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In a speech to the Munich Security Conference in February, U.S. President Joe Biden promised to “reengage with Europe,” to recommit to the transatlantic alliance, and to halt his predecessor’s plan to withdraw U.S. troops based in Germany. But there was one notable omission from Biden’s speech, a contentious project that has strained relations between the United States and Germany since its announcement in 2015: the gas pipeline Nord Stream 2.
Designed to bring up to 55 billion cubic meters of natural gas from Russia to Germany every year, the pipeline is now around 92 percent complete. Berlin sees it as a commercially beneficial project that will enhance the European energy market, but many in Washington and in other European capitals take a dimmer view. They see the pipeline as part of Russian President Vladimir Putin’s drive to hook Europe on Russian gas and thereby gain leverage over it.
Nord Stream 2 now threatens to burden the transatlantic honeymoon before Europe and the United States can restore their mutual trust. Even worse, the pipeline has become a millstone around Germany’s neck, weakening its foreign policy credibility and burdening its relationship with its Eastern neighbors, with other EU member states, and with the United States. The German government must therefore adopt a more proactive diplomatic approach. It should use the pipeline as a bargaining chip to extract concessions from Russia—such as a promise to halt foreign hacking campaigns or to release opposition leader Alexei Navalny.
The German government has defended Nord Stream 2 on the grounds that Russia will remain a major energy provider to Europe regardless of whether the project goes forward (Russia currently accounts for nearly 40 percent of EU gas imports) and that the United States itself imports billions of barrels of Russian oil. Moreover, even though Russian gas imports to Europe have grown in recent years, the continent has actually become less dependent on Russian energy as a result of reforms that liberalized, diversified, and integrated its energy market. These arguments are not without merit, but they have done little to assuage international fears that Nord Stream 2 will strengthen Moscow’s hand vis-à-vis Europe.
The Biden administration has made no secret of its opposition to the project. On March 18, Secretary of State Antony Blinken called the pipeline a “bad deal” and warned “that any entity involved in the Nord Stream 2 pipeline risks U.S. sanctions and should immediately abandon work on the pipeline”—a warning he reiterated in a meeting with his German counterpart at the NATO ministerial meeting the following week. The Biden administration has yet to expand U.S. sanctions on companies involved in the project, sensitive to widespread criticism of U.S. extraterritorial sanctions in the EU. But a bipartisan coalition in Congress could go ahead and expand sanctions anyway. A new State Department report on Nord Stream 2 is due to Congress in May, and momentum is building for congressional action.
Nord Stream 2 now threatens to burden the transatlantic honeymoon.
If there is a window of opportunity to de-escalate the Nord Stream 2 dispute and ensure the pipeline’s successful completion, it appears to be closing fast. In addition to international opposition, the project faces headwinds in Germany. The country’s next coalition government, likely to emerge after elections slated for September, will probably reduce the German commitment to Nord Stream 2, because current polls suggest that any future coalition is likely to include the green party Bündnis 90/Die Grünen, the liberal Free Democratic Party, or both. While the liberals argue for a moratorium on the construction of the pipeline, the Greens demand the outright stop of Nord Stream 2 on both ecological and political grounds.
To prevent the pipeline from becoming a major domestic and international stumbling block for the next coalition government, Berlin should develop a proactive diplomatic approach: rather than halting construction, Berlin should use Nord Stream 2 as a political bargaining chip with Moscow, making the pipeline’s eventual use conditional on Russian concessions. By coordinating such conditionalities closely with EU partners and transatlantic allies, the German government can pass the buck to where it belongs: Russia.
Berlin could begin by telling Gazprom, the pipeline’s main owner and operator, that domestic and international opposition to Nord Stream 2 has increased so dramatically that the project is no longer politically tenable. Its message to Gazprom should be clear: Russia must help Germany to create the political conditions under which Berlin can afford to give the green light for the gas to flow. Berlin could link completion of the pipeline to improvement in its bilateral relationship with Moscow and the resolution of contentious issues for Germany and its allies. The latter could possibly include, among other issues, halting hacking, disinformation, and assassination campaigns on foreign soil; accepting decisions by the European Court of Human Rights; releasing Navalny; and resolving the conflicts in Georgia and eastern Ukraine. Berlin might also condition the opening of the pipeline on Russia’s willingness later this year to hold free and fair elections, as determined by the Organization for Security and Cooperation in Europe.
Regardless of the exact conditions, making the operation of the gas pipeline dependent on Russia’s behavior would send a strong signal that Western democratic nations are taking a joint, robust stance against Moscow. Russia might well threaten to retaliate should Germany shut the pipeline down, but Europe’s negotiating position is significantly stronger today than it was even a few years ago. Reforms have deepened the integrity of the European gas market, and the global gas market has shifted to a “buyers’ market.” Moreover, Europe’s transition to green energy is gaining in speed, reducing its need for natural gas as “bridge fuel” and undercutting the economic and ecological rationale of projects such as Nord Stream 2.
To prevent Moscow from reneging on its commitments after the pipeline has become operational, Germany could build into any agreement an “emergency break” mechanism that would enable it (in coordination with the European Commission) to halt the flow of gas if necessary. At the same time, Berlin could propose a comprehensive plan to further strengthen the European gas market by improving its infrastructure and connectivity, particularly in central and eastern European countries, including Ukraine, while at the same time accelerating the transition to renewables by providing resources for research, development, and production of green energy technologies such as hydrogen.
Such a plan could be aligned with a recent proposal by the European Commission to build a “comprehensive transatlantic green agenda,” which would help place the European energy market on even firmer, more sustainable footing. In this way, Western democratic nations could further reduce their need to import fossil fuels from Russia and help countries such as Ukraine to do the same, thereby bolstering their political independence from Russia.
Regardless of the specific approach Germany chooses to resolve the Nord Stream 2 conundrum, it should coordinate closely with the European Commission and with its European and transatlantic partners—not just to keep the transatlantic honeymoon alive and to deepen transatlantic relations but also to strengthen the credibility of Berlin’s foreign policy.
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