No deal reached on Nord Stream pipeline as Merkel visits Biden - Axios

The White House is not expecting any agreement on Russia's Nord Stream 2 pipeline to emerge from President Biden's meeting on Thursday with German Chancellor Angela Merkel, despite speculation that such a deal could be close.

Why it matters: The Russia-to-Germany natural gas pipeline faces strong bipartisan opposition in Washington, but Biden in May waived sanctions on the company working to complete it. The White House noted that the pipeline was already mostly finished and said Biden wanted good relations with Germany and "diplomatic space" to reach a deal with Merkel on the pipeline issue.

The big picture: Despite declining to impose those key sanctions, the Biden administration calls the pipeline a "Kremlin geopolitical project." To Ukraine, it's a dire national security threat.

• Russian gas currently flows through Ukraine en route to Europe. Nord Stream 2 would bypass Ukraine and give Russia valuable leverage over its former client state.
• Ukrainian President Volodymyr Zelensky was deeply disappointed with Biden's decision to waive sanctions, he told Axios in June. Other countries in Central and Eastern Europe were also concerned.

The White House wants a deal with Germany that includes "concrete mechanisms to ensure that energy is not used as a coercive tool against Ukraine, our eastern flank allies or any other country," the senior official said.

• Various ideas have been floated to make it more difficult for Russia to shut off gas supplies to Ukraine and to assuage other security concerns surrounding the pipeline.
• Both sides are aiming for a deal by August, at which time the Biden administration will have to report back to Congress on the sanctions waiver.
• Merkel told reporters on Wednesday that she planned to discuss Nord Stream with Biden on what could be her last official visit to Washington, but when asked whether she thought she'd leave with a deal, said, "I think rather not."

The bottom line: The senior administration official was more concrete: "We are not anticipating any formal announcement or deliverable [on Nord Stream] coming out of the leaders' meeting tomorrow."

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No deal reached on Nord Stream pipeline as Merkel visits Biden - Axios
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