Through Arne Delfs to 12/13/2021

(Bloomberg) – German Chancellor Olaf Scholz, under pressure from the United States to stop the Nord Stream 2 gas pipeline project due to Russian aggression against Ukraine, could quietly delegate the task to the country’s bureaucracy.

Before gas can flow through the pipeline at the bottom of the Baltic Sea, the German regulator and the European Commission, two institutions little known for their speed, must give the green light. Certification from the Bundesnetzagentur, or Federal Network Agency, must go through EU scrutiny before Germany’s final approval – a round trip that could take six to eight months.

The approval deadline came to a halt in mid-November, however, when the network agency froze the process to allow pipeline operator Nord Stream 2 AG, owned by Russian Gazprom PJSC, to set up a company. German to comply with local and European regulations. The move has skyrocketed European natural gas prices, an indication of how much Europe is betting on the potential for greater Russian supply. Nord Stream 2 is expected to double the capacity of the existing submarine route between Russian gas fields and Europe.

The process, which began in September, can only resume once Gazprom has brought its Nord Stream 2 operations into compliance. The German agency has so far no indication of when the necessary documents will arrive, a spokesperson said.

Scholz, a lawyer and 40-year veteran of German politics, knows how slowly the cogs of the country’s bureaucracy can turn. For Nord Stream 2, this can work to its advantage: the longer the certification, the less pressure it will feel to intervene on the political side.

US intelligence calculates that Russia could invade Ukraine with as many as 175,000 troops by early 2022, possibly late January – or several months before the Bundesnetzagentur concludes its deliberations.

This gave Scholz, during his first week at the office, a bit of a break. And like Angela Merkel, whose tactics he studied for years, Scholz is known for his ability to stand under pressure.

A German government official has denied US claims that Berlin has signaled to Washington that it will shut down Nord Stream 2 if Russian President Vladimir Putin invades Ukraine. Such assurance is not needed at this point, the official said, on condition of anonymity because the discussions are confidential: As long as the fate of the pipeline lies with regulators, the Scholz government has no mechanism to intervene.

This is not the first time that the United States has tried to pressure Germany over Nord Stream 2. But since the conflict between Washington and Berlin was resolved in July, there is a feeling that the Biden administration could look for another route, like the current crisis in Ukraine – to kill the project once and for all, the official said.

President Joe Biden faces bipartisan criticism for lifting sanctions on the pipeline’s parent company earlier this year. Lawmakers continue to call on Biden to sanction the pipeline, especially given the build-up of Russian troops.

Biden and Scholz spoke on Friday. US Treasury Secretary Janet Yellen also spoke with Germany’s new Finance Minister Christian Lindner about ways the United States could “impose severe costs on the Russian economy” if tensions between l ‘Ukraine and Russia were getting worse.

As transatlantic relations have thawed from the Trump era, pressure points remain, fueling the opinion in Berlin that Germany must first and foremost look after its own interests.

Here too, Scholz follows in the footsteps of its predecessor. As Vice Chancellor, he witnessed Merkel’s long struggle with the United States over Nord Stream 2.

There is no indication yet that Scholz will break with Merkel’s position. In fact, while some members of Merkel’s Christian Democratic Party had qualms about the pipeline, Scholz’s Social Democrats support it almost unequivocally.

A wild card, however, is the Green Party, the second partner in Scholz’s three-way coalition. In the past, Greens co-leader Annalena Baerbock has called for the end of Nord Stream 2 – but since becoming Germany’s first female foreign minister, she has been mostly silent on the issue. topic.

Polls have shown that most Germans approve of the pipeline, but Green supporters are the least enthusiastic.

The other green co-leader, Robert Habeck, recently suggested that the situation in Ukraine should be part of certification considerations – something officials at the Economy Ministry he now heads reject.

Adding even more drama, Scholz has a long history with the country’s largest Nord Stream 2 funder, Gerhard Schroeder of Scholz’s own SPD – the pre-Merkel-era German Chancellor.

Today, Schroeder is chairman of Russian state oil company Rosneft and Nord Stream AG, and a personal friend of Putin – but still takes a deep interest in his former party ally.

From the Bundestag’s VIP gallery, he watched Scholz take the oath on December 8. The 77-year-old later gave television interviews where he defended Nord Stream 2 and praised Scholz for his “patience and determination”.