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Gazprom to restart Nord Stream 2 construction

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Russia will restart construction of its Nord Stream 2 gas pipeline to Germany this week in the face of US sanctions that have paused construction for more than a year.

Kremlin-controlled gas group Gazprom will commence pipe laying in a section of the Baltic Sea administered by Denmark on Friday, despite measures from Washington designed to cripple the politically divisive project financed by five of Europe’s biggest energy companies.

The US, backed by Poland and other eastern EU states, claims the pipeline is a political project designed to increase Europe’s reliance on Moscow and bypass already existing pipelines through Ukraine. Russia and Germany say it is a purely commercial initiative to meet future higher gas demand in Europe.

The €9.5bn pipeline has long been one of Europe’s most hotly debated geopolitical issues and a bellwether for relations between Moscow and EU states.

But the Donald Trump administration’s decision to impose sanctions against the pipeline, while also promoting exports of its own gas to Europe, sparked intense arguments over Europe’s right to choose its own energy supplies and broader commercial relations with the US.

Those sanctions have delayed the pipeline beyond its initial planned opening date of mid-2020, and forced Gazprom to adjust its approach to accommodate for the loss of foreign contractors, while Washington has vowed to keep imposing restrictions necessary to block its completion or usage.

“The US sanctions will delay the launch of the project but will not stop its completion. Ultimately, Moscow, with the help of Berlin, will find ways to bypass the sanctions,” said Naz Masraff, director for Europe at Eurasia Group, a risk consultancy.

Work on the 1,230km-long pipeline was abruptly halted in December 2019 when Swiss pipe-laying company Allseas abandoned the project to avoid US sanctions designed to punish companies assisting in construction, with 94 per cent of the length completed. That forced Gazprom to find and prepare its own vessels to lay the remaining 120km on the seabed.

Denmark’s energy agency said in a statement that it had received the necessary documents to approve for pipe laying to resume on January 15. Gazprom will use the pipe-layer Fortuna ship and two support vessels, which are capable of laying about 1km of pipe a day. That could see it finish construction in about four months, dependent on weather conditions.

New US sanctions passed this month also apply to companies who insure and certify the pipe-laying operations, further complicating Gazprom’s efforts. DNV GL, a Norwegian risk assessment company, has already said it had ceased all inspection activities relating to the pipeline and would not be able to certify its completion. 

Nord Stream 2 said in a statement that it was “not in a position to comment on potential impacts” of future US sanctions. Russian president Vladimir Putin has vowed that the pipeline will be finished regardless of Washington’s opposition.

The pipeline runs alongside the already operational Nord Stream 1 and will add another 55bn cubic metres of gas supply a year.

While the pipeline is wholly owned by Gazprom, half of its cost has been provided by five EU companies: Shell, Uniper, OMV, Wintershall and Engie. It also has been steadfastly supported by Berlin.

An official in the German foreign ministry told the Financial Times: “Nord Stream 2 is a commercial project run by a consortium made up of private companies . . . According to our information, the construction permits necessary for laying the pipeline have been issued.”

Ms Masraff said that US president-elect Joe Biden would probably be more open to compromise given his desire to rebuild relations with Europe that have suffered under Mr Trump.

“Biden will be a lot more sensitive than Trump to European and particularly German sensitivity around Nord Stream 2 in the context of strengthening transatlantic ties,” she said. “Sanctions will likely be used as leverage to co-operate with the German government on restrictions to make the pipeline operational while also paying attention to Washington’s concerns over Ukraine.”

Additional reporting by Richard Milne in Oslo and Katrina Manson in Washington 



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Europe

FT 1000: Europe’s Fastest Growing Companies

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The latest annual ranking of businesses by revenue growth. Explore the 2021 list here — the full report including in-depth analysis and case studies will be published on March 22



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EU plans digital vaccine passports to boost travel

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Brussels is to propose a personal electronic coronavirus vaccination certificate in an effort to boost travel around the EU once the bloc’s sluggish immunisation drive gathers pace.

Ursula von der Leyen, European Commission president, said on Monday the planned “Digital Green Pass” would provide proof of inoculation, test results of those not yet jabbed, and information on the holder’s recovery if they had previously had the disease.

“The Digital Green Pass should facilitate Europeans‘ lives,” von der Leyen wrote in a tweet on Monday. “The aim is to gradually enable them to move safely in the European Union or abroad — for work or tourism.”

The plan, expected to be outlined this month, is a response to a push by Greece and some other EU member states to introduce EU “vaccination passports” to help revive the region’s devastated travel industry and wider economy. 

But the commission’s proposed measures will be closely scrutinised over concerns including privacy, the chance that even inoculated people can spread Covid-19, and possible discrimination against those who have not had the opportunity to be immunised.

In an immediate sign of potential opposition, Sophie Wilmès, Belgium’s foreign minister, raised concerns about the plan. She said that while the idea of a standardised European digital document to gather the details outlined by von der Leyen was a good one, the decision to style it a “pass” was “confusing”. 

“For Belgium, there is no question of linking vaccination to the freedom of movement around Europe,” Wilmès wrote in a tweet. “Respect for the principle of non-discrimination is more fundamental than ever since vaccination is not compulsory and access to the vaccine is not yet generalised.”

The travel sector tentatively welcomed the news of Europe-wide vaccine certification as a way to rebuild confidence ahead of the crucial summer season, but warned that regular and rapid testing was a more efficient and immediate way to allow the industry to restart.

Fritz Joussen, chief executive of Tui, Europe’s largest tour operator, said “with a uniform EU certificate, politicians can now create an important basis for summer travel”. But he added that testing remained “the second important building block for safe holidays” while large numbers of Europeans awaited a jab.

Marco Corradino, chief executive of online travel agent Lastminute.com, said he feared the infrastructure needed would not be ready in time for the summer season: “It will not work . . . at EU level because it is too complicated and would not be in place by June.”

He suggested that bilateral deals, such as the one agreed between Greece and Israel in February to allow vaccinated citizens to travel without the need to show a negative test result, had more potential.

Vaccine passport sceptics argue it would be unfair to restrict people’s travel rights simply because they are still waiting for their turn to be jabbed. 

Gloria Guevara, CEO of the World Travel and Tourism Council, said it was important not to discriminate against less advanced countries and younger travellers, or those who simply cannot or choose not to be vaccinated. “Future travel is about a combination of measures such as comprehensive testing, mask-wearing, enhanced health and hygiene protocols as well as digital passes for specific journeys,” she added.

A European Commission target to vaccinate 70 per cent of the bloc’s 446m residents by September means many people are likely to go through summer unimmunised.

While some countries around the world have long required visitors to be vaccinated against infectious diseases such as yellow fever, a crucial difference with coronavirus is that those inoculations are available to travellers on demand. 

Questions also remain about the risk of people who have already been vaccinated passing on coronavirus if they contract the disease.

 





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EU must prepare for ‘era of pandemics’, von der Leyen says

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Europe must prepare its medical sector to cope with an “era of pandemics”, the European Commission president said, as she warned the bloc was still in its most difficult period for Covid-19 vaccine deliveries. 

Ursula von der Leyen told the Financial Times that the EU could not afford to sit still even once Covid-19 has been overcome, as she described her plans for a Europewide fast-reaction system designed to respond more quickly to emerging medical threats. 

“Europe is determined to enlarge its strength in vaccine production,” she said in a telephone interview. “It’s an era of pandemics we are entering. If you look at what has been happening over the past few years, I mean from HIV to Ebola to MERS to SARS, these were all epidemics which could be contained, but we should not think it is all over when we’ve overcome Covid-19. The risk is still there.” 

Von der Leyen last month unveiled plans for a biodefence preparedness plan called the HERA Incubator, which will combine researchers, biotech companies, manufacturers and public authorities to monitor emerging threats and work on adapting vaccines. This will become part of a Health Emergency Preparedness and Response Authority (HERA). 

The concept is an attempt to mirror some of the benefits conferred by America’s Biomedical Advanced Research and Development Authority, which is charged with the job of responding rapidly to new health threats.

“The US has a strong advantage by having BARDA . . . this is an infrastructure Europe did not have,” von der Leyen said. “But Europe has to build up to be prepared for whatever comes, and also for the next possible pandemics. This is the HERA incubator.” 

The EU remains within its “most difficult quarter without any question” for vaccine deliveries, she said, cautioning “many, many problems” could always occur within the production process.

Looking towards the second quarter, she pointed out that a second EU contract with BioNTech/Pfizer for their vaccine would kick in, alongside the new jab from Johnson & Johnson, which is expected to be authorised in March.

In an EU summit on Thursday, von der Leyen addressed vaccine production and the threat of virus mutations after a rocky start to the year, when she was hit by complaints from politicians in member states, including Germany, about supply shortfalls. 

Von der Leyen acknowledged to the European Parliament in early February that mistakes had been made in the EU’s vaccination effort, and the campaign remains behind those of the US and UK. Among the difficulties are continued production problems at AstraZeneca’s European facilities. 

Von der Leyen said she was sticking with the EU’s target for the delivery of 300m doses in the second quarter, saying the challenge will shift from vaccine production to national rollouts. As for AstraZeneca’s shipments, she said: “I need to see the proof of the pudding . . . It’s very good that they also delivered from the rest of the world, but they have to honour their contract and we want our fair share.”

Ursula Von der Leyen says she is sticking with the EU’s target for the delivery of 300m doses of the AstraZeneca vaccine in the second quarter © Remo Casilli/Reuters

The good news for the EU is its access to mRNA technology, which is used in the BioNTech/Pfizer vaccine and which scientists believe can be used to rapidly adapt to mutations, said von der Leyen. 

But she also supported French president Emmanuel Macron’s proposal to share up to 5 per cent of supplies to permit the vaccination of healthcare workers in developing countries.

“We all suffer from the fact that the scaling up was not and is not as rapid as we thought at the beginning. This has a general effect all over the world,” she said. “With production picking up I think we should never forget that only if everybody has access to vaccines will we overcome this virus.”

Von der Leyen added that the EU needed to be particularly concerned about developments in its immediate area. 

“The mutant story is worrying me the most,” she said. “When the virus is still raging in the neighbourhood, the probability that mutants will occur, that will come back, for example, to Europe, is only rising.”



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