Still, the sanctions will force Moscow to overhaul its LNG business model — particularly for supplies it sends to Asia through Europe. Russia will now likely have to reroute those shipments via the Arctic Sea, requiring specially equipped icebreakers that are in short supply.
For Germany, however, the disagreement wasn’t even about fuel.
Berlin was worried that the sanctions would broaden a measure forcing EU companies to ensure customers are not selling goods on to Russia.
Currently, that so-called no-Russia clause only applies to firearms, battlefield items and dual-use goods with both a military and civilian application. Germany feared that expanding the clause to cover more civilian products, like chemicals and machinery for metalworking, would hammer small businesses.
The difficulty, Berlin said, is that smuggled products often make many stops before reaching Russia, making it near-impossible for smaller companies to track the entire chain. Germany argued that smaller, export-oriented companies will simply give up on some business in Asia or the Middle East that isn’t even connected to Russia, fearful about potential sanctions violations.
“It’s all about the German economy,” one of the diplomats said. “They are very worried.”
The concerns have created yet another rift in Scholz’s three-party, center-left coalition: Germany’s foreign ministry, led by the Greens, has long wanted to push the sanctions through, while Scholz’s Social Democrats wanted to hold out until the no-Russia clause issue was resolved.
Last week, an official from Annalena Baerbock’s foreign ministry, granted anonymity to speak candidly, said they feared Germany’s delays were hurting Berlin’s attempts to shed its pre-war reputation for pushing Russia-friendly economic policies.
