Germany on Wednesday agreed to warn Russia of potential sanctions and to support Ukraine’s energy sector financially in a deal with the US to settle a bitter rift between the allies over the Nord Stream 2 gas pipeline.
US President Joe Biden’s Republican rivals swiftly denounced the agreement and said it would embolden Russian President Vladimir Putin, but the administration said it was too late to stop the pipeline and the deal instead secured a better outcome.
“This is a bad situation and a bad pipeline, but we need to help protect Ukraine and I feel that we have made some significant steps in that direction,” US Undersecretary of State for Political Affairs Victoria Nuland said as she unveiled details before a US Senate hearing.
Biden, who welcomed German Chancellor Angela Merkel last week, already waived the toughest sanctions required by the US Congress over Nord Stream 2, which would connect Russia and Germany through the Baltic Sea and is expected to be complete within weeks.
The pipeline has been vigorously opposed by many of Russia’s neighbors — especially Ukraine, which has been battling pro-Moscow separatists since 2014.
Ukraine sees the flow of Russian gas through its territory en route to Europe as leverage and an indispensable financial boon, with transit fees bringing about US$3 billion a year.
In a joint statement with the US, Germany said that it had committed to respond to Russia if Ukraine’s fears materialize.
“Should Russia attempt to use energy as a weapon or commit further aggressive acts against Ukraine, Germany will take action at the national level and press for effective measures at the European level, including sanctions, to limit Russian export capabilities to Europe in the energy sector,” it said.
Germany also said it would use all leverage to persuade Russia to extend by up to 10 years a gas transit agreement through Ukraine that is set to expire at the end of 2024, including by appointing a special envoy by Sept. 1 to support negotiations.
The Kremlin said that Merkel raised an extension in transit rights in a call on Wednesday with Putin and also that the two leaders were “satisfied” that Nord Stream 2 was near completion.
Ukraine and Poland made clear they still opposed the pipeline, saying that it threatens central Europe.
“Such a decision has created additional political, military and energy threats for Ukraine and Central Europe on the whole,” said a joint statement by Ukrainian Minister of Foreign Affairs Dmytro Kuleba and Polish Minister of Foreign Affairs Zbigniew Rau.
Germany also agreed to help Ukraine reduce reliance on Russian energy including by setting up a fund of at least US$1 billion. Addressing another key priority of Merkel and Biden, the fund would support renewable energy and reductions in carbon emissions blamed for climate change.
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