- The EU was quick to impose sanctions in the early days of the war
- The ninth package this week uncovered more differences
- Some EU countries fear “collateral damage” for their economies
- Russia says sanctions backfire, its economy is resilient
BRUSSELS, Dec 16 (Reuters) – The European Union’s agreement on sanctions against Russia is faltering as nervousness about the impact on Europe’s own stumbling economy weakens resolve to punish Moscow for the war in Ukraine.
EU leaders agreed on a ninth package of sanctions on Thursday, but talks have been acrimonious, with Poland and the Baltic states, neighboring Russia, backing tougher measures, while states further west like Germany have been more hesitant.
Some, like Belgium and Greece, as well as Hungary, which is still heavily dependent on Russian energy imports, have resisted further sweeping measures, EU diplomats told Reuters.
“It is becoming increasingly difficult to impose sanctions that hit Russia hard enough without causing excessive collateral damage to the EU,” said a Belgian government spokesman ahead of the agreement at the EU summit.
After Russia invaded Ukraine in February, sparking the biggest conflict in Europe since World War II, the European Union presented a united front and responded with rapid moves against Russia, unusual for the 27-nation bloc in which opposing positions Voices often turn debates into marathon meetings.
Sanctions have already been imposed on a number of companies and Russian individuals, overflights of Russian planes have been banned and transactions with several Russian banks have been suspended.
But it has become more difficult to find common ground now.
After talks this week, Lithuanian Foreign Minister Gabrielius Landsbergis called the latest sanctions deal a “missed opportunity” and said he was disappointed that EU nations had spent more time discussing exemptions than tougher steps.
The latest measures have targeted entities linked to the Russian military, cracked down on drones and froze assets at two Russian banks, among other things.
But tensions were palpable during the talks. Lithuania and others protested moves to secure spin-offs to free a handful of Russian oligarchs involved in agriculture and fertilizers, although this dispute was eventually defused, sources said.
Poland and the Baltic states, which are closer to the frontline, have in recent weeks circulated a proposal for broader sanctions, including on Russian gas and its nuclear industry, and argued against exemptions, such as on the sale of Russian steel and diamonds.
‘THAT’S NOT FAIR’
Some in this group want Gazprombank, the center for energy payments to Russia, to be targeted, a person familiar with the matter said. The person said many countries are reluctant, but added that these issues would be discussed in 2023.
For some European politicians, like those in Poland, who are facing fighting on their doorstep, the reluctance of other states to support tougher moves has proved frustrating.
“We will ask Germany to change its policy. It is not fair to rely on Poland to protect it from the threat of war,” said Radosław Sikorski, Poland’s former foreign minister and now a member of the European Parliament. “Just because you’re richer and taller doesn’t mean you’re always right.”
Russia says sanctions against the West have boomeranged, sending inflation skyrocketing as energy prices have soared. Moscow says its own economy is resilient.
Meanwhile, existing EU measures are not always watertight. The EU has put a price cap on Russian oil shipments by sea, but its crude is selling below that level, so revenues are still flowing to Moscow.
The cap has been billed as another punishment for Russia, but some officials say the main effect is to dilute the bloc’s own restrictions on oil trading, as European insurers can cover Russian supplies provided the price stays below the cap.
The oil cap – intended to align the whole EU with the United States – has been adjusted in a nod to Greece and Cyprus, which have large tanker fleets, people familiar with the matter said.
European diplomats and officials speaking during this week’s talks told Reuters the bloc was nearing its borders.
“Now we are careful with sanctions so that we don’t go so far as to totally damage the European economy,” said Edita Hrda, the Czech Republic’s ambassador to the European Union, which holds the EU presidency.
“If we take certain steps against Russia, it could cost some political leaders their jobs. We must give countries time to adapt. including those that have determined the form of recent sanctions.
Hungarian Prime Minister Viktor Orban campaigned against sanctions at home, using placards showing punitive measures such as bombs destroying Hungary’s economy.
Others are more discreet, others have half an eye on future post-war relations with Russia.
Chancellor Olaf Scholz said this month the EU will “tighten sanctions against Russia as long as Putin continues his war.”
He also said ties were now “reduced, reduced, reduced” but that there should again be an opportunity for economic cooperation for “a Russia that ends the war”.
writing from John O’Donnell; additional reporting by Andrius Sytas in Vilnius and Krisztina Than in Budapest; Editing by Edmund Blair
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