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Why Did France Just Save Nord Stream 2?

David Keating, Forbes

In Berlin and Moscow, they will be breathing a sigh of relief today.

What a difference a day makes.

Yesterday, things were looking bleak for Russia’s Nord Stream 2 gas pipeline project. After months of insisting it didn’t want to get involved in the pipeline dispute, a French foreign ministry spokeswoman suddenly announced the country will support a European Commission proposal to make construction more difficult.

Then, just as suddenly, France changed its mind today at a meeting of energy ministers in Brussels – saying it had reached a “compromise” with Germany.

The proposed pipeline, which would bring gas from Russia to Germany under the Baltic Sea, is being fiercely opposed by an unlikely coalition of environmentalists and right-wing governments in the United States and Eastern Europe. Their view, just about the only thing they agree on, is that the new pipeline will lock Europe into long-term dependence on Russian gas. This is problematic both for efforts to fight climate change and for European energy security.

German Chancellor Angela Merkel is desperate to get the pipeline built because she needs to replace the nuclear and coal power she has committed to phase out in the coming years. But at a NATO summit in Brussels last July, US President Donald Trump fiercely criticised Merkel’s decision to approve the pipeline, saying it will make Germany “totally dependent” on Russia. The Trump administration would prefer Germany import liquified natural gas from America instead.

Stops and starts

After plenty of pressure from Washington, a critical mass of EU countries was able to block the EU’s mandate to approve the pipeline. In response, Germany and Russia said they didn’t need EU approval for the pipeline – only national approval from the four EU countries it’s passing through (Finland, Sweden, Denmark and Germany).

Acknowledging that the rules were unclear, the European Commission put forward a proposal that would indisputably make such pipelines coming to and from non-EU countries fall under EU jurisdiction for approval. Germany has been lobbying countries not to accept this proposal, because it could allow Brussels to kill the pipeline project, on which construction has already begun.

France had stayed out of the fray. The announcement yesterday that it would support the commission’s proposal would have been a game changer, since it has the second-highest number of votes in the European Council after Germany.

But the German and French ministers reached a compromise this morning which would keep the aspects of the proposal which increase EU oversight of such projects, but would not give the EU the ability to kill them.

According to EU sources, while the compromise might make construction of the pipeline more complicated, it will not prevent its construction.

Nord Stream 2 isn’t completely out of the woods yet. This position adopted by ministers this morning must now be signed off by the European Parliament. Those negotiations will take place over the coming months. But even if the parliament blocks this compromise, it would just result in the proposal not being adopted – keeping Nord Stream safe.

There has been speculation that France never intended to support the commission’s proposal, but was using Nord Stream as a bargaining chip in an unrelated dispute with Germany. French President Emmanuel Macron wants Merkel to accept his proposals for reforming the European Union, but Merkel has been resistant to his ideas for a common Eurozone budget and debt system.

In the coming weeks, the trade-off for the French compromise may emerge, with Germany announcing it will accept some of Macron’s proposals. Given that France hadn’t expressed much interest in the Nord Stream issue before this week, this seems to be the most likely explanation for the about-face.

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