ADVERTISEMENTThe European Union’s latest package of sanctions against Russia has run into political trouble ahead of a meeting of the 27 leaders later this week, casting doubt over when and how the economic restrictions could be formally approved.
Two fracture lines have opened in recent days.
The first relates to the price cap on Russia’s seaborne crude oil, which the European Commission initially proposed to lower from $60 to $45 per barrel in a bid to squeeze the Kremlin’s energy revenues, which are crucial to finance the invasion of Ukraine.
Unlike other sanctions, the cap was designed and agreed upon at the level of the G7 and in close coordination with the United States. However, when G7 leaders travelled last week to Canada for their annual meeting, there was no indication that Donald Trump, who left the gathering a day early, was in favour of the downward revision.
Since his return to the White House, Trump has consistently ignored pleas from Kyiv and Western allies to increase pressure on Russia, even though Vladimir Putin continues to ignore his proposal for a 30-day unconditional ceasefire.
The lack of US support put the EU in a tight spot, caught between the desire to go it alone and fear of disrupting the ground-breaking project.
At the end of the G7 summit, Ursula von der Leyen surprised observers when she downplayed the urgency of the move, citing the rise of oil prices caused by the military escalation between Israel and Iran.
The $60 cap «had little effect, but in the last days, we have seen that the oil price has risen [and] the cap in place does serve its function,» the Commission president said.
«So for the moment, there’s little pressure on lowering the oil price cap.»
But High Representative Kaja Kallas, who two weeks ago presented the new sanctions alongside von der Leyen, has embraced a diametrically opposed position, arguing the effects of the Middle East conflict are helping Russia make more money in the energy markets and therefore reinforce the case for the $45 per barrel.
«As there was no clear mandate from the G7, then some member states also have their doubts about the oil price cap, and everybody is, of course, worried about the situation,» Kallas admitted after a meeting of foreign affairs ministers on Monday.
«But at the same time, as we know that the oil price is rising, then it is also not good if Russia benefits, actually, from this war going on in the Middle East, and can wage or finance its war in Ukraine.»
On Tuesday, a Commission spokesperson denied a contradiction in the thinking and insisted the 18th package, which also targets Russia’s financial sector, the Nord Stream pipelines and the «shadow fleet», remains as originally intended.
«Our proposal on the old price cap is there and stands,» the spokesperson said, noting it was up to the capitals to «bring it forward».
As a result of the G7 debacle and the Middle East conflict, member states find themselves split on whether the lower cap should remain on the table or be discarded for the time being, several diplomats told Euronews. With unanimity needed to secure the approval, the $45 cap is essentially considered dead in the water.
A transactional veto
The second fracture involves Hungary and Slovakia.
The two countries, which have become increasingly aligned, have connected the latest package of sanctions with the proposed roadmap to phase out all Russian fossil fuels by the end of 2027. Although both matters relate to Moscow, they are technically separate.
The ambitious roadmap, presented in May, foresees several bans to gradually remove all purchases of Russian pipeline gas and liquefied natural gas (LNG), which last year represented about 19% of the bloc’s gas consumption.
In an innovative turn, the Commission has framed the phase-out through the lenses of energy policy, meaning it will only require a qualified majority to be approved.
«The era of Russian fossil fuels in Europe is coming to an end,» von der Leyen said.
Hungary and Slovakia, two landlocked countries that still rely on Russian gas and oil, have vociferously protested the roadmap, saying it will infringe their sovereign rights, raise consumer prices and endanger energy security.
Since the phase-out itself cannot be vetoed, Hungary and Slovakia have resorted to the sanctions, which can be vetoed, as a way to advance their cause.
«We are not willing to allow Brussels to make Hungarian families pay the price of further support for Kyiv,» Hungarian Foreign Minister Péter Szijjártó said on Monday.
His Slovak counterpart, Juraj Blanár, noted his country was not opposed to the content of the sanctions as such, but that it was «absolutely crucial» to link it to the phase-out.
«We cannot afford to take such risks, so we are asking for guarantees on how these negative impacts on the Slovak Republic will be dealt with,» Blanár said.
It was not immediately clear what these «guarantees» might look like in practice.
One option, diplomats said, could entail the establishment of a special fund to help Hungary and Slovakia cut ties with Russian energy. It is not uncommon for member states to ask Brussels for money in exchange for political support.
The proposed phased-out, though, does not include a dedicated financial envelope, so any additional support would have to come from somewhere else.
Another option could see the Commission release a statement with a list of commitments, as was the case in January when Hungary threatened to block the renewal of all sectoral sanctions.
Back then, the row was prompted by Ukraine’s decision to terminate the transit of Russian gas through its national territory, to which both Hungary and Slovakia strongly objected. The statement described «the integrity of the energy infrastructure» as a «matter of EU security» that other countries should «respect».
Although the text was non-binding, it was enough for Budapest to lift its veto.
The debate on the 18th package of sanctions is set to reach the summit of EU leaders on Thursday, where Hungary’s Viktor Orbán and Slovakia’s Robert Fico are expected to push their agenda. Orbán, in particular, has gained a reputation for his transactional approach to negotiations, seeking controversial concessions and derogations.
Despite the hiccups, diplomats are confident that an agreement on the sanctions can be sealed before the Polish presidency of the EU Council ends on 30 June.
«We are waiting for the outcome of Thursday’s summit, and I believe that the conversation after Thursday will be much easier. We remain optimistic,» Ignacy Niemczycki, Poland’s secretary of state, said on Tuesday morning.
«I would also like to point out that the positions of Hungary and Slovakia are, in fact, different. There are some meaningful nuances here, but yes, I remain optimistic.»
