Merkel Coalition Hits Back at Trump's Attack on Gas Pipeline

(Bloomberg) -- Germany’s governing coalition pushed back against President Donald Trump’s criticism of a gas pipeline with Russia, widening trans-Atlantic tension beyond conflicts over trade and security.

Trump on Tuesday reprised his allegation that Germany isn’t “paying” its fair share for NATO, while throwing in a hit at the Nord Stream 2 pipeline that directly links Germany and Russia. Germany will be paying “billions of dollars” to Russia, Trump said at the White House. “That’s not right.”

“This is fake news,” Joachim Pfeiffer, a senior lawmaker from German Chancellor Angela Merkel’s Christian Democratic Union party, said in an interview. “He’s comparing apples and oranges.”

It’s the latest evidence that Europe’s biggest economy is a running target for Trump, who has decried Germany’s trade surplus with the U.S., its defense spending that falls below a NATO-set target and now its energy ties with Russia, which are also a point of tension with Germany’s European Union allies.

Lawmakers in Merkel’s coalition ridiculed Trump’s comments, saying the president must be looking for ways to promote exports of U.S. liquefied natural gas from shale fracking.

“After his unsuccessful attempt to impose punitive tariffs on steel and aluminum in Europe, he ignites the next stage of escalation in order to safeguard national export interests,” said Timon Gremmels, a Social Democrat member of the lower house. Trump’s motive “is as simple as it is obvious.”

Baltic Visitors

During a White House visit by leaders of the three Baltic nations, Trump conflated the North Atlantic Treaty Organization’s defense-spending target of 2 percent of economic output with Nord Stream 2, which was approved by German regulators in March and has Merkel’s support.

“Even now, Germany is paying 1 percent and they’re not even paying the full 1 percent,” Trump said. “Germany hooks up a pipeline into Russia, where Germany is going to be paying billions of dollars for energy into Russia. And I’m saying, ‘What’s going on with that?”’

German defense spending increased to more than 1.2 percent of gross domestic product last year, or about 37 billion euros ($45 billion), according to the Defense Ministry. Merkel’s new coalition government has agreed to stand by its NATO commitments, though her Social Democratic coalition partner has rejected a boost to 2 percent of GDP.

Clashing Interests

Nord Stream’s planned expansion is raising concern among eastern EU members, including Poland and the Baltics, about dependence on Russian gas. Uniper SE, Engie SA, Royal Dutch Shell Plc, OMV AG and BASF SE’s Wintershall are Gazprom PJSC’s partners in Nord Stream 2, which would double the pipeline’s capacity to almost 30 percent of current EU demand.

Roderich Kiesewetter, a CDU member of the German parliament’s foreign affairs committee, said U.S. interests won’t dictate Europe’s energy policy, regardless of EU divisions over the pipline.

“The U.S. obviously has its own energy policy, which involves the export of liquefied natural gas,” he said by phone.

--With assistance from Brian Parkin and Birgit Jennen

To contact the reporters on this story: Patrick Donahue in Berlin at pdonahue1@bloomberg.net, Rainer Buergin in Berlin at rbuergin1@bloomberg.net.

To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net, Tony Czuczka, Richard Bravo

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