Nord Stream 2 drives Poland into a corner
by Dawid Pych
A political fight of diplomatic moves over whether the Nord Stream 2 pipeline will allow Moscow to raise gas prices in Europe is only getting worse while Poland asks for WWII reparations and Germany demands Polish companies to pay its employees more.
Germans support the Nord Stream 2 because they don’t want to pay transit fee anymore while Poland opposes it, saying it will make Gazprom the monopolist in Europe. At the same time Germany backs France in plans of pushing Polish employers who are sending employees abroad to pay salaries adequate to local standards. Therefore, hundreds of thousands of workers delegated to Western Europe can lose their jobs. Poland fights back with historical arguments.
“We are talking here about huge sums, and also about the fact that Germany for many years refused to take responsibility for World War II,” said recently the leader of Polish ruling party Jarosław Kaczyński while calling Germany for WW2 reparations.
Earlier prominent German politicians accused him of being responsible for “a dangerous Putinisation of European politics” (Martin Shulz) and “risk to rule of law in Poland” (Angela Merkel).
Nord Stream 2 seems to be the main reason of that rhetoric. It will be the second pipeline between Vyborg in the Russian Federation to Greifswald in Germany. First was fully-opened in 2012 and has an annual capacity of 55 billion cubic metres. Nord Stream 2 will double it. As a result, Gazprom will not need Eastern Europe’s pipelines anymore to sell gas to Europe and that can be used politically.
“The emergence of Nord Stream 2 will undermine the security of countries like Ukraine, Poland and Slovakia. According to the latest declarations of Gazprom, gas supplies to Ukraine can be stopped in 2019,” wrote Sijbren de Jong from The Hague Centre for Strategic Studies.
2019 is the official deadline for the pipeline. Ukraine has already been in huge economic crisis as it’s GDP has fallen by 49% from 2013 to 2016. Around 2 million of Ukrainians are estimated to escape their country and move to Poland by the end of 2017.
Losing the role of transit country and being forced to buy more gas from the West will be another punch for Ukraine. They will be still able to get supplies from Poland or Slovakia, but these countries are also afraid of Nord Stream 2. What if Gazprom will cut deliveries there?
“It would concentrate 80 percent of Russian gas imports into a single route. According to politicians in Berlin, it is unlikely that Russia could use gas supplies for political purposes. The fact that there was no such situation in Germany does not mean that it will not appear in the future,” continued Mr. de Jong.
Official reason of the pipeline is that the gas production in Western Europe is falling and it needs to be substituted. But EUGAL, the German branch of Nord Stream 2, will be made on Oder river and go down to Czech Republic. So the direction of the gas will be East.
German Uniper and Wintershall will finance 20% of the project which is also controversial inside of the country. The agreement on Nord Stream was signed in 2005 by Gerhard Schröder who was chancellor then and it was few weeks before parliamentary elections. Mr. Schröder lost but afterwards received position on the supervisory board of Nord Stream AG - the consortium which will operate the pipeline. Even Martin Schulz, his friend from SPD party, said that he wouldn’t have done the same.
However, the most powerful person in EU, Angela Merkel, said that pipeline is no one’s business but Germany’s. She is supported by her government and officially sees criticism of Nord Stream 2 as an interference in free market.
Deputy Foreign Minister of Poland, Konrad Szymański, argued with that: “The economic arguments for Nord Stream 2 were always questionable, especially considering overcapacity on existing supply transit routes from Russia to the EU.”
But problem for Polish Government is its own reputation. After Law and Justice party (PiS) took power in 2015, it was criticized more than often by prominent EU politicians and institutions.
Last year the Venice Commission called new law on the Constitutional Tribunal of Poland illegal, but Polish Foreign Minister responded that he doesn’t want to discuss that. This year councils of judges from 16 EU countries (including those from Eastern Europe) signed the critic report on Polish Supreme Court bill, but Senate passed it anyway.
When few weeks ago the European Court of Justice ordered Poland to stop logging in Bialowieza Forest, a Unesco World Heritage site, nothing has changed.
And recently Polish Government started campaign to get WW II reparations from Germany. Although Poland was the biggest victim of the war (sixth of the population was killed and most of the land destroyed) and country has never received adequate compensation, it is well known that for Germany topic is not negotiable.
“We’ve been fooling ourselves into thinking Poland is a fully-formed Western society because we’ve limited our contacts to people who think like us,” said Joerg Forbrig, analyst at the German Marshall Fund of the United States. That type of thinking seems to be shared by large group of German executives at the moment.
In the upcoming months there will be voting on delegated workers in EU. About 500.000 of them are from Poland and countries like France or Belgium want them to earn Western standard salaries. Polish employers will not be able to pay so much. Therefore, a lot of Poles will lose their jobs. Germany hold all the cards but in current circumstances will probably support its Western neighbor rather than Eastern one.
Hopefully for Poland, the situation about Nord Stream 2 is a little bit different as some EU representatives are concerned about pipeline’s ecological consequences and influence on energy suppliers diversity.
“The Commission does not put into question the commercial interest of a few companies to build the Nord Stream 2 project, but seeks to ensure that the wider EU interest is reflected in the specific regulatory framework for the project,” said Anna-Kaisa Itkonen, European Commission spokesperson on climate action and energy.
However, Donald Trump and American Congress has hit Nord Stream 2 the most so far. It is because of signing of new US sanctions on Russia. According to European Policy Centre, bill will financially affect most of the companies involved in the project and raise Russian investment from 10 to 33%. Kremlin interference in 2016 elections is the sanctions official explanation but there are also some economic reasons as Mr. Trump would like to sell more American gas to countries like Poland.
Professor Władysław Mielczarski from Lodz University of Technology thinks that although these supplies can decrease Polish dependency on Gazprom, in long term perspective American prices will be much higher than Russian.