Germany 'offered $1bn if US dropped sanctions against controversial pipeline'

FILE - In this Jan. 14, 2021 file photo, Tugboats get into position on the Russian pipe-laying vessel "Fortuna" in the port of Wismar, Germany, Thursday, Jan 14, 2021. The special vessel is being used for construction work on the German-Russian Nord Stream 2 gas pipeline in the Baltic Sea. The company building a disputed Russian-German subsea pipeline says work on the gas pipeline has resumed, the German news agency dpa reports. Construction on the Nord Stream 2 pipeline was resumed late Saturday, dpa reported Sunday. ( Jens Buettner/dpa via AP, File) -  Jens Buettner/DPA

A new political row has broken out over a controversial gas pipeline between Russia and Germany after Angela Merkel’s government was accused of offering to spend $1bn (£720m) on American gas if the US called off planned sanctions against the project.

The Nord Stream 2 pipeline will allow Russian gas to be pumped directly to Germany, but the US has threatened to impose sanctions on any company involved with the project, arguing it will make Europe too dependent on Russia for its energy needs.

Lobbying group Environmental Action Germany (DUH) this week published a leaked letter from Olaf Scholz, the German finance minister, to Steve Mnuchin, the then US treasury secretary, dated last August.

In it, Mr Scholz offered to invest $1bn on new infrastructure to import American liquefied natural gas (LNG) at German ports if the US dropped the planned sanctions.

A branded marker post alongside pipework at the Gazprom PJSC Slavyanskaya compressor station, the starting point of the Nord Stream 2 gas pipeline, in Ust-Luga, Russia, on Thursday, Jan. 28, 2021. Nord Stream 2 is a 1,230-kilometer (764-mile) gas pipeline that will double the capacity of the existing undersea route from Russian fields to Europe -- the original Nord Stream -- which opened in 2011. Photographer: Andrey Rudakov/Bloomberg - Andrey Rudakov/Bloomberg

Nord Stream 2 is also opposed by many of Germany’s European neighbours and Mrs Merkel has come under pressure to cancel the project, especially in the wake of the poisoning and arrest of Russian opposition figure Alexei Navalny.

But many in German conservative circles remain convinced US opposition to the pipeline has as much to do with Washington’s desire to sell its own LNG to Germany as any political concerns.

DUH described the letter as a “scandal” and “dirty deal”, accusing Mr Scholz of encouraging the import of LNG obtained by fracking.

The new row comes as the German president denied allegations he had tried to justify the pipeline on the grounds Germany owed Russia a debt of guilt over the Second World War. The Ukrainian ambassador to Germany accused Frank-Walter Steinmeier of “questionable historical arguments” and ignoring Ukraine’s millions of Second World War dead in an interview this week.

Mr Steinmeier in fact argued that it was difficult for Germany to pressure Russia over wrongdoing because of its own past. “More than 20m people in the former Soviet Union fell victim to the war. This does not justify any wrongdoing in Russian politics today, but we must not lose sight of the bigger picture,” he said.

Ukraine also opposes the pipeline, which will allow Russia to bypass existing pipelines which cross its territory. A spokesman for Mr Steinmeier dismissed the Ukrainian objections. “The text of the interview speaks for itself,” he said.