Berlin and Moscow have been at loggerheads since Russia’s annexation of Crimea four years ago, but they share a common interest in the Nord Stream 2 pipeline project, which will allow Russia to export more natural gas to northern Europe.

A U.S. government official this week said Washington had concerns about the project, and that companies involved in Russian pipeline projects faced a higher risk of being hit with U.S. sanctions.

“Donald is not just the U.S. president, he’s also a good, tough entrepreneur,” Putin said at a news conference, alongside Merkel, after the two leaders had talks in the Russian Black Sea resort of Sochi.

“He’s promoting the interests of his business, to ensure the sales of liquefied natural gas on the European market,” Putin said, departing from his usual approach of being scrupulously respectful when speaking about Trump.

“But it depends on us, how we build our relations with our partners, it will depend on our partners in Europe.”

As well as the differences over Nord Stream 2, European capitals are at odds with Washington over Trump’s decision to withdraw from the Iranian nuclear deal. Moscow shares Europe’s position on the deal.

Some commentators have said that a shared opposition to Trump’s stances on Iran and other issues could lead to a rapprochement between Europe and Russia, repairing a relationship badly damaged by the Ukraine conflict.

Merkel, who earlier in the day received a bouquet of pink and white roses from Putin as she arrived at his residence in Sochi, also hinted at tensions between Berlin and the Trump administration.

Asked about differences with the United States over the Iran deal and other issues, Merkel told reporters: “We have a strong transatlantic friendship, which during its history has had to withstand many questions of different opinions, and I think that might be the case now as well.”

While the Russian leader is frequently critical of U.S. policy, he has been meticulous about not attaching blame to Trump personally. Kremlin officials have said in the past the two men have a personal rapport that Putin wishes to preserve.

PIPELINE POLITICS

European states involved in Nord Stream 2 say it is a purely commercial project but the Trump administration say it is helping the Kremlin pursue its political agenda.

The pipeline may result in less Russian gas being transported via Ukraine, depriving Kiev’s struggling pro-Western government of transit fees that are a vital source of revenue.

In a nod to the U.S. concerns, Merkel said Russian gas should still be pumped through Ukraine. “We see Nord Stream 2 as an economic project but it also has implications and that’s why we are working on what guarantees Ukraine could be given,” she said.

Putin said he was willing to negotiate with Kiev about continued transit of Russian gas.

Despite the common ground on Nordstream and the Iran deal, long-standing tensions in the Berlin-Moscow relationship surfaced at the news briefing.

Merkel said she was worried about a new property law implemented by the government of Syria, which is backed by Moscow. Rights activists say the law allows the Syrian government to deprive people who have been displaced by the fighting of their homes.

“That is bad news for people who want one day to return to Syria. We will discuss that intensively and ask Russia to use their influence to persuade Assad not to do that. We must prevent facts being created on the ground,” Merkel said.

Putin a day earlier had received Syrian leader Bashar al-Assad at his residence in Sochi for talks.

At the briefing with Merkel, the Russian president chided European leaders over Syria, saying if they want Syrian refugees living in their countries to return home, Europe had to commit to reconstruction in Syria.

Diplomats say that is a bone of contention, because European governments believe Russia should pay the lion’s share of the multi-billion-dollar reconstruction cost since it is the main military force and powerbroker in Syria.