Photo Source:
National Institute of Advanced Studies (NIAS)
Indian Institute of Science Campus, Bangalore
For any further information or to subscribe to GP alerts send an email to subachandran@nias.res.in
NIAS Europe Monitor
Nord Stream 2 is Russia’s geopolitical victory
Sarthak Jain
|
The pipeline overcame challenges, but its operation in the European Union are yet to face additional obstacles.
The highly debated gas pipeline project, Nord Stream 2 is set to meet the demands of the EU’s energy sector. Numerous attempts were made to stop the project through different channels. However, both Russia and Germany stood firm and completed the project.
The Opposition and Sanctions
The initial opposition came from the eight Eastern European countries. Following their concerns, in December 2019, Allseas, a Swiss company suspended pipe-laying works over US sanctions and recalled its ships. The work resumed in December 2020. The temporary suspension of the project resulted in Gazprom suffering heavy losses. Gazprom was fined USD 7.67 million by Poland’s competition regulator UOKiK, for failing to secure permission for constructing the pipeline. It also imposed penalties close to USD 6.5 million to the co-financing companies, which include Germany’s Wintershall and Uniper groups, the Dutch-British giant Shell, France’s Engie, and Austria’s OMV as partners.
Navalny’s arrest sparked the EU to overwhelmingly vote to halt the project. Having proceeded with the project, Angela Merkel faced criticism for being unable to take action against Russia. The Companies providing for services in insurance, certification, security, civil engineering, and other equipment were subject to sanctions by the US State Department. These 18 companies hailing mostly from the West, were threatened with asset freezes and visa restrictions of their employees.
Russia’s economic compulsions
The Russian economy is dependent on oil and natural gas export. In early 2020, The Russian Federal State Statistics Service’s (Rosstat) data showed that the country’s dependence on oil and gas has increased in the last eight years despite the government’s will to diversify the trade. Traditionally, Russia has depended on the demand emanating from the European energy market. Gazprom generates 70 per cent of its revenue from the EU market. It contributes close to four per cent to Russia’s GDP. The project also reduces the transit fees and its dependency on other countries. Russia is unlikely to renew a 10-year contract with Ukrainian Naftogaz. If the transit line ends its operations, Kyiv will suffer a massive loss of transit fees. It was critically important to keep Ukraine away from the equation of trade for geopolitical reasons.
According to Anders Åslund, a resident senior fellow in the Eurasia Center at the Atlantic Council, Russia’s larger aim is to create a rift in the European Union. An alliance with Germany, Austria, Netherlands and Belgium, will give Russia a much-needed edge in the continent. In October 2015, Putin met Germany’s the then Minister of Economy and Energy Sigmar Gabriel. He was quoted saying, “This is in our interests…What’s most important as far as legal issues are concerned is that we strive to ensure that all this remains under the competence of the German authorities, if possible. So, if we can do this, then opportunities for external meddling will be limited. And we are in a good negotiating position on this matter.” The remarks hint at the geopolitical importance of the project, and the competition now marks Russian success.
What next?
The project will initiate its operations soon, but the problem for Nord Stream 2 has not ended. The threat ranges from changing governments to a hike in competition. In Germany, the full-fledged support for the project comes from the extreme right, the Alternative for Germany, and the extreme left, Die Linke. In contrast, Germany’s Greens have plans to abolish Nord Stream 2. The Free Democrats are also predominantly negative. A major setback for the project was the exit of DNV GL, a company that provides for the safety of the pipeline and technical verification services. This move robbed the project of having an international safety standard. Leading to this, several European regulators might face difficulty to allow gas distributions.
US LNG exports are progressing in the EU market. The US sales of LNG were estimated to be 36 per cent of its total export. In 2020, the US energy information administration shows that the sales increased three per cent as compared to last year. There are chances that EU members could look for new domestic energy sources. Feasible options are shale gas and renewable energy, given the already existing investments in clean energy.
To conclude, the US plans to expand its area of trade in LNG, and it is targeting the European market. Needless to say, the huge project of 9.5 billion Euros faced a barrage of sanctions from the US in view to take down its competitor. The pipeline was widely discussed and criticized by the EU collectively, sighting geopolitical leverage that Russia will have. Governments also challenged its legality and pushed for halting construction. However, Kremlin and Berlin were determined to push all adversaries away, and they succeeded.
Russians have enjoyed a position of being the single most influential energy provider to Europe. As the project becomes operational, Russia has placed itself strongly in the European market. Nord Stream 2 removes Ukraine from the transit route, which opens an option for military actions against it and assures the EU’s dependency on Gazprom for LNG. Even though the Kremlin hinted about the inclusion of Ukraine, it will only happen when a pro-Russian government comes in power. It is also crucial to note that the pipeline is not certified as per international standards. This has compelled countries to amend regulations and provisions to avoid legal questioning within the country.
Bookmark |
Alka Bala
25 Years of Euro: What lies ahead?
Padmashree Anandhan
Ireland: Four reasons why Prime Minister Leo Varadkar resigned
Padmashree Anandhan, Femy Francis, Rohini Reenum, Akriti Sharma, Akhil Ajith, Shamini Velayutham and Anu Maria Joseph
Expert Interview: Russia in the International Order
Padmashree Anandhan
The War in Ukraine: Drones, missiles and counterattacks
Padmashree Anandhan
Poland elections 2023: Reasons behind the shift
Padmashree Anandhan
Ukraine: The failure of the Black Sea Grain Initiative
Annem Naga Bindhu Madhuri
Issues for Europe
Yogeswari S | CSIS
Poland’s engagement
Feben Itty | CSIS
NATO’s Challenge
Genesy B | abcnews
Russia’s Endgame
Sreeja JS
Ukraine’s Strategies and Endgame
Sneha Surendran
Wildfires in Europe: Another year of devastation
Rishika Yadav
Floods in Europe: Impacts, and issues
Padmashree Anandhan
Return of the Heatwaves
Indrani Talukdar
Ukraine War and the International Order
Himani Pant
Germany-Russia Relations: What Next?
Ramya Balasubramanian
Russia and Europe: Understanding Moscow’s strategies
Lakshmi Parimala
Hybrid Warfare in Ukraine
Padmashree Anandhan
Rise and fall of the Wagner Revolt: Four Takeaways
Sneha Surendran
The Wagner Revolt: A profile of Yevgeny Prigozhin
Padmashree Anandhan
The War in Ukraine: Four Issues to watch in 2023
Harini Madhusudan, Rishika Yada, Sneha Surendran, Prerana P, Sreeja JS and Padmashree Anandhan
Russia: Anatomy of Wagner Revolt, and its Fallouts
Rishika Yadav, Sreeja JS, Nithyashree RB, and Melvin George | Rishika Yadav is a Research Assistant in NIAS Europe Studies at NIAS. Nithyashree RB, Sreeja JS, and Melvin George are Research Interns in NIAS Europe Studies at NIAS.
The Battle for Bakhmut: Significance, Objectives, Course, and What Next
Nithyashree RB
Poland approves Russian Influence Law: Three Implications
Rishika Yadav | Research Assistant, National Institute of Advanced Studies, Indian Institute of Science Campus, Bangalore
Serbia: Mass shootings, protests and instability
Rishika Yadav and Nityashree RB | Research Assistant and Research Intern, National Institute of Advanced Studies, Indian Institute of Science Campus, Bangalore
Turkey’s Elections: Unravelling the Political Spectacle of 2023
Padmashree Anandhan | Research Associate National Institute of Advanced Studies, Bangalore
Belgorod drone attacks: Who, What and Why?
Indrani Talukdar
Russia's Position in the Arctic: New challenges
Rishika Yadav
Turkey’s Election: Issues, Actors and Outcomes
Padmashree Anandhan
Pentagon document leak: Russia-Ukraine Conflict From a Tactical Lens
Indrani Talukdar
Belarus’s endgame in Russia-Ukraine Conflict
Padmashree Anandhan
Russia: Drone attacks escalate the Ukraine war
Padmashree Anandhan
The UK: Conservative party put to test as worker strikes continue
Harini Madhusudan, Rishma Banerjee, Padmashree Anandhan, Ashwin Immanuel Dhanabalan, and Avishka Ashok
What next for Russia, Ukraine, Europe, South Asia & India, and China
Padmashree Anandhan and Rishma Banerjee
UNGA 77: Who said what from Europe?
Rashmi Ramesh
Ice Melt in Alps in Europe: Three impacts
Rishma Banerjee
Tracing Europe's droughts
Padmashree Anandhan
Major causes behind Europe’s continuing heatwaves
Emmanuel Selva Royan
100 days of the Ukraine war: US Responses in the war
Padmashree Anandhan
100 days of the Ukraine war: What next for Europe?
Ashwin Immanuel Dhanabalan
100 days of the Ukraine war: More loss than gain for Russia
Angelin Archana | Assistant Professor, Women’s Christian College, Chennai
China's response to the Ukraine crisis: Shaped by its relationship with Russia and EU under the US Shadow
Shreya Upadhyay | Assistant Professor, Christ (Deemed to be University), Bangalore
Transatlantic Ties in the Wake of Ukraine-Russia War
Uma Purushothaman | Assistant Professor, Central University of Kerala, Kerala
Ukraine and beyond: The US Strategies towards Russia
Debangana Chatterjee | Assistant Professor, JAIN (Deemed-to-be University), Bangalore
Lessons from Ukraine War: Effectiveness of Sanctions
Himani Pant | Research Fellow, ICWA, Delhi
Ukraine and beyond: What next for Russia and Europe?
Sourina Bej
Elections in Sweden
Padmashree Anandhan
Italy's far-right wins 2022 elections
Padmashree Anandhan
Putin’s address in the Valdai Discussion: Six takeaways
Padmashree Anandhan
Queen Elizabeth: End of an era
Padmashree Anandhan
Russia and Eastern Economic Forum 2022: A sturdy Far East
Padmashree Anandhan
Who will be the next UK prime minister: Liss Truss v. Rishi Sunak
Padmashree Anandhan
France: Uber files leak, and Macron’s trouble
Emmanuel Selva Royan
Italy: Three factors about its current political instability
Padmashree Anandhan
What does Macron's victory mean for France and the EU
Rishma Banerjee
The rise of Marine Le Pen
Sourina Bej
Four challenges ahead for President Macron
Ashwin Immanuel Dhanabalan
Lecture report: Ukraine, Russia and Europe
Joeana Cera Matthews
Into History: Northern Ireland and Bloody Sunday, 50 years later
Padmashree Anandhan
Munich Security Report: Six takeaways
Joeana Cera Matthews
Europe and Africa: An elusive search for an equal partnership
Ashwin Immanuel Dhanabalan
Femicides in Europe: The case of France
Padmashree Anandhan
Post Brexit: Three challenges in Northern Ireland
Ashwin Immanuel Dhanabalan
Lithuania and China: Vilnius has become Beijing’s Achilles heel. Four reasons why
Angelin Archana
Russia in 2021: Expanding boundaries
Joeana Cera Matthews
In Europe, abortion rights are "a privilege." Four reasons why
Padmashree Anandhan
Mapping COVID-19 protests in Europe: Who and Why
Vaishnavi Iyer
France, Algeria, and the politics over an apology
Joeana Cera Matthews
NATO-Russia relationship: Looking beyond the suspensions and expulsions
Padmashree Anandhan
Facebook's Metaverse: Why it matters to Europe
Joeana Cera Matthews
Poland, EU and PolExit. It is complicated, for three reasons
Harini Madhusudhan
Europe's Energy Crisis and Gazprom
Chetna Vinay Bhora
Europe's Energy Crisis: It could get worse. Five reasons why
Sourina Bej
France: Paris Terror Trial
Harini Madhusudan
Belarus: Weaponization of the Migrant Crisis
Joeana Cera Matthews
From Crimea to Navalny: Putin's calibrated Europe strategy
Joeana Cera Matthews
Nord Stream-2: Why is the region unhappy about the pipeline?
Sarthak Jain
Nord Stream 2 is Russia’s geopolitical victory
Keerthana Rajesh Nambiar
The EU Summit 2021: Five Takeaways
Chetna Vinay Bhora