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NORD STREAM2 ENERGY AND EUROPEAN UNION ASPECT OF THE SANCTIONS AGAINST RUSSIA

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NORD STREAM2 ENERGY AND EUROPEAN UNION ASPECT OF THE SANCTIONS AGAINST RUSSIA V FOR VLADIMIR, V FOR VENDETTA[i] By Cigdem Yorgancioglu 02 Aug 2017 04.15 AM

  

 V FOR  VLADIMIR,   V FOR VENDETTA[i]

By Cigdem Yorgancioglu  02 Aug 2017 04.15 AM

 

Retrospectively, after Russia annexed Crimea and backed separatists in eastern Ukraine, in 2014, the Obama administration in collaboration with the European Union introduced a range of economic sanctions on Russian individuals and businesses.[ii] In the Midst December 2014,. speaking to lawmakers at the Bundestag, German Chancellor Merkel  said Europe could not allow Russia to violate the principles of the rule of law, respect and partnership and  Russia sanctions to stay, said  ahead of EU summit

 

On the basis of the news on Deutsche Welle[iii] (DW) December 2014, State Department spokeswoman Jen Psaki said it "remains the case that Russia has a choice to make. They have an off-ramp; and they've long had an off-ramp."The sanctions, aimed at Russia's defense and energy sectors, have been branded by Russian Foreign Minister Sergey Lavrov as antagonistic, and come as Moscow faced deepening economic turmoil Against a background of plunging oil prices and existing sanctions imposed on Russia by the EU and US, the value of the ruble fell to an unprecedented low , trading at 80 rubles to the dollar. With a plentiful supply of petroleum in many world markets at present, the price of a barrel of oil has been on the decline - meaning that hydrocarbon-rich Russia a net loser. A November meeting of the Organization of Petroleum Exporting Countries (OPEC) agreed that the production ceiling should not be reduced, causing oil prices to fall still further. Washington and Brussels imposed their last round of sanctions over Moscow's actions in Ukraine in September. The Kremlin was under fire over its annexation of Crimea earlier in 2014, as well as the alleged supply of weapons and manpower to separatist rebels in the eastern Ukrainian provinces of Donetsk and Luhansk.

 

 

 

Many of the individuals targeted were connected to Russia's actions in Ukraine or were part of President Vladimir Putin's elite entourage. Resources, Assets and Properties were frozen and restrictions imposed on Russia's oil industry, as well as its state finance, technology and arms sectors Moreover, in December 2016, Barack Obama expelled 35 Russian diplomats and closed two Russian compounds in response to what the US intelligence community concluded was a Russian government-backed cyber-attack directed to influence the outcome of the 2016 presidential election. Moscow denies the allegation.

 

Then US Congress started to contemplate a significant piece of legislation to punish Moscow for alleged interference in last year's election.  The bill tightens existing sanctions around the ongoing situation in Ukraine and imposes new measures including some in response to alleged hacking during the 2016 election and others that target key Russian industries such as the railways, shipping, metals and mining. It would also bring in restrictions on companies doing business with the Russian oil industry.

 

 Moscow announced that 755 staff must leave US diplomatic missions in Russia, in retaliation over new sanctions imposed for Russia's annexation of Crimea in 2014 and Russian interference in the US election. Russia's decision to significantly reduce the number of US diplomatic staff marks the end of any immediate hope for a fresh start between Moscow and Washington in late July 2017. Indeed, it could usher in a new and uncertain period of rivalry between the two capitals. The decision to cut diplomatic staff (755) but Putin has now confirmed the number who must go by 1 September 2017. It brings staff levels to 455, the same as Russia's complement in Washington. According to BBC's Laura Bicker in Washington, this is thought to be the largest action against diplomatic staff from any country in modern history. The number includes Russian employees of the US diplomatic missions across Russia, the BBC's Sarah Rainsford in Moscow adds Staff in the embassy in Moscow as well as the consulates in Ekaterinburg, Vladivostok and St Petersburg are affected, she said.[iv]

 

Sarah Huckabee Sanders, the White House press secretary, signaled the White House's support for tough sanctions on Russia until the situation in Ukraine was "fully resolved". Without a clear end in sight, that could mean a long time.

James Nixey, head of the Russia and Eurasia Programme at Chatham House, a foreign policy think tank, says Russia has so far given the president the benefit of the doubt when it comes to Mr Trump's promise to forge better relations between Washington and Moscow. However, these new sanctions may "test their faith" because they are in fact harsher than the sanctions under President Obama.[v]

 

Formerly, in the early 1980s Ronald Reagan’s attempts to prevent a Soviet pipeline that would bring Siberian gas to Europe annoyed the West Germans and drove the French to proclaim the end of the transatlantic alliance. Thought the cast of characters which means the leaders has shifted a little today, the arguments were  almost the same. In Nord Stream 2 (NS2), a proposed Russian gas pipeline, Germany sees a decent project that will cut energy costs and lock in secure supplies. American politicians (and the ex-communist countries of Eastern Europe) detect a Kremlin plot to deepen Europe’s addiction to cheap Russian gas. They criticized German spinelessness.

 

Last year (2016) the debate over the Nord Stream 2 project, the proposed gas pipeline that will run through Finland, Denmark, Sweden and Germany to connect Russia and the EU, has been revived. After it initially appeared that the EU might attempt to block Russia’s new pipeline project, there are now tentative signs that opposition to it may be softening.

According to Jens Mueller, a spokesperson[vi] for the Nord Stream project, pointed out on July 6th,2016, They  do not see the European Union’s pressure on the four countries – Germany, Sweden, Denmark and Finland, whose exclusive economic zones will be used for the installation of the pipeline, while drew attention to the  fact that about the necessity for the  fulfilment of all the requirements of EU legislation. On the basis of Nord Stream perception, They do not feel the EU Commission’s intention to block the project, but   its intention to make  the NS2 project  comply with the relevant EU laws."

 

An agreement on NS2, involving the expansion of the original Nord Stream gas pipeline, was signed in early September 2014, during the Eastern Economic Forum in Vladivostok, Russia.  In April 2017, Nord Stream 2 AG, a venture of Russian’s Gazprom energy giant and its European partners, signed a deal with OMV, Engie, Royal Dutch Shell, Uniper and Wintershall where the five firms agreed to provide half of long-term financing, estimated at $10.3 billion. On the basis of the expectation of NS2 supporters, it will come online at the end of 2019, would supply gas directly from Russia’s Baltic coast to the German port of Greifswald, doubling the capacity of Nord Stream 1, an existing line. Its defenders, including a consortium of five European firms that will cover half its cost of €9.5bn ($10.6bn), say that it will help plug a projected gap between Europe’s stable demand for gas and declining production in the Netherlands and North Sea. Germany’s government, especially the Social Democratic Party (SPD), the junior coalition partner, shares this view.(Gerhard Fritz Kurt Schroder who is a German politician, and served as Chancellor of Germany from 1998 to 2005.  As a member of the SPD of Germany, he led a coalition government of the SPD and the Green so a former SPD chancellor of Germany, chairs NS2’s board.) Some Germans silently hope that NS2 could transform their country into a European energy hub.

Such arguments strike sceptics, the countries like Poland and the Baltic states, energy experts at the European Commission, foreign-policy hawks and a handful of German renegades as myopic. Recalling the fact , Nord Stream-2, a gas pipeline which Russia’s gas monopoly Gazprom wants to build under the Baltic Sea, will not have any direct effects on Lithuania, CEO of Klaipedos Nafta (Klaipeda Oil), Lithuania’s state-controlled energy terminals operator, has said, adding that the new gas pipeline project raised concerns to Poland, which may have to pay a higher price for gas according to  Baltic Course International Magazine, in November 2015   “Poland’s reaction to that is very strong since it [the pipeline] may have a direct effect on Poland, which also has a certain transit flow passing its territory, and Poland may find itself in a situation where it will no longer receive gas directly through Belarus but will have to get it from the Germans, which will involve payments to the Germans for transportation”, Mantas Bartuska told members of the parliamentary Committee on Economics on November 2015. NS2, they said, might lower fees for Germans but raises them for eastern Europeans further down the chain. It undermines the European Union’s stated aim to diversify its sources of energy while allowing Gazprom, the Kremlin-backed energy giant, to bypass existing pipelines in Ukraine, depriving the Ukrainians of lucrative transit fees. By squeezing current supply routes, NS2 might also leave Ukraine obliged to negotiate cap-in-hand with its arch-enemy (Kiev has not imported gas directly from Gazprom since 2015). Gazprom has proved willing to wage energy wars before. “Why subsidize to its arsenal” was the question.  To this flaming brew has been added America’s toxic Russia politics.

 

Earlier in June 2016 the Senate passed a bipartisan bill that would, among other things, allowed the Treasury to slap sanctions on foreign companies that invest in Russian pipelines. While The bill was not yet law and awaited debate in the House of Representatives, and Donald Trump has yet to opine on its merits. The move shocked Europe’s firms and infuriated some of its politicians. “Europe’s energy supply is Europe’s business, not that of the United States of America,” thundered Germany’s foreign minister, Sigmar Gabriel, and Austria’s chancellor, Christian Kern, in a joint statement. The pair were particularly incensed that the bill included a call to increase American exports of liquefied natural gas, implying that blocking Russian gas was partly an effort to help American energy companies. Angela Merkel, Germany’s chancellor, let it be known that she supported her minister. The timing of the Senate bill is awful. On June 26th 2016 the EU’s 28 governments began debating whether to allow the European Commission to negotiate the terms of NS2 directly with Russia. Mrs. Merkel argues that EU institutions have no business intruding in a purely commercial enterprise. But countries like Sweden and Denmark, which must grant environmental permits if the project is to proceed, want the commission to get involved so that they are not left alone to stare down the Kremlin. Foes of NS2, like Poland, think bringing in the commission might be a way to slow the project down. The discussion will be a fascinating test of Germany’s ability to sway opinion inside the European club.

For observers who see Mrs. Merkel as Mr. Putin’s main European challenger, her position was perhaps the leading puzzle. The chancellor helped broker negotiations between Russia and Ukraine. Against domestic and foreign opposition, she has held the line on the EU’s sanctions against Russia over its land grabs. Her strategy sounds like a textbook case of European leadership, placing German interests to one side for the greater cause of EU unity and resistance to outside aggressors. But the chancellor’s implicit yet clear support for NS2 suggested that a correction may be in order. Her commitment to Ukraine was not in doubt, and she was infuriated by Mr Putin’s deceits. But Germany has never accepted the mantle of European or global leadership that so many would like to thrust upon it, especially when it comes to the politics of “ENERGY”. Outsiders should not be surprised to see it behave like any other European country favoring its own consumers and firms (two of the five companies investing in NS2 are German). American intervention may only strengthen Germany’s resolve to protect its commercial interests. Those expected to slow NS2 would do better to look to Brussels. The commission would be pleased to smother the pipeline in bureaucracy, should the EU’s governments give it a chance. Its legal brains said that EU energy law does not apply to offshore pipelines outside the internal market. But the commission dislikes NS2 and distrusts Gazprom, which it thinks abuses market dominance. According to    one official, If Gazprom was Statoil ASA which is Norwegian multinational oil and Gas Company headquartered in Stavanger, Norway. It is a fully integrated petroleum company with operations in thirty-six countries.  They wouldn’t have a problem So in that point , NS2 was  yet be asked to conform parts of EU law, including third-party access to the pipeline and transparency on pricing. Ukrainian anxieties might have been dispelled by insisting that Gazprom commit to preserving supply through existing pipelines after 2019, when the current contract expires. So on the basis of all those observation, and methods proposed to be pursued this would ease uncertainties that NS2 would leave parts of Europe in hock to the Russians for decades to come.

 

Recalling the fact that in late June 2017 Angela Merkel said Nord Stream 2 is no one’s business but Germany’s meanwhile. So The law signals an exodus from a joint EU-US approach to Russian sanctions. And some of the European countries have economic concerns because the new law could penalize European companies that invest in big Russian infrastructure projects such as the new Nord Stream II (NS2 ) pipeline to transport gas between Russia and Germany. The German Foreign Minister, Sigmar Gabriel, and Austrian Chancellor Christian Kern said this part of the new sanctions programme would add a new negative dimension to US-European relations and Europe's energy supplies were "a matter for Europe, not for the United States".

Germany is said to be pushing for EU sanctions against Russia to be stepped up, according to diplomatic sources quoted in Brussels.

The government in Berlin is said to want four Russian nationals and businesses added to the European bloc's sanctions list after it was revealed gas turbines made by German technology firm Siemens were illegally shipped to Crimea. Siemens said it had "credible information" that its equipment had been diverted from its original destination. Any change in sanctions would have to be agreed by all 28 EU member states.

 

On the basis of NYT   European Union officials are worried about a move to harden United States sanctions against Russia, saying they may cause upheaval in Europe’s energy market. Nonetheless as usual, the 28-nation bloc is divided, with central European countries more willing to limit the bloc’s dependence on Russian oil and gas.[vii] The new round of sanctions has been driven by the United States Congress, which is intent on punishing Russia for its meddling in last year’s presidential election. The House overpoweringly approved sanctions legislation in  July 2017. Bipartisan support in Congress for the new sanctions was so strong that the White House has suggested that President Trump will sign the bill that emerges.

 

Actually new sanctions have important implications for Europe because they target any company that contributes to the development, maintenance or modernization of Russia’s energy export pipelines. That would almost surely affect a controversial pipeline project between Russia and Germany known as NS2, which is owned by Gazprom but includes financial stakes from European companies. The project aims to carry Russian natural gas under the Baltic Sea, bypassing countries like Ukraine, Poland and the Baltic States. The new pipeline, in rough parallel to the existing Nord Stream 1, is being built to carry another 55 billion cubic meters of natural gas per year, underscoring Europe’s continuing need for Russian energy.


According to  Margaritis Schinas European Commission spokesman, they are following the draft bill on Russia sanctions with some concern, notably because of its possible impact on the E.U.’s energy independence.

 

Jean-Claude Juncker, the president of the European Commission, the bloc’s bureaucratic arm, has called for an urgent review of how the European Union should respond.
Brussels should be prepared to act “within days” if the sanctions are adopted “without E.U. concerns being taken into account,” argued a position paper drafted by the European Commission dated July 19. The paper said the sanctions could affect the maintenance or upgrading of existing pipelines from Russia into Ukraine and elsewhere around the Caspian Sea. Additionally, it raised concerns that unity could be broken between the United States and the European Union on how to deal with Russia over its annexation of Crimea and its sponsorship of warfare in eastern Ukraine. The European Union which does much more business with neighboring Russia than the United States imposed a series of sanctions on Russia, including on specific energy companies, beginning in 2014 over its actions in Ukraine.

 

The new sanctions would add punishments against Russian energy, financial, rail, shipping and metals and mining sectors. The European Commission was seeking assurances from Washington that, if passed, the new measures would not be applied in a way that affects European Union interests or energy companies. It has suggested that European law could be used to prevent the application of “extraterritorial” measures by the United States, and it hinted at trade retaliation. The tensions over the potential new sanctions on Russia come on top of other latest disputes on trade issues with the Trump administration.    European Commission President Jean-Claude Juncker earlier threatened rapid retaliation in response to Mr. Trump’s contemplated new punitive tariffs on steel imports, which would affect more than a dozen countries, including some in Europe. “We are prepared to take up arms if need be,” he said on 7th July 2017. at the G-20 summit meeting held in  Hamburg. Avenging targets for the bloc could include American whiskey imports. “I don’t want to tell you in detail what we’re doing,” Mr. Juncker said then. “But what I would like to tell you is that within a few days — we won’t need two months for that we could react with countermeasures” Russia has been greeting the prospect of a new round of American sanctions with a certain coolness, waiting to see what the White House will do and expecting reciprocal action by President Vladimir V. Putin. Russian analysts have focused more on the sparring between Congress and Mr. Trump over Russia policy than on any fallout at home. Depending on the final version of the bill, the most immediate impact is expected in the oil and gas sector, including deals involving Russian-state-run companies outside its borders, and on investments from abroad. “The sanctions bill leaves no space for compromises and galvanizes America’s hostile policy toward Moscow for decades ahead,” Ivan Timofeev, program director of the Valdai discussion club, a Kremlin effort to court Russian experts abroad, wrote on the group’s website.


Russia routinely blames the United States of using sanctions to further its own interests, and this time is no exception. Alexey Pushkov, a legislator and frequent commentator on international relations, wrote on Twitter: “The exceptional nation wants to block Russian gas supplies to Europe and to sell expensive shale gas from the U.S. to its European servants. That’s the entire ‘morality’ of Congress. “Russians appeared to be giving little credibility to the idea that American antagonism over Russian cyberattacks during the election might be playing a role.

 

On  the basis of  New York Times on  31 July Russia is preparing to send as many as 100,000 troops to the eastern edge of NATO territory at the end of the summer, one of the biggest steps yet in the military buildup undertaken by President Vladimir V. Putin and an exercise in intimidation that recalls the most threatening days of the Cold War. The troops are conducting military maneuvers known as Zapad, Russian for “West,” in Belarus, the Baltic Sea, Western Russia and the Russian exclave of Kaliningrad. The drills will feature a reconstituted armored force named for a storied Soviet military unit, the First Guards Tank Army. Its establishment represents the first time since the collapse of the Soviet Union that so much offensive power has been concentrated in a single command. The military exercise, planned for many months, is not a reaction to sweeping new economic sanctions on Russia that Congress passed last week. So far, Russia has retaliated against the sanctions by forcing the expulsion of several hundred employees in American diplomatic posts in the country.

 

Obviously the move is part of a larger effort by Mr. Putin to shore up Russia’s military ability, and comes against the backdrop of an increasingly assertive Russia. Beyond Russia’s interference in the 2016 presidential election in support of the Trump campaign, which has seized attention in the United States, its military has in recent years deployed forces to Syria, seized Crimea and intervened in eastern Ukraine, rattled the Baltic States with snap exercises and buzzed NATO planes and ships. Punishing sanctions by the United States and European allies that have isolated Russia further have done nothing to cease Mr. Putin’s saber-rattling, as illustrated by the long-scheduled Zapad exercise.

 

 

In conclusion, it is obvious that, the cards are reshuffled after Turkey has agreed to buy Russia's advanced missile-defense system, Russian S-400 leaving NATO (also USA ) wondering what's next,  which puts a big anxiety box  on Washington’s  Atlas  [viii]shoulder. In the meantime there is another force orchestrating the power play “The V for Vladimir”  which is “the power of energy” On the basis of the recent developments including “a tour de force“ in favor of Russia  and looking at the dynamics of energy sectors ,” V”  seems in a state of triumphs over Trump  for a while which conjures up the images of saying “ the one who look like a loser maybe a winner in the end thanks to the power of ENERGY  apart from the defense strategy and  military force ”


 


[i]  Metaforically,the relevance assigned  only  with the purpose of  ringing a bell  with  “vocal sound “connotation of words”  rather than linking to  the subject of the dystopian political thriller  movie “ V for Vendetta”  No humiliation or hate purpose is intended here.

[iv] Reality Check: What are the sanctions against Russia? 25 July 2017  From the section US & Canada http://www.bbc.com/news/world-us-canada-40720673

 

[vi] Unclogging the issues blocking Russia's Nord Stream 2 pipeline Jul 8, 2016James Henderson

http://www.russia-direct.org/opinion/unclogging-political-issues-blocking-russias-nord-stream-2-pipeline   

 

[vii]  NewyorkTimes .U. Is Uneasy, and Divided, About U.S. Sanctions on Russia By Steven Erlanger and Neil Mac FARQUHAR JULY 25, 2017  https://www.nytimes.com/2017/07/25/world/europe/eu-uneasy-about-impact-of-new-us-sanctions-on-russia.html

 

[viii] Metaphorically  here the word  Atlas  used on purpose for all 3 meaning  -Atlas  triple meaning  1)  Greek mythology, Atlas  2) Biology  3 ) Map

  

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