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The first edition of EUobserver's Business in Europe magazine looks at business and industry in Europe.

Mueller believes the new

Mueller believes the new study cannot say No. “The third energy package [EU energy laws]… does not apply outside the internal market,” he said. Nord Stream 2 is “completely different” to South Stream, he said, because that project was planned to run from Bulgaria to Austria, but Nord Stream 2 would lie mostly in international waters and end in Germany. That would mean only “connecting pipelines within the [EU] internal market that will transport gas from Nord Stream 2 onwards across Europe will be subject to all EU energy legislation”. One senior EU source agreed. “Lawyers are warning that the EU study might produce a result that source said. sition. Nine EU states, mostly from central Europe, have said it would harm energy security and impoverish Ukraine. They said it would let Russia cut off supplies to its EU critics while protecting Germany network. MAKING GERMANY MORE SECURE “This project will make Germany more secure and it makes me laugh when I hear people try to contradict that,” said Jonathan Eyal, an expert at British think-tank Rusi. “Nord Stream 2 is a purely politica l and not a commercial project”, Mykola Tochytskyi, Slovakia, one of the nine Nord Stream 2 critics, will oversee EU energy policy when it takes up the EU presidency in July. Maros Sefcovic, the Slovak EU energy commissioner, is critical of the project. The US is also opposed, while Denmark, Finland, and Sweden - all of which are building closer US ties due to Russia's aggressive behaviour - will have to give permission for the pipeline to go through their territorial waters. Whatever EU sanctions say, US policy has a global reach and the US is serious about enforcing the “spirit” of the measures. Last year, the US introduced new sanctions to block a Shell-Gazprom deal on gas drilling. With the spotlight on Denmark, Finland, Germany and Sweden, Mueller said: “Authorisation of the construction of infrastructure projects … is clearly a competence of [EU] member states”. NO OPPOSITION IN BERLIN There is no political opposition in Germany. Nord The Danish foreign ministry, for one, told this website: “Danish authorities have not received a formal application with regard to the Nord Stream 2 project. If such an application is received, it will be assessed according to all relevant rules and Den- - EU and Russian leaders switched on Photo: Nord Stream AG 08 — BUSINESS IN EUROPE JUNE 2016

yachts take part in European races to Photo:Nord Stream AG coalition. But Merkel also defends it - in one incident at an EU summit in December she told Italian PM Matteo Renzi that Nord Stream 2 was none of his business. Despite this, Mueller and his colleagues are not taking chances. According to the European Commission register in four big PR companies - Brunswick, Edelman, Fleishman-Hillard and G-Plus. Mueller said Nord capital for some four days each month to talk to press and EU staff. Nord Stream 2 consortium have held 62 meetings with the two energy commissioners, Sefcovic and Canete, with commission president Jean-Claude Juncker, or with their cabinet staff. The lobbyists work alongside Russian embassies. There are 138 accredited Russian diplomats in the EU capital and 110 in Berlin. There are 92 in Copenhagen, 53 in Helsinki and 35 in Stockholm. “Russian embassies are [kept] informed about the project development,” Mueller said. NOT ENOUGH DEMAND Nord Stream 2 critics have said the pipeline makes no business sense because there is not enough demand for gas. Demand is so low that Nord Stream 1 last year worked at 70 percent of capacity and the Ukraine transit network at less than 50 percent. Gas prices have fallen by more than half since Nord Stream 1 started operations in 2011. Some of the talks are at a high level. Matthias Warnig, the CEO of the Nord Stream 2 consortium and a close associate of Russian leader Vladimir Putin, met Canete in April. Etienne Davignon, an - times last year. There are no lobbyist registries in Denmark, Finland, Germany or Sweden. But Mueller said: "We get support from different agencies in different countries according to the concrete needs for translations, media monitoring etc. and depending on the expertise of the agency". and Swedish waters The International Energy Agency in Paris recently slashed its forecast for EU demand in 2030 by 30 percent to 526 bcm. The EU commission says it could be just 370 billion cubic metres. Demand might recover as EU economies return to BUSINESS IN EUROPE JUNE 2016 — 09

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