European Union officials are worried about a move to toughen United States sanctions against Russia, saying they may cause upheaval in Europe’s energy market.

But as usual, the 28-nation bloc is divided, with central European countries more willing to limit the bloc’s dependence on Russian oil and gas.
The new round of sanctions has been driven by the United States Congress, which is intent on punishing Russia for its meddling in last year’s presidential election. The House overwhelmingly approved sanctions legislation on Tuesday afternoon. Bipartisan support in Congress for the new sanctions is so strong that the White House has suggested that President Trump will sign the bill that emerges.

But the new sanctions have important implications for Europe because they target any company that contributes to the development, maintenance or modernization of Russia’s energy export pipelines.

That would almost surely affect a controversial pipeline project between Russia and Germany known as Nord Stream 2, which is owned by Gazprom but includes financial stakes from European companies. The project aims to carry Russian natural gas under the Baltic Sea, bypassing countries like Ukraine, Poland and the Baltic States.
The new pipeline, in rough parallel to the existing Nord Stream 1, is being built to carry another 55 billion cubic meters of natural gas per year, underscoring Europe’s continuing need for Russian energy.

“We are following the draft bill on Russia sanctions with some concern, notably because of its possible impact on the EU’s energy independence,” a European Commission spokesman, Margaritis Schinas, said on Monday.

Jean-Claude Juncker, the president of the European Commission, the bloc’s bureaucratic arm, has called for an urgent review of how the European Union should respond.

 EU concerns
Brussels should be prepared to act “within days” if the sanctions are adopted “without EU concerns being taken into account,” argued a position paper drafted by the European Commission dated July 19. The paper said the sanctions could affect the maintenance or upgrading of existing pipelines from Russia into Ukraine and elsewhere around the Caspian Sea.

It also raised concerns that unity could be broken between the United States and the European Union on how to deal with Russia over its annexation of Crimea and its sponsorship of warfare in eastern Ukraine.

The European Union — which does much more business with neighboring Russia than the United States does — imposed a series of sanctions on Russia, including on specific energy companies, beginning in 2014 over its actions in Ukraine.

The new sanctions would add punishments against Russian energy, financial, rail, shipping and metals and mining sectors.
The European Commission is seeking assurances from Washington that, if passed, the new measures would not be applied in a way that affects European Union interests or energy companies. It has suggested that European law could be used to prevent the application of “extraterritorial” measures by the United States, and it hinted at trade retaliation.

The tensions over the potential new sanctions on Russia come on top of other recent disputes on trade issues with the Trump administration.
Mr. Juncker earlier threatened rapid retaliation in response to Mr. Trump’s contemplated new punitive tariffs on steel imports, which would affect more than a dozen countries, including some in Europe. “We are prepared to take up arms if need be,” he said this month at the G-20 summit meeting in Hamburg.
“I don’t want to tell you in detail what we’re doing,” Mr. Juncker said then. “But what I would like to tell you is that within a few days — we won’t need two months for that — we could react with countermeasures.”
Russia has been greeting the prospect of a new round of American sanctions with a certain coolness, waiting to see what the White House will do and expecting reciprocal action by President Vladimir V. Putin. Russian analysts have focused more on the sparring between Congress and Mr. Trump over Russia policy than on any fallout at home.

Depending on the final version of the bill, the most immediate impact is expected in the oil and gas sector, including deals involving Russian-state-run companies outside its borders, and on investments from abroad.
“The sanctions bill leaves no space for compromises and cements America’s hostile policy toward Moscow for decades ahead,” Ivan Timofeev, program director of the Valdai discussion club, a Kremlin effort to court Russian experts abroad, wrote on the group’s website.
Russia often accuses the United States of using sanctions to further its own interests, and this time is no exception. Alexey Pushkov, a legislator and frequent commentator on international relations, wrote on Twitter: “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.”

Russians appeared to be giving little credence to the idea that American anger over Russian cyberattacks during the election might be playing a role.
Mr. Trump has opposed further sanctions on Russia. The push has come from a Congress that wants to tie the president’s hands on Russia and prevent him from lifting earlier sanctions imposed by President Barack Obama over Ukraine.
That earlier round of sanctions was carefully calibrated between the United States and its European allies to keep everyone on board and preserve a united response to Russia’s land grab in Ukraine. Energy, which divides even European partners, was a crucial part of that calculus.
Nord Stream 2 is important for Germany. But it has been fiercely criticized by central and eastern Europeans. Donald Tusk, the president of the European Council and a former Polish prime minister, is a vocal critic of the pipeline, urging strict regulation of a project he has said would strengthen Moscow.
(Source: The NYT)