From Rome to Riga: Why German efforts to read Blinken’s mind on Nord Stream 2 are probably misplaced

The Financial Times had an interesting piece recently about the tea leaves some German policymakers have been peering at to figure out how the new US administration will approach the Nord Stream 2 project. “Ally Versus Ally: America, Europe, and the Siberian Pipeline Crisis,” a book written by US Secretary of State Antony Blinken during his law school days, is supposedly “one of the most-read items among German foreign policy experts these days.” And it appears to be providing solace to those that support Gazprom’s $11 billion pipeline hobbled by US sanctions. “My impression is that [he] doesn’t think sanctions are the right way to deal with an ally, and we trust him,” said a CDU MP after reading the book.

But could a book written about Reagan’s handling of the Urengoy–Pomary–Uzhhorod pipeline really give perspective on how the author would treat a similar project in today’s Europe? 

As Biden addressed the Munich Security Conference on Friday, Feb. 19, the State Department sent Congress a report that listed the companies potentially subject to sanctions given their involvement in Nord Stream 2. The Administration has repeatedly called the project “a bad deal” for Europe – a gentle euphemism to brush over the significant risks to European energy security and independence many see it as posing. Nevertheless, the lack of new targets prompted disappointment from several lawmakers and signaled to some that the administration was willing to buy time to work on the issue with Germany, which will be a key ally in negotiations on the Iran deal and on curbing Chinese influence.  

In his book, Blinken’s argument against sanctions in the case of the Urengoy–Pomary–Uzhhorod pipeline, according to the Financial Times, was that “it was more important for Washington to nurture its allies than dictate their economic relations with Moscow.”

A quick reading of how the crisis played out shows that Blinken may have been right. Reagan and Congress feared the pipeline would “make West European participants overly dependent on Soviet natural gas and equipment orders and, thus, vulnerable to Soviet threats to cut off the gas in a political crisis” as well as provide convertible currency to the USSR. Reagan, first, imposed sanctions in 1981 on American companies furnishing equipment to the project, before expanding sanctions in 1982 to any European companies involved using American technology. The European Economic Community then sent a joint statement to the US calling its sanctions against the pipeline illegal. Reagan eventually backed down and let the pipeline move forward, limiting punitive measures to American companies.

In the case of Nord Stream 2, the European Union has not issued a joint statement, but Josep Borrel condemned the US sanctions in July 2020 as “against European companies and interests” and as also as illegal. A communication on economic sovereignty in 2021, he said, would address the issue. Indeed, the Commission’s January communication outlines a broad strategy against “extra-territoriality” (European term often used to describe American legal provisions with international impact) and its willingness to the deploy the Blocking Statute, “the EU’s unified response to the extra-territorial application of third-country measures, in particular secondary sanctions, on EU operators.” So why would Blinken, now in office, act any differently than what he advocated in his book? 

Well, let’s put aside the idea that people can change opinions over the course of three decades. One difference between the current tension of NS2 today and the Siberian Pipeline Crisis that Blinken analyzed is that, at the time, the alternative United States had to offer Western Europe was its coal, which cost too much for them to import and process. Now, the US is pushing its own liquid natural gas which, until a few years ago, it had barred itself from exporting for decades. But a much greater change since the 1980s that German policymakers must keep in mind, not only for this predicament but for any future diplomacy with the US, is that the Biden Administration is not dealing with the same European bloc and therefore not the same ally.

In 1982, when Reagan received the joint statement in response to his expansion of sanctions to European subsidiaries, the EEC (the precursor to the EU) was made up of 10 members, and mostly chaperoned by a Franco-German partnership. The most easterly of these countries was Greece, which had joined the year before.  French and German corporations participated in the project designed to bring Russian gas into Ukraine, which would then be transported into the West European natural gas network.

Things are no longer so simple. Today, Biden is faced with a 27-member European Union that includes Poland and the Baltic States, all hostile to the Nord Stream 2 project. Its current Commissioner on Trade is Valdis Dombrovskis, Latvia’s former Prime Minister who said in 2009 that Nord Stream was “not inline” with the EU’s common energy policy. Former soviet satellites, which are wary of Gazprom gaining a footing in Germany and Russia thereby having more leeway to turn off its gas supply to Ukraine when it feels like it, are now a part of the voice that represents Europe. In 2016, eight Central and Eastern European member states sent a letter to the EC arguing that the project would undermine European energy security and warning of its “potentially destabilising political consequences.”

German policymakers may want to reconsider the faith they’ve put into Blinken’s book as a proxy for his diplomacy in the 21st Century. 18 companies have recently quit the Nord Stream project due to the prospect of ongoing sanctions. After four years of belittlement of the transatlantic partnership from the Trump Administration, Biden is wisely treading softly in reengaging the EU. But today’s EU is certainly not the EEC of the 1980s. As Biden said in his remarks at the Munich Conference, the US will work with “its European partners and the capitals across the continent” which now stretch “from Rome to Riga.”

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