Polish watchdog fines Gazprom $7.6 billion over Nord Stream 2 gas pipeline

Above, pipes for the Nord Stream 2 Baltic Sea pipeline are stored on a site at the port of Mukran in Sassnitz, Germany, on September 10, 2020. (Reuters)
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Updated 07 October 2020

Polish watchdog fines Gazprom $7.6 billion over Nord Stream 2 gas pipeline

  • Poland sees Nord Stream 2 as a threat to Europe’s energy security as it will increase reliance on Russian energy

WARSAW: Poland’s anti-monopoly watchdog said on Wednesday it had fined Russia’s Gazprom more than $7.6 billion for building the Nord Stream 2 gas pipeline without its approval.
The UOKiK watchdog also said it had imposed a 234 million zloty fine on five other firms involved in financing $11 billion project set to double Russia’s gas export capacity via the Baltic Sea.
Nord Stream 2 is led by Gazprom, with half of the funding provided by Germany’s Uniper and BASF’s Wintershall unit, Anglo-Dutch company Shell, Austria’s OMV and Engie.
Poland sees Nord Stream 2 as a threat to Europe’s energy security as it will increase reliance on Russian energy.
The United States has also imposed sanctions on companies laying pipes for the project.
UOKiK has been examining the project for years. In August it fined Gazprom 213 million zlotys over a lack of cooperation regarding the project.
“The launch of NS2 will threaten the continuity of natural gas supplies to Poland. An increase in the price of the product is also highly likely, with the said increase being borne by Polish consumers,” said Tomasz Chrostny, president of UOKiK.
“Completion of this investment project increases economic dependence on Russian gas – not only in the case of Poland, but also of other European states,” Chrostny said.
Gazprom did not reply to a request for immediate comment.
Construction of the 1,230-kilometer pipeline is nearly finished but for a final stretch of roughly 120 km in Danish waters.
Work was halted in December as pipe-laying company Swiss-Dutch Allseas suspended operations because of the US sanctions targeting companies providing vessels.


‘The stock market, stupid’ — Trump’s claim is looking hollow 

Updated 29 October 2020

‘The stock market, stupid’ — Trump’s claim is looking hollow 

  • The timing of the Wall Street downturn is the worst possible for the incumbent, who has declared every new peak in the S&P as a personal victory throughout his presidency
  • The likes of Apple, Amazon, Alphabet and Facebook are due to declare their earnings for the third quarter, and how those numbers are received could give the indices a boost

Before the US election of 1992, candidate Bill Clinton summed up what he saw as the reason he would become president: “It’s the economy, stupid.” He was proved right as voters disowned the economic policies of President George H.W. Bush in their droves to elect Clinton. 

Until the COVID-19 pandemic began to ravage the US economy in March, President Donald Trump would have been able to make the same claim. For the four years of his presidency, the US economy had continued the progress initiated by his predecessor to recover from the 2009 global financial crisis.

By most measures — growth, employment, inflation — the Trump years had been good, and those on the top of the pile had even more reason to be grateful thanks to the big tax cuts he had made a flagship policy.

The pandemic changed all that in the space of a few weeks as lockdown measures shocked the economy. Jobless claims soared to all-time records, bankruptcies and closures affected large swathes of American business, and gross domestic product collapsed. The International Monetary Fund forecasts that the American economy will shrink by 4.3 percent this year.

But Trump could still claim instead that “it’s the stock market, stupid” as a reason he could be re-elected. Mainly because of the trillions of dollars injected into the economy in the form of fiscal stimulus, US share indices had swum against the economic tide.

The S&P 500 index hit an all-time high in September, allowing Trump to boast that under his administration, investors and the millions of people whose livelihoods depended on the financial industry had never had it so good.

Now, it looks as though even that final claim is looking more fragile. For the past couple of days, US and European stock markets have gone into reverse as investors took fright at the rising number of COVID-19 cases and the re-imposition of economic lockdowns in many countries.

Trump might argue, with a little justification, that Wall Street is worried about the prospect of Joe Biden being elected president by the end of next week. Certainly the contender, by definition, is something of an unknown quantity in terms of economic policy.

He is also known to favor some policies — such as tighter regulation on environmental sectors, more spending on health care, and higher taxes for federal services and projects — that have traditionally been regarded as contrary to the philosophy of “free market” America.

In particular, the energy industry is worried about possible restrictions on shale oil and gas production that Biden and his “green” team are believed to favor. However, it should be pointed out that the Democratic candidate has specifically said he will not ban shale fracking, as some environmentalists want.

In any interesting side-story, the state of Texas — one of the biggest in terms of electoral college votes — would seem to have more to lose than any other if the energy scare stories about Biden were true. Yet the contest there between Democrats and Republicans is the closest it has been for decades, according to opinion polls.

The timing of the Wall Street downturn is the worst possible for the incumbent, who has declared every new peak in the S&P as a personal victory throughout his presidency and a sign of his deal-doing prowess. If even this claim is denied to him in the final week of campaigning, it would make the uphill battle against the polls even more difficult.

There is a chance that Big Tech might offer some relief. The likes of Apple, Amazon, Alphabet and Facebook are due to declare their earnings for the third quarter, and how those numbers are received could give the indices a boost, given that they were the ones largely responsible for the big market gains earlier in the year.

But for Trump, any such respite might be too little, too late. It looks as though Wall Street and Main Street are finally catching up in their gloom, and there is nothing the president can do about it.