By Birgit Jennen and Brian Parkin
Three Republican Senators wrote this week to the operator of Mukran Port on Germany’s Baltic coast, warning of “crushing legal and economic” sanctions over its involvement in the Nord Stream 2 project. The port — located in Chancellor Angela Merkel’s constituency — is a supply base for the pipeline, as Russian vessels seek to complete the last stretch of the 1,200-kilometer (745-mile) undersea link.
Nord Stream 2, owned by Russia’s Gazprom PJSC, has been a longstanding target for President Donald Trump and one of many bones of contention between Washington and Berlin, along with defense spending, trade policy, and 5G technology. Trump has said the pipeline is a conduit for “billions” of dollars flowing to President Vladimir Putin.
Initial measures he signed in December targeted pipe-laying vessels, throwing completion of the project into disarray. Congress has since backed expanding sanctions. Germany’s BDI industry lobby has identified 120 firms in 12 European countries that would potentially be impacted and estimates that investment worth 12 billion euros ($14.2 billion) is at risk.
“The threatened sanctions would be a major violation of European and national sovereignty and cause economic and political damage,” Joachim Pfeiffer, economic and energy policy spokesman for Merkel’s parliamentary caucus, said Friday by email.
Europe’s priority must be to persuade U.S. officials not to go ahead with new sanctions, but if that fails the European Union should respond with “tough countermeasures,” including possibly tariffs on U.S. LNG, Pfeiffer said.
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Frank Kracht, the mayor of Sassnitz, the municipality on the Baltic Sea that is the port’s majority owner, said by phone Friday that the port will ignore the Senators’ letter, while appealing for help from Merkel.
The port will remanin “steadfast against the threat and will not have its business dictated by U.S. politicians,” said Kracht.
Merkel in early July said new U.S. sanctions against the pipeline were “not compatible” with Germany’s interpretation of legal standards and called for the project to be completed. While the government is looking at potential responses, Merkel’s administration is keen to avoid an escalation of the standoff.
A government spokesman said Friday that the administration has taken note of the Senators’ letter. He reiterated that it rejects unilateral, extraterritorial sanctions as applied by the U.S. against German and European companies. The letter, dated Aug. 5 and seen by Bloomberg, was signed by Ted Cruz, Tom Cotton and Ron Johnson.
Klaus Ernst, head of the lower house of parliament’s economy and energy committee, likened the U.S. threats to blackmail. Germany is being pressured to buy expensive U.S. LNG or suffer the consequences, Ernst said, calling the letter “brazen.”
“Effective countermeasures need to be raised and possibly implemented, such as countervailing duties on American LNG gas,” added Ernst, a member of the opposition Left party.