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40 I Central Europe bne October 2018
EPP, he said it has become clear that the EPP is seriously divided on the issue of migration. “We’re fighting to make our position the majority,” he said, adding that Fidesz wanted to steer the EPP back onto the Christian democratic path he said would preserve Europe’s identity.
Opposition parties hailed the EP's decision as a win for democracy that rejected the Hungarian government's illiberal policies. The message to government is clear: undermining and violating basic rights and values cannot go unpunished in Europe, Socialist MEP Istvan Ujhelyi said.
Losing voting rights in the European Council would ultimately hurt Hungary, rather than the government, but if the Article 7 procedure is launched it would be “Viktor Orbán’s responsibility alone”, Green opposition party LMP said.
and a pipeline from gas-rich Norway that Nord Stream will undermine.
Ukraine opposes Nord Stream 2 as the extra capacity means Russia can effec- tively cut the Ukrainian transit route through the Soviet-era Druzhba (Friend- ship) pipeline completely and Kyiv will lose some $3bn a year of income as a result – something the cash-strapped government can ill afford.
Russian President Vladimir Putin said openly at Gazprom’s tenth anniver- sary party that Gazprom was a “tool of foreign policy,” although its role has diminished since then as gas prices fall and Europe diversifies away from Rus- sian gas. Aware of the politics, German Chancellor Angela Merkel insisted that despite Germany’s support for the new pipeline, cutting Ukraine off completely was not an option and Putin promised her that some gas would continue to go through the Druzhba pipeline.
But Ukraine remains an unreliable transit route, which is part of the reason Germany supports Nord Stream 2. Russia has cut Ukraine off several times, but always because Kyiv failed to pay
its energy bill. In 2006 Russia shut off gas supplies to Ukraine, and hence the rest of Europe because, “It was a force majeure situation. There was a contract and they didn't fulfil it. It's perfectly normal that if a customer doesn't pay for their goods then supply cuts them off,” Russia’s then first deputy prime minister Igor Shuvalov told bne IntelliNews in
an interview at the time. While Berlin wants to see Ukraine supported by its Russian gas transit fees for political reasons, it is just as interested in not being cut off from Russian gas again when Moscow and Kyiv are rowing; Russia supplies about 60% of Germany’s
Busting Nord Stream 2 myths
Ben Aris in Berlin
The proposed expansion of the capacity of the Nord Stream
gas pipeline in Europe’s north, running from Russia’s Yamal gas fields to the German coast, has split Europe down the middle. Its detractors claim it will make Europe more dependent on Russian gas and give the Kremlin a big- ger club with which to bully the rest of Europe. Its supporters say it will diver- sify routes into Europe, improve energy security and most importantly provide the EU with cheaper gas.
Pipelines are always very political, and the politics surrounding Nord Stream 2 are especially fraught. One of its most vocal critics is the US that is threaten- ing to impose sanctions to scupper the project. However, the US has an obvious ulterior motive: it is keen to sell more liquid natural gas (LNG) to Europe, after it became a net producer of gas and has invested billions into LNG ports.
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From a simple economics point of view piped gas still trumps LNG as it remains between 15% and 50% cheaper, accord- ing to various estimates (which are also the subject of vigorous debate).
And as the pipes are immovable, piped gas is more secure than LNG, as while Russia can turn the gas off, it shoots itself in the foot if it does so as it has to forego the revenue if it delivers no gas. Governments don't go to the enormous expense of building gas pipelines they don't intend to use.
But putting gas on ships will radically change the nature of the business, as gas will become a commodity traded like oil, and ships, unlike pipelines, can be redirected to whichever market is paying the most for gas at the moment.
Poland opposes Nord Stream 2 as it has its own aspirations for an LNG terminal