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Copper Tip Energy Services
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Copper Tip Energy

Merkel Says U.S. Pipeline Deal Is ‘Good Step’ Despite Tensions

These translations are done via Google Translate

(Bloomberg) Chancellor Angela Merkel called a fresh agreement with President Joe Biden over the Nord Stream 2 gas connection a “good step” even if it leaves lingering transatlantic tension over how to respond to Russia.

Less than a week after Merkel’s Washington visit for talks with Biden, the U.S. and Germany sealed an agreement on Wednesday that accepted the completion of the pipeline and saw Berlin commit to action against Russia if the Kremlin uses its energy infrastructure as a “weapon.”

Merkel’s government said that Germany will respond to malign activity from Russia with unspecified bilateral action and European Union-level sanctions. The two NATO allies also pledged to keep gas flowing through Ukraine, an economic lifeline for the former Soviet republic that could be destabilized if Moscow uses the new pipeline to re-route gas deliveries.

“It’s a good step that required readiness for compromise from both sides beforehand,” Merkel told reporters in Berlin on Thursday. “But on the other hand, it doesn’t overcome all the divergences that were there before.”

The Biden administration was seeking to avoid a confrontation with a key European ally and backed off from measures to halt the construction of the project, arguing that Nord Stream 2 was already a fait accompli.

The deal may do little to assuage the U.S. Congress, where Republican Senator Ted Cruz of Texas called the accord a “complete and total capitulation” to Putin.

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Merkel insisted that the EU still has leverage with the threat of sanctions, which it imposed on Russia after its seizure of Crimea from Ukraine in 2014. She also reiterated that she’s confident that a gas-transit agreement brokered between Russia and Ukraine can be extended beyond 2024.

“It doesn’t mean that we’re completely defenseless on our side, if you look at the political framework within which this project is being built,” Merkel said.

The German leader pushed back on swift criticism from Ukraine and Poland, which said the bilateral agreement “can’t be considered sufficient” to limit Russia’s threat and Nord Stream 2 should be stopped.

Asked whether she prizes relations with Russia above those of Ukraine and Poland, she said: “No, not at all. It’s not about that.”

The U.S.-German declaration includes $1 billion in a so-called Green Fund to help Ukraine’s transition to cleaner sources of energy, a deal that’s “good for Ukraine,” Merkel said.

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