Once again, energy ties with Russia have become a source of controversy in the European Union. On July 25, representatives from member states gathered in Brussels to discuss their joint energy strategy at a meeting chaired by the Estonian government. Estonia currently holds the rotating presidency of the Council of the European Union and is interested in diversifying the union's energy sources and reducing its dependence on Russian natural gas.
One of the thorny dilemmas under discussion at the meeting was the future of the Nord Stream II pipeline project, which would transport additional natural gas from Russia to Germany through the Baltic Sea, bypassing Eastern Europe. The pipeline is controversial in Europe, and 13 EU members recently protested the project, arguing that it would increase European dependence on Russian natural gas. To make things more complex, the offshore section of the pipeline lies outside the jurisdiction of the union's set of energy sector rules, known as the Third Energy Package, thus putting the project in uncertain legal territory.
In June, the European Commission asked member states for authorization to negotiate the pipeline project on their behalf, and though the move is backed by countries such as Poland, Estonia and Denmark, it puts Germany in an awkward position. Despite Berlin being one of the main proponents of a hard line on Russia over the situation in Ukraine, it is also one of the main supporters of Nord Stream II. Defenders of the project argue that as long as the European energy market is well-integrated, Russia's dominance will be mitigated, because Moscow will be unable to single out individual nations as it has done in the past. And while the Nord Stream II project would transport gas to countries other than Germany, such as the Czech Republic and Slovakia, Berlin’s position as the European Union’s main political player means it must decide whether or not to use its influence to push ahead with the project. If it does, Germany risks alienating countries in Central and Eastern Europe and deepening east-west frictions within the union.
To further complicate matters, the July 25 meeting took place as the U.S. Congress prepared to approve additional sanctions against Russia, which would allow for the discretionary application of financial sanctions on any firm taking part in any Russian pipeline project. While the European Commission said on July 24 that it was ready to take the issue to the World Trade Organization, or even consider the introduction of countersanctions, the bloc remains divided on the issue.