas supplies in the event of any dispute between Russia and Ukraine causing disruption to flows, and that it is a purely commercial decision taken by private energy companies.

About one-third of Russian gas to Europe flows through Ukraine, about half as much as before the first Nord Stream pipeline was constructed. Critics note that the existing Nord Stream pipeline only operates at 50 per cent capacity, making a second pipeline appear more geopolitical than economic. 

The planned pipeline, agreed last year by Gazprom and big European energy firms, would double the Baltic Sea supply route and theoretically mean it could supply almost 30 per cent of EU gas demand. 

Germany is keen for the EU to have as little influence as possible over the pipeline, which is slated to begin transmission in 2019, when a Gazprom supply deal with Ukraine expires. 

Ms Merkel’s vice-chancellor Sigmar Gabriel, during a visit to Moscow last month, told a press conference alongside Russian President Vladimir Putin that Germany would “strive to ensure that all this remains under the competence of the German authorities” to limit “the possibility of political interference in this project”.

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