A former German ambassador to the United States stated that Russia will lose tens of billions of dollars if it abandons the pipeline project to send natural gas to Germany-and Europe can use this threat to put pressure on Moscow.
Wolfgang Ischinger, the current chairman of the Munich Security Conference, said: “I think this channel will be an important bargaining chip for us if we handle it skillfully.”
Nord Stream 2 is a natural gas pipeline from Russia to Germany. If approved by regulatory agencies, it will send 55 billion cubic meters of natural gas to Europe every year. This is controversial because it bypasses countries that openly oppose it, such as Ukraine and Poland, and the project has fallen into a geopolitical debate.
At the same time, the United States and its European allies were shocked by the build-up of Russian troops on the Ukrainian border. Many experts worry that Moscow will invade Its neighbors.
Some European leaders suggested that This pipeline should be added to the list of potential sanctions against Russia.
Isinger told CNBC’s Hadley Gambling on Tuesday that Russia cannot hope that its traditional sources of income will be hit.
“If we have to close this pipeline project, Russia will definitely lose tens of billions of dollars or euros in the future,” he said. “This is not in Russia’s interest at all.”
43% of Europe’s total natural gas imports come from Russia, According to Eurostat. Isinger said that European restrictions on natural gas from Russia will be “painful” and there may be more energy shortages, but Moscow should expect that if military activities escalate, Europe will retaliate.
“This is a kind of leverage. I think Russia is definitely interested in continuing to provide natural gas and oil to Western European partners to obtain a source of income,” he said. “We need to be careful, but clever.”
The key to concern is the change in the political tone from Germany, the final destination of the Beixi 2 pipeline. Former Prime Minister Angela Merkel stepped down in December after 16 years in power. The relationship with Russian President Vladimir Putin is better than many Western counterparts. She supports the pipeline and called the United States in early 2021. The sanctions against it are “not good”.
The new German leadership took a very different position. The country’s new foreign minister, Annalena Baerbock, has stated that Germany cannot approve the pipeline in its current form, and said in December that “as far as the current situation is concerned, this pipeline cannot be approved as it is.”
Maximilian Hess, a researcher at the Institute of Foreign Policy Research, said: “It is believed that Belbok’s foreign policy influence has changed drastically compared to the approach we took under Merkel’s leadership on this issue rather than implying. Passionate about changing Germany’s foreign policy formulation.” Baerbock also mentioned concerns about Ukraine and the EU’s energy laws. Hess said that these concerns “will attract critics of the pipeline in Washington and the eastern European Union”.
However, this position has not yet been finalized because it is not clear what other members of the German government stand on this matter. “Uncertainty still exists in the potential resistance of German industry and the unity of the alliance on this issue,” Hess added. “They avoid mentioning it directly in the alliance plan.”
— CNBC’s Silvia Amaro and Holly Ellyatt contributed to this report.