The United States and Germany reach an agreement on the controversial Russian gas pipeline business and economic news


The Deputy Secretary of State for Political Affairs Victoria Nuland told Congress that if Moscow uses the pipeline as a political weapon, Washington and Berlin have pledged to impose sanctions on Russian and German companies.

A senior US official said on Wednesday that the United States and Germany have reached an agreement that will allow the completion of a disputed Russian gas pipeline to Europe without further US sanctions.

Victoria Newland, Deputy Secretary of State for Political Affairs, told Congress that the two governments will soon announce the details of the agreement, aimed at addressing concerns about the impact of the North Stream 2 project in the United States and Eastern and Central Europe.

However, the Congress and the Ukrainian and Polish parties strongly oppose the pipeline, and they worry that Nord Stream 2 will undermine Europe’s energy security. Like the previous Trump administration, the Biden administration also opposes this pipeline, but insists that sanctions will not stop it.

Newland, the third-ranked US diplomat, told the Senate Foreign Relations Committee that the United States and Germany will issue a joint statement on the pipeline later on Wednesday. She said that if Moscow uses the pipeline as a political weapon, Washington and Berlin have pledged to impose sanctions on Russian and German companies.

Newland did not elaborate, although congressional aides who listened to the outline of the agreement said on Tuesday that it would allow completion of the North Stream 2 pipeline, and neither Germany nor Russia will face new US sanctions. They said that in return, the United States and Germany will make certain concessions to Ukraine and Poland.

Newland categorically denied reports that Ukraine has been warned against publicly complaining about the agreement, and pointed out that State Department Counselor Derek Cholet was visiting Kiev and Warsaw this week to inform them of the agreement. Also on Wednesday, the White House announced that President Joe Biden would welcome Ukrainian President Volodmir Zelensky to the White House on August 31.

“In the face of Russia’s continued aggression against Donbass and Crimea, our close cooperation on energy security, and our support for President Zelensky’s efforts to fight corruption and implement reforms, this visit will demonstrate that the United States Unswervingly support Ukraine’s sovereignty and territorial integrity. “The agenda is based on our common democratic values,” the White House said in a statement.

The Beixi 2 project has brought a major foreign policy dilemma to the Biden administration. U.S. officials on both sides have long worried that this will give Russia too much power in European gas supply and may cut off the supply of gas to Russia’s rivals Ukraine and Poland. But the pipeline is nearing completion, and the United States is determined to rebuild relations with Germany that were damaged during the administration of former U.S. President Donald Trump.

Biden’s attitude towards Ukraine is also a sensitive political topic. Trump tried to pressure Zelensky to dig out the taint between Biden and his son, leading to Trump’s first impeachment. He was later acquitted by the Senate.

For some time, Beixi 2 has been a topic of intense debate between American and German officials, and it was a major agenda item during Biden’s meeting with German Chancellor Angela Merkel last week. Merkel supports this pipeline, and Biden said that punishing Germany for such support would have a counterproductive effect on the broader interests of the United States.

But like the previous Trump administration, the Biden administration views the Beixi 2 project as a threat to European energy security and imposes sanctions on some people involved in the construction of the project.

Newland said that the United States continues to oppose the pipeline, but that Biden has given up sanctions on the German company that built the pipeline and its executives because the punishment would backfire.

She and others defended the immunities, saying they could be revoked at any time, and this threat actually gave the United States more bargaining chips. This argument was ridiculed by opponents of the pipeline.

Eastern and Central European countries such as Poland and Ukraine that have bypassed the pipeline are worried that Russia will use natural gas supply as a political weapon. Legislators and some government members on both sides of the Congress aisle expressed sympathy for this position.

According to the expected terms of the US-German agreement, Ukraine will receive US$50 million in green energy technology credits, a guarantee to repay the natural gas transportation costs lost due to pipeline bypass until 2024, and commitments from Germany and Ukraine. Congressional aides said that if Russia uses natural gas as a political weapon, the United States will reconsider sanctions.

To pay tribute to Poland, Germany will also agree to sign the so-called “Three Seas Initiative”, a plan promoted by the United States and the European Union to promote investment, infrastructure development and energy security in the Baltic countries. According to an assistant, Black Sea and Adriatic Sea.

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