Europe Split on New Russia Sanctions

The U.S.’s European allies are split on how to respond to new American sanctions on Russia. Some of the sanctions the House passed on Tuesday are targeted against companies or individuals that cooperate with Russian energy companies. According to the bill, “The Government of the Russian Federation uses its strong position in the energy sector as leverage to manipulate the internal politics and foreign relations of the countries of Europe and Eurasia.”

Europe buys huge quantities of natural gas from Russia. France and Germany, which have big economies and populations and consume large amounts of gas, have objected to the sanctions that they say could raise their energy costs.

The French foreign ministry objected to the law on the grounds that it affected American companies outside the United States, which it says is outside the scope of American law. The ministry warned in a statement that “[t]o protect ourselves against the extraterritorial effects of US legislation, we will have to work on adjusting our French and European laws.”

The German foreign ministry echoed the French sentiments, adding that sanctions should not be used to further American industrial policy. Influential Russian politician Alexey Pushkov made a similar characterization of the sanctions on Twitter, tweeting, “The exceptional nation wants to block Russian gas supplies to Europe and to sell expensive shale gas from the U.S. to its European servants. That’s the entire ‘morality’ of Congress.”

Both French and German companies have financial stakes in the Nord Stream 2 pipeline project, which could double the volume of gas pumped from Russia directly to Germany. Former German chancellor Gerhard Schroeder is the chairman of the company that owns and operates the first Nord Stream pipeline, Nord Stream AG, which is majority owned by the Russian state monopoly Gazprom.

The Italian government has quieter than its northern neighbors, though it too will likely support countermeasures. The country’s largest energy company, Eni, plans to start drilling in the Black Sea soon. According to its website, “Approximately 30% of Eni’s natural gas is supplied by Russia. These supplies are out of the reach of current sanctions.” Whether or not it will be exposed to new sanctions depends on how the Treasury department chooses to interpret the law. Italy has opposed sanctions on Russia in the past, arguing that “punitive measures have failed to force a change of course by Moscow while hurting European business.”

This post originally appeared on Weekly Standard

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