Wilfried Furman: "Blocking Nord Stream 2 is not in the interests of a united Europe"

Last week the US Senate approved its version of the defense budget for fiscal 2021, which contains additional sanctions against Nord Stream 2. At the same time, the United States has stepped up pressure on European companies involved in the pipeline's construction.

 For the United States, as the most powerful geopolitical power, sanctions have long been a widely used tool to achieve their goals, German macroeconomics professor Wilfried Furman from Potsdam said in an interview with Vestnik Kavkaza, speaking about US sanctions against Germany.

“Military interventions are always associated with the loss of life and, consequently, with human capital, as well as with extremely high costs (including political). President Trump has recognized this and is gradually withdrawing American troops from abroad, even from Afghanistan after 20 years and more than $ 3.5 trillion in costs for the United States alone (not to mention the costs of the 40 countries that took part in the operation, 180 thousand killed Afghan citizens and 5 million refugees). The military operation, the so-called nation-building and the belief that it is possible to instill Western values, relying on money and extreme military superiority, failed. The country is more likely to become a so-called failed state. Trump also acknowledged that an economic war with the help of sanctions would cost the United States much less, it is possible even without allies, and could also lead the “target” country to defeat. "

According to Furman, the sanctions are becoming more specific and targeted: “The aim of sanctions is to cause as much damage or loss as possible to the country subjected to them. At the same time, the sanctions should be designed in such a way that the damage to the country subjecting the sanctions is as small as possible and affects only those sectors and people who do not support or elect the current president. Sanctions could even lead to economic benefits for the United States if they result in high costs in competitive third countries and access to new markets for the United States. ”

“The most fortunate case for the US is probably the case when the sanctions extend to Russia and at the same time to Germany, which is considered to be an“ accomplice ”of the continuing large deficit in the current US trade balance. The European Energy Security Protection Bill, which was introduced to the US Senate in July 2020, is likely to become law as it is supported by both Republicans and Democrats. Meanwhile, Germany's reputation in the US has plummeted, and even the number of Americans learning German is decreasing, says Furman. "It seems that this auspicious occasion is the US sanctions against Nord Stream 2, with which President Trump wants to" protect "Europe from Russia."

The expert named several possible consequences of the sanctions.

First. For Russia, this is a “sunken”, lost investment of 10 billion euros and long-term losses from non-exported gas, not to mention reputational losses.

Second. Germany will suffer losses in international competitiveness and therefore in exports, among others to the US, because Russian gas is much cheaper than any alternative.

Third. It is expected that after the Americans neutralize Nord Stream 2, the export of LNG to Germany from the United States will begin (thus reducing the overall US current account deficit). This will be a bailout for the US oil exploration and production industry, which is facing bankruptcy despite higher prices. Increased environmental pollution is to be expected due to methane emitted during production and higher safety risks during transportation.

Fourth. For other European countries, an increase in energy exports (especially for Norway) and relatively increasing competition within the EU with Germany, as well as (partly already nationalistic) “satisfaction” in relation to Russia (Poland, etc.).

“From a geopolitical point of view, it doesn't seem to matter to Western partners that the Nord Stream 2 pipeline is an economically necessary investment in the infrastructure that keeps Russia connected to the EU. This part of cross-border sustainable energy policy provides more security than any additional tank. In addition, the unfilled pipeline in the European direction is forcing Russia to cement, as an alternative, additional permanent low-cost energy supplies to China, which increases China's competitiveness vis-à-vis Europe and the United States. Blocking Nord Stream 2 does not meet the interests of a united Europe, but it may well be so for many prosperous nation states. "

Wilfried Furman noted that the EU, Poland and Ukraine, as well as Denmark and Norway, did not miss any opportunity to slow down and prevent the construction of the pipeline: “The planning of a Norwegian pipeline from the North Sea through Denmark to Poland is a new dimension. If there are supplies, then actively developing Poland (with the growth of the US presence, as well as with the involvement of interested German companies) will block the transit of Russian gas at the expense of the interests of Russia and Germany. The Norwegian Government Foundation is the largest in the world! "

According to the expert, the US sanctions against Germany are so serious that every company that in any way supports the construction of the pipeline, up to catering companies, is threatened with direct sanctions. "As a new measure, it is likely that authorities and officials such as mayors will be threatened with personal sanctions, which exposes these people to pressures that could render them disloyal to their employer and German law."

“These sanctions would significantly expand the potential to destabilize the democratic constitutional German state. The federal government should then proceed with the construction of the pipeline even under such conditions - and at the same time turn to international organizations / courts for clarification (possibly with a cost of a billion euros in dispute). Otherwise, Berlin loses its political face. At the same time, the EU must support the German federal government, even despite its position on the pipeline, ”the expert believes.

According to him, German Chancellor Angela Merkel and the ruling coalition can, of course, file protests and objections, but they have lost too much political capital in the United States and are unlikely to be able to prevent a pipeline decision and capital flight: "If the United States, whose internal dynamics is supported By attracting mobile, well-educated youth from all countries to the country, if the parents of this very youth will be threatened with personal sanctions, the question arises whether American democracy is inherently democratic or power-nationalist. Does it still respect human rights, the right of peoples to self-determination and the sovereignty of recognized states? "