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US sanctions on Russia risk Europe retaliation

Germany says it will retaliate against the United States if new sanctions proposed by the US Senate against Russia damage German companies. 

European and German firms are heavily involved in the Nord Stream 2 project which is about to take Russian gas across the Baltic to Europe through a pipeline.

Germany’s largest oil and gas producer Wintershall and its energy trading firm Uniper are among the European countries building the pipeline along with Royal Dutch Shell, Austria’s OMV and France’s Engie.

The US Senate voted on Thursday to impose new sanctions on Russia and force President Donald Trump to get Congress approval before easing any existing sanctions on Russia.

If passed in the House of Representatives and signed into law by Trump, the bill would allow new sanctions on Russian mining, metals, shipping and railways and other sectors.

Chancellor Angela Merkel’s spokesman Steffen Seibert said on Friday it was “strange” that the sanctions could also trigger penalties against European companies, adding “that must not happen.”

German Economy Minister Brigitte Zypries said Berlin would have to think about counter-measures if Trump backed the plan. “If he does, we’ll have to consider what we are going to do against it” she told Reuters.

Ties between Washington and Berlin are already strained after Trump flayed Germany for running a large trade deficit with his country. The new US president has also alienated other European partners after deciding to quit the landmark Paris agreement on combating greenhouse gas emissions.

German Foreign Minister Sigmar Gabriel and Austrian Chancellor Christian Kern said in a joint statement on Thursday that US sanctions should not be “threatening German, Austrian, and other European enterprises.”

Austrian Chancellor Christian Kern (R) and German Minister of Foreign Affairs Sigmar Gabriel deliver a press statement after a meeting in Vienna on February 27, 2017. (Photo by AFP)

Trump has put the US on a collision course with Europe after the two sides cooperated under former president Barack Obama to impose sanctions on Russia over the Ukraine crisis.

Zypries said the joint approach of Europe and the United States on Russia and sanctions has been undermined and abandoned under Trump.

France also underlined the difficulties that Washington’s “extraterritorial legislation spark” while the European Commission urged the US to “coordinate with its partners on such matters.”

US sanctions on Iran also face opposition from the Europeans who are seeking to forge stronger trade relations with the Islamic Republic.

European officials have already warned the new US government against wrecking a nuclear agreement which they reached with Iran last year, stressing that such a move would only isolate Washington.

The new penalties approved by the US Senate against Russia are melded with the Iran sanctions, putting the Trump administration in a bind because it would have to reject stricter measures against Iran in order to derail the Russia penalties.

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