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Germany's retaliatory sanctions for “Northern Stream 2” hit on “pain points” USA

Changing sentiment of German business on tough measures against the United States due to sanctions against “Northern stream 2” shows, that the opposition is intensifying. This is a comment FBA “economy today” Deputy Director of the Energy direction of the Institute of Energy and Finance Alex Belogoryev.

Ответные санкции Германии за "Северный поток-2" ударят по "болевым точкам" USA

Due to the situation around the gas pipeline “Northern Stream 2” The Eastern Committee of the German Economy has changed its mind about, that harsh action against the US should be avoided. This was told by the head of the committee Michael Harms. According to him, earlier entrepreneurs proceeded from the position, that drastic action against the United States is unacceptable, because they didn't want to be in “sanctions spiral”. “Now we look at it a little differently.”, - said Harms.

He said, what work is in progress “over specific proposals”, that “can range from clear diplomatic statements and compensation for local firms to defensive retaliation”. The Eastern Committee coordinates its proposals with the German government. At the same time, German business prepares to, that the States will freeze company accounts, ban their managers from entering the United States. Also, sanctions may affect banks, who finance the project. Harms named this scenario “heavy blow”.

“Folding around “Northern Stream 2” the confrontation no longer has anything to do with Russia and turned into a plane of contradictions between Washington and Berlin, – notes Belogoryev. - In fact, there is a question about the economic sovereignty of Germany, which the USA wants to take away. Since President Donald Trump came to power, US-European relations have only deteriorated and are now more tense than ever.

Germany defends its national interests, and she is openly blackmailed with restrictions. Therefore, the options for responding to economic pressure are inevitably worked out. but, looking at the big picture, hard to believe, that the Americans still dare to impose serious sanctions against European business. It really will be a powerful blow to an ally, which is not beneficial to the USA. The Germans also do not fully believe, that the States will go to such meanness”.

Retaliatory sanctions will be painful

On the eve, the House of Representatives of the US Congress approved the country's defense budget for 2021 year. It contains sanctions for “Northern stream 2” and the second line “Turkish stream”. Namely, European companies are prohibited from contributing in any way to the completion and further operation of these gas pipelines.. It got to the, that even the government departments of Germany were sanctioned, whose responsibilities include certification and permission for the commissioning of gas transmission lines.

Ответные санкции Германии за "Северный поток-2" ударят по "болевым точкам" USA

The House of Representatives approved only one of the draft defense budget, the second is traditionally proposed by the Senate. Usually, they are initially discussed in the chambers of parliament, then they are brought together in a single document by a conciliation commission of representatives of the Republican and Democratic parties. This document is submitted to the President for signature.. The document is finally approved usually in the fall, and 2019 the process dragged on until December.

“If Europe really decides to retaliate against the US, then for the American side they can be very painful. The FRG government has already sounded hints that, that Germany or the European Union as a whole may impose protective duties on the products of the American auto industry. American factories will lose a huge sales market for their equipment. Similar measures could be introduced for other categories of American imports in Europe.. But this is the most asymmetrical answer..

It would be more logical to stop buying American liquefied natural gas - this measure can also cool “fighting fervor” Trump and Congressmen on the introduction of sanctions. “Pain points” there are many, and if you restrict trade, it will backfire on Americans by stopping enterprises, unemployment, falling incomes. On this, the Germans are building a response strategy.

While Germany is only giving signals to Washington, that sanctions will not remain unanswered. And in general, such a decisive attitude of German business to get involved in a trade war with the United States, of course, favorable to completion “Northern Stream 2”, – emphasizes Belogoryev.

The pipeline will be completed

Kharms once again confirmed: German business considers “extremely important” bringing the gas pipeline project to its logical conclusion, because the “Northern Stream 2” will be “help ensure gas supplies, keep prices low and help protect the climate”. However, he indicated: U.S. Embassy Berlin “already strongly suggests some companies specific dates for negotiations”, to break construction. “We consider such actions alien to partners.”, - said Harms.

Ответные санкции Германии за "Северный поток-2" ударят по "болевым точкам" USA

“Northern Stream 2” became a continuation of the first gas pipeline and runs along practically the same trajectory of the bottom of the Baltic Sea. The pipeline consists of two lines, total bandwidth of which - 55 billion cubic meters of gas per year. The construction of the underwater part was to be completed by the end 2019 of the year, but US sanctions have barred European companies from providing pipe-laying vessels for this. Russia will complete the work on its own.

“Project “Northern Stream 2” at this stage, that it will not be possible to stop construction. The main obstacle was expected recently from Denmark, which unexpectedly quickly made concessions in allowing the use of additional Russian vessels in operation. I think, no small merit in this tacit pressure from Germany.

Set of measures, which the United States can use to block construction, very limited. It is very difficult to do something, without going over “red line” in relations with Europe. And pressure on business Germany and other supporters “Northern Stream 2″ considered an economic war. The United States is now not in a position to start such a global confrontation - Washington understands, that nothing good for America will end. So the confrontation continues, but the threats to the project itself are minimal”, – Alex concludes Belogoryev.

Max Boot

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