Nord Stream 2: Russia's gas pipeline plans threaten European unity - Financial Times

14:42 Oct. 21, 2016

Russia's gas pipeline plans threaten European unity - Financial Times

A general view of central facility where the Nord Stream Baltic Sea gas pipeline reaches western Europe prior to the pipeline's official inauguration on November 8, 2011 in Lubmin, Germany (Getty Images)

Gazprom's Nord Stream 2 is a test of EU credibility, which Poland is determined to defend

In August, subsidiaries of several western companies — Eon, Engie, OMV, Shell and Wintershall — decided not to participate in Gazprom's Nord Stream 2. The consortium, led by the Russian state-owned gas monopoly, was established to design, finance, build and operate two additional strings of the undersea gas pipeline between Russia and Germany.

The companies also withdrew their application for merger approval, submitted to the Polish competition protection authority in December. In the view of the Polish government, such a step showed that they had no counter-arguments to the regulator's concerns about the likely effect of the project on competition in the Polish and EU gas markets.

Together with eight other EU member states (the Czech Republic, Estonia, Croatia, Hungary, Lithuania, Latvia, Romania and Slovakia), and with the tacit support of a couple of others, Poland has opposed Nord Stream 2 since it was first announced by Gazprom in 2015. It undermines European solidarity and the Energy Union, the EU's flagship project.

Read also Poland objects to Nord Stream-2 joint venture

The economic arguments for Nord Stream 2 were always questionable, especially considering overcapacity on existing supply transit routes from Russia to the EU. And given Europe's considerable dependence on Russian gas and the damage the project would cause to the Ukrainian economy (which is subsidised by the EU), the political motivations behind it seemed obvious.

With the withdrawal of the western companies, the case against Nord Stream 2 looks even more powerful. A project that previously appeared merely controversial now looks like a Trojan horse capable of destabilising the economy and poisoning political relations inside the EU.

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