The U.S. and Germany released a hotly-anticipated joint statement after reaching a deal on July 21 on the controversial Nord Stream 2 pipeline.
The agreement could solve a long-running dispute over the $11 billion pipeline running along the coast of the Baltic Sea to carry gas from Russia to Germany, now 98% complete.
The U.S. and Germany have long been at odds over the risks and benefits of the pipeline. Germany views it as an economic priority and a way to import cheap energy into the country.
According to the new statement, Germany and the U.S. agreed to take potential unspecified actions against Russia if it cut off energy supplies to Ukraine, in addition to seeking European Union sanctions.
“This commitment is designed to ensure that Russia will not misuse any pipeline, including Nord Stream 2, to achieve aggressive political ends by using energy as a weapon,” the U.S. and German governments wrote in the joint statement.
In response, Ukraine demanded formal talks with Brussels and Berlin on the pipeline, weeks before President Volodymyr Zelensky first official visit to the U.S., planned for Aug. 30.
Ukrainian Foreign Minister Dmytro Kuleba also released a joint statement with his counterpart in Poland, saying efforts to allay their concerns “cannot be considered sufficient,” calling on the U.S. and Germany to adequately address the security crisis in the region.
German compensation
In Germany, top members of the environmentalist Greens party, called the reported agreement “a bitter setback for climate protection” that would benefit Russian President Vladimir Putin and weaken Ukraine.
In the agreement, Germany stated it would provide technical assistance to “increase the capacity for reverse flows of gas to Ukraine, with the aim of shielding Ukraine completely from potential future attempts by Russia to cut gas supplies to the country.”
Berlin will appoint a special envoy to help Ukraine negotiate an extension of its gas transit deal with Russia beyond 2024, the current expiration year.
Russia and Ukraine have a five-year agreement through 2024 that guarantees Russia will transport no less than 40 billion cubic meters through Ukraine each year and must pay Ukraine at least $7.2 billion over the course of the contract.
Germany will also create and administer a $1 billion green fund for Ukraine to support its energy transition beyond fossil fuels, with at least an initial $175 million commitment.
Ukraine needs that money because if completed, Nord Stream 2 would allow Russia to bypass Ukraine when transporting an annual 110 billion cubic meters to European countries through Germany, depriving Ukraine of at least $1.5 billion in transit fees per year.
Vague guarantees, no new sanctions
The lack of new clear sanctions from U.S. President Joe Biden’s administration attracted the attention of U.S. lawmakers. Biden is facing bipartisan backlash to the agreement, according to the news website Politico.
Biden, who publicly called the pipeline a “bad deal for Europe,” has so far resisted imposing new sanctions on entities involved in the construction of Nord Stream 2.
Russia’s state-owned gas company Gazprom owns the Switzerland-based company that operates the project and faces U.S. sanctions under the National Defense Authorization Act (NDAA) passed on Jan. 1.
But around half of the initial financing for the 9.5 billion euro ($11 billion) project has been pledged by five European energy companies, including Uniper and Wintershall in Germany, the British-Dutch giant Royal Dutch Shell, OMV in Austria and Engie in France.
So far, U.S sanctions spared those energy giants, even though U.S. lawmakers argued it would be the most effective way to stop the project.
“Once (the pipeline) is up, the vulnerabilities are going to be there,” Ben Cardin, a Democrat lawmaker said to Politico, while Republican lawmaker Ted Cruz called the agreement “a generational geopolitical mistake.”
“Russian dictators decades from now will be reaping billions of dollars every year from Joe Biden’s gift,” Cruz said.
The agreement came days after Politico reported that Biden’s administration allegedly urged Ukraine to “stay quiet” and “not make waves” as the U.S. was negotiating with Germany a “grand bargain” in exchange for greenlighting the controversial pipeline project.
According to the story, the Biden administration said that the U.S.-Ukraine relationship would be damaged if Ukraine, unhappy with its partners’ approval of Russia’s Nord Stream 2 project, would speak up about it.
Counselor of the U.S. Department of State Derek Chollet, visiting Kyiv on July 21, denied the report.
“Ukraine is a democratic country, it has its own voice,” he said in an interview with Radio Free Europe/Radio Liberty.
