TIME TO REVIVE THE CAMINO ESPAÑOL BY POLITICO

Today, we’ll start with something a little different: A history lesson. In the 16th century, King Philip II of Spain reigned over the world’s first global empire, stretching from Mexico to the Philippines (which to this day bear his name). But at home in Europe, his empire was at risk of disintegrating.

The problem: Philip’s constant challenge was to connect his realms in Europe’s south (the Iberian peninsula) with those in the north (the Spanish Netherlands and parts of Germany) — a logistical nightmare, because between them lay rival France.

Philip created a sophisticated route to circumvent the French, using hundreds of galleons to cross the Mediterranean onto Spanish territories in Italy, then crossing the Alps to reach the lands we now call the Benelux and Germany. The new route came to be known as the Camino Español. Spain used that vital artery for decades to transport troops and silver to the warring north, in an effort to keep the empire united.

The future is history: Today, German, Portuguese and Spanish politicians are working to revive that very same route (compare these maps) to transport something just as vital — natural gas, and in the future, hydrogen — because France is blocking the construction of a pipeline through its own territory.

The pitch for a north-south pipeline is simple: Germany needs new gas suppliers; Portugal and Spain have them. (On top of a pipeline to Algeria’s gas fields, they have eight LNG terminals, including the EU’s largest, compared to Germany’s zero.) The pipeline would funnel hydrogen (made from abundant solar power in the south) to energy-hungry industries that will need green gas, such as steel mills and chemicals factories.

Are you with us, France? The fastest way to do that is by completing the €3 billion MidCat pipeline that runs from Spain through France, which is almost finished except for a stretch from Barcelona to Carcassonne. But France is blocking the completion of the pipeline, and German and Spanish leaders are growing increasingly frustrated with President Emmanuel Macron.

RAMPING UP PRESSURE: German Chancellor Olaf Scholz has been pushing hard for the construction of MidCat through France, as are his Spanish and Portuguese colleagues. Politicians and senior officials in Berlin, Lisbon, Madrid and Brussels told POLITICO that finishing MidCat is still their preferred option — but they are working on a Plan B.

Ministers speak: “We see the MidCat pipeline as a solution for the supply both of natural gas, and in the future hydrogen,” Spanish Foreign Minister José Manuel Albares told Playbook. Similarly, Portugal’s EU Affairs Secretary Tiago Antunes told Playbook in an interview that the three countries “hope that we’ll be able to convince France that this makes sense. It really is a no brainer.” But he added that if France does not budge, “there are also other alternatives.”

What’s behind French opposition: Macron has blocked the completion of MidCat, arguing earlier this month that he was against building new fossil fuel infrastructure. That’s angering officials in Berlin and Brussels, who say Macron actually opposes the pipeline for much less noble reasons: He doesn’t want competition for French energy exports. It seems that for all his talk of being a European statesman, Macron is acting more like King Henry IV, a monarch notoriously obsessed with re-shoring and mercantilism.

France has its own plans: In the short term, Paris wants to sell gas from its four LNG terminals to Germany, instead of being a transit country for gas from the south, officials in Berlin said. In the longer term, France hopes to sell vast amounts of hydrogen made with nuclear energy, a senior French official told Playbook. (That is, if they manage to fix all their broken nuclear reactors). But a north-south pipeline transporting “green hydrogen” would compete with France’s “nuclear hydrogen.”

Planning the Camino Español 2.0: Officials in Berlin, Lisbon and Madrid said they will build a pipeline with or without French approval. “If France does not evolve in its position … the link to Europe can be done with Italy,” Portugal’s Antunes told Playbook. “So linking directly Spain with Italy, leave Barcelona and arrive in Livorno. This is something that is now being considered and studied.”

Spain’s Albares agreed. While he said he had not given up hope on MidCat, “another possibility is a route via Italy.” Albares’ colleagues at the energy ministry are already working on permits for the alternative route.

Black humor: While building a pipeline through the Mediterranean will certainly be challenging, an official in Berlin joked that Germany had gained a lot of practice building pipelines through the sea with Russia’s Nord Stream.

Get ready for October: All eyes are now on a meeting between Spain’s Prime Minister Pedro Sánchez and Germany’s Scholz, along with their ministers, in the Galician harbor city A Coruña on October 5. “We will have Spanish-German government consultations in October where we also want to continue supporting this pipeline and the interconnections,” Albares said.

The big question: Will Scholz and Sánchez convince Macron, or will they be forced to circumvent France, as King Philip did before them?

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