Germany aims for new deal as US continue to monitor Nord Stream 2

Germany is reportedly seeking a new deal with US President Joe Biden as the US looks to review its position on the Nord Stream 2 gas pipeline which is now nearing completion.

The pipeline has continued to sour tensions between the EU and the US owing to a feeling that, once completed, the project may make the EU too dependent on Russia - which the US sees as an unpredictable foreign power - for its energy needs.

Read more: France urges Germany to ditch Nord Stream 2 over Navalny arrest

The pipeline is around 95% complete, with less than 160 km (100 miles) remaining, and work resumed last month after more than a year in limbo.

In a briefing on Tuesday, US Press Secretary Jen Psaki said the US were willing to work with its allies on its use of sanctions, adding the US was "continuing to monitor activity to complete or to certify the pipeline."

She said: "If such activity takes place, we'll make a determination of the applicability of sanctions. Importantly, sanctions are only one among many important tools to ensure energy security. And we'll do this all in partnership with our allies and partners."

The Biden administration has opened talks with Berlin about the future of the pipeline, including potential sanctions on companies involved with the project.

Officials have said the US have a deadline to identify companies supposedly in breach of US laws which were passed with the aim of halting the pipeline's completion and imposing tariffs accordingly.

However, Germany may look to seek a different approach to the dispute.

German officials are currently brainstorming ideas to convince the Biden administration to drop their sanctions on the project.

According to ministers, one such approach is the concept of "snapbacks" - Germany having the power to cut off Nord Stream 2 should Russia put pressure on Ukraine, which is currently dependent on gas transit routes from Russia for a significant proportion of its economy.

Some politicians have argued that such measures could strengthen the EU's bargaining power, whereas others see it as a legal challenge that flies in the face of global trade rules.

The US favours automatic triggers, and there is also a need to involve Ukraine in the debate, as the country is likely to suffer economically should Nord Stream 2 be completed.

Another idea is for a moratorium on the pipeline's commission, the lifting of which would be conditional on Russia changing its "behaviour".

Read more: No further sanctions against Russia, say EU foreign ministers

Nils Schmid, foreign policy spokesperson for the German Social Democratic Party told the FT: “We should think about making the start-up of NS2 conditional on a change of behaviour on the part of Russia — say, the release of Alexei Navalny, or improvements on the ground in eastern Ukraine."

Psaki said in the briefing that Biden's position on Nord Stream 2 remains unchanged. While on the campaign trail, Biden continually referred to Nord Stream 2 as a "bad deal" for Europe.

However, there have been rumours that Biden wishes to take a cooler approach to the whole dispute.

On January 1, the US Senate voted against Trump's veto of the National Defence Authorisation Act (NDAA), which included new sanctions on Nord Stream 2.

These expanded the threat of action against companies caught working on the pipeline, including laying the pipeline and performing inspections or certifications.

Currently, the only confirmed company working on the pipeline is Fortuna, at the behest of its Russian owners.

However, the developers have been fitting the Akademik Cherskiy pipe-laying vessel with the necessary equipment to lay down the pipelines, which could significantly speed up completion.

A timeline for the completion is still unknown and Nord Stream 2 have refused to comment on the situation.

A Bundestag report conducted late last year found the US sanctions did not breach international law.

Read more: Nord Stream 2: Bundestag report finds US sanctions do not breach international law

The report indicated the US could rightfully act if it could prove Nord Stream 2 was a threat to its national security or economy.

It also suggested the EU seek diplomatic measures to quell the disagreement, which they appear to be adhering to of late.

It is currently uncertain how the discussions between the two parties will turn out, however, it does appear the US may be more willing to compromise under Biden.

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