Valdai Club

Thirty-seven years ago, on December 21, 1981, then US President Ronald Reagan, in a National Security Council meeting, asked his Secretary of State, Alexander Haig, whether these European “chicken littles” would remain chicken littles if the US moved forward and asked them to follow. The discussion was on Washington’s introduction of an embargo on the supply of equipment for building the Urengoy-Pomary-Uzhgorod gas pipeline from West Siberian gas deposits in the Soviet Union to Germany and France. The situation was provocative because several major European companies had concluded contracts for the supply of gas pumping equipment. In other words, they were discussing the imposition of direct sanctions against German, French and British industrial giants to discourage the construction of a new gas pipeline.

Now, almost 40 years later, we are seeing history repeat itself. By crudely interfering in European affairs the United States is trying to stop the construction of the Nord Stream 2 project. On December 12, the House of Representatives of US Congress unanimously adopted a resolution of opposition to the completion of the Nord Stream 2 natural gas pipeline project. The House described the project to distribute Russian gas to the European market as “a drastic step backwards for European energy security and US interests,” and called on European governments to reject it. The resolution urged US President Donald Trump to “use any available means to support European energy security through a policy of diversification to lessen reliance” on Russia. Finally, it supported the imposition of sanctions with respect to Nord Stream 2 under section 232 of the Countering America’s Adversaries Through Sanctions Act.”

In reality, this is basically another attempt to show those “chicken littles,” to use Reagan’s term, their place in Pax Americana. Probably, right at this moment, Trump is asking Mike Pompeo, in the same manner, if the Europeans will tolerate the introduction of sanctions against their major energy companies, pipe manufacturers, pipeline contractors, turbine suppliers, etc., in the US’s interest. The Europeans have generally tolerated verbal or megaphone interference, to use the current term, in their domestic affairs, at least in public, with straight faces. German government officials, against whom all American efforts to thwart the Baltic gas main are directed, continue to repeat that they will not give up on Nord Stream 2. This is a commercial project, and its implementation should clear up Ukraine’s role in gas transit.

Obviously, sanctions would put Germany, Austria, France and the Netherlands in a dilemma – should they submit or should they defend their interests, their companies and their energy security. Russia meets about 35 percent of Europe’s needs in natural gas. Distribution was only ever a problem in terms of transit. Russia’s share has grown substantially since Ukraine’s transit failure in 2009. In 2010, Russian gas supplies met merely 23 percent of EU’s needs. Many events have happened since then, up to the imposition of reciprocal sectoral sanctions. Russia-EU relations can hardly be called friendly, but there have never been any problems with Russian gas supplies. Also, neither the Kremlin nor Gazprom have ever exerted any pressure on the EU. To the contrary, at the end of last winter, when it was very cold in Europe, gas supplies in the underground gas storage facilities were depleted and China was buying up any LNG surplus, it was Russia that provided the EU with additional gas.

What was especially amusing in this context is that on the very next day after the US House of Representatives adopted its resolution, the European Parliament also made a statement against Nord Stream 2. It wasn’t a separate document but just an item in the resolution on implementing the EU-Ukraine Association Agreement. It sounded like the EU deputies’ statement was mimicking the US resolution, like maybe they could just call for the introduction of sanctions against their own businesses.

Although Alexander Haig warned Reagan against taking abrupt steps against their European allies, the US President still introduced an embargo on New Year’s eve, provoking one of the worst crises in the history of the Transatlantic alliance. The leaders of Germany, France and Britain refused to comply. The Americans tried to punish them by freezing their own supplies of components and by imposing fines for violating licensing agreements. These sanctions were short lived. It became clear that they would not work and would only sow discord between the US and Western Europe. The Soviet Union was building the gas pipeline at a record pace and put it into operation on schedule. Ironically, now the US is allegedly defending this gas pipeline in Ukraine against Nord Stream 2. Reagan had to lift the sanctions unilaterally in the autumn of 1982 because, as it turned out, the Europeans were not “chicken littles.”