Abandoning the nearly complete Nord Stream 2 gas pipeline from Russia to Germany could create a legal mess and nudge up energy costs for European households but Germany would cope with any disruption to supplies, economists say. German Foreign Minister Heiko Maas at the weekend questioned the project — thus far supported by Germany — following the suspected poisoning of Kremlin critic Alexei Navalny.
Chancellor Angela Merkel’s spokesman reinforced the shift in tone on Monday, saying she shared the view of Maas, who told newspaper Bild am Sonntag: “I certainly hope that the Russians will not force us to change our position on Nord Stream 2.” Their comments cast doubt over the future of a project that is more than 90% complete, scheduled to operate from early 2021 and which would double the capacity of the existing Nord Stream 1 pipeline from Russia to Germany, Europe’s largest economy.
Merkel and the EU face a trade-off between the economic benefits of the pipeline and the firm political message that abandoning it would send to Russia, analysts say. Germany could use the threat of an exit from the project to try to get more engagement from Russian President Vladimir Putin on issues such as Ukraine or Belarus, he said. But with 2,300 km of the 2,460 km twin-pipeline length completed, the commercial momentum behind the project may well carry it through.
A study undertaken in April by Cologne University’s energy economics institute (EWI) showed that consumers would benefit from a 5% gas price discount if Nord Stream 2 materialized. There is strong commercial resistance to axing the project. Oliver Hermes, chairman of the Ost-Ausschuss, which represents German business interests in Russia, said abandoning it would damage Germany’s commercial reputation. The legal costs of abandoning Nord Stream 2 could also prove a major headache. The five Western partners in the 9.5 billion euro project led by Russia’s Gazprom would suffer massive writedowns should it be axed.
Source: Reuters
Finnish site 
Global site