Less than a day after the Senate overwhelmingly voted to impose new sanctions against the Kremlin, on Thursday Germany and Austria - two of Russia's biggest energy clients in Europe - slammed the latest U.S. sanctions against Moscow, saying they could affect European businesses involved in piping in Russian natural gas.
Shortly after the Senate voted Wednesday to slap new sanctions on key sectors of Russia's economy over "interference in the 2016 U.S. elections" and aggression in Syria and Ukraine, in a joint statement Austria's Chancellor Christian Kern and Germany's Foreign Minister Sigmar Gabriel said it appeared that the Senate bill was aimed at securing US energy jobs and pushing out Russian gas deliveries to Europe.
Gabriel and Kern also accused the U.S. of having ulterior motives in seeking to enforce the energy blockade, which they said is trying to help American natural gas suppliers at the expense of their Russian rivals. And they warned the threat of fining European companies participating in the Nord Stream 2 project "introduces a completely new, very negative dimension into European-American relations."
In their forceful appeal, the two officials urged the United States to back off from linking the situation in Ukraine to the question of who can sell gas to Europe. "Europe's energy supply is a matter for Europe, and not for the United States of America," Kern and Gabriel said. The reason why Europe is angry Some Eastern European countries, including Poland and Ukraine, fear the loss of transit revenue if Russian gas supplies don't pass through their territory anymore once the new pipeline is built.
While the diplomats said that it was important for Europe and the US to form a united front on the issue of Ukraine, "we can't accept the threat of illegal and extraterritorial sanctions against European companies," the two officials warned citing a section of the bill that calls for the United States to continue to oppose the Nord Stream 2 pipeline that would pump Russian gas to Germany beneath the Baltic Sea. According to AP, half of the cost of the new pipeline is being paid for by Russian gas giant Gazprom, while the other half is being shouldered by a group including Anglo-Dutch group Royal Dutch Shell, French provider Engie, OMV of Austria and Germany's Uniper and Wintershall.
Their concern was echoed by Russia's energy giant Gazprom, whose Deputy CEO Alexander Medvedev said that Senate’s plan for extended sanctions to cover Nord Stream 2 gas pipeline project is a way to secure US LNG in Europe. He also said that the project is proceeding in line with plan and that it has already received more than €1BN from Nord Stream 2 partners, chief among which Germany and Austria.
In light of recent media frenzy in the US, we are skeptical the Senate will undo its decision, lest it too be accused of being infiltrated by KGB spies and colluding with Putin.
Meanwhile, this just hit:
- SENATE HAS VOTES TO PASS BILL ADDING SANCTIONS ON RUSSIA, IRAN