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The introduction of new sanctions against Russia will become an increasingly difficult task for the European Union

Photo: Chancellor of Austria at the EU Summit
Source: Vienna International News

On the night of May 31, the adoption of the sixth sanctions package was announced, which provides for the disconnection of Sberbank (the largest bank in Russia) from the SWIFT system; complete blocking of three major Russian state propaganda channels in the European Union; personal sanctions against those responsible for waging war against Ukraine and war crimes; and most importantly, the restriction of oil imports from Russia by two-thirds (the oil supply through pipelines was removed from the embargo). At the same time, the prohibition for citizens of the Russian Federation to buy real estate in EU member states was excluded from the final document. This exception was a consequence of the position of Cyprus.

Coordinating the decision has become a daunting task, as not all countries have agreed to an oil embargo. In the end, Greece and Hungary opposed a total ban on oil imports from Russia. Greece has insisted on removing the clause banning the transportation of Russian oil by European ships. Hungary, in turn, imports Russian oil through the southern branch of the Druzhba pipeline. According to government figures, the country buys about 65 percent of its oil from Russia - more than twice the EU average (26 percent).[1] Hungarian Foreign Minister Peter Siyarto also offered his consent to the European Union in exchange for 700-750 million euros in investments in Hungarian energy.[2] Hungary's bargaining finally ended with the country's exemption from the oil embargo, which Prime Minister Viktor Orban presented as a victory. Probably, the European Union could no longer delay the adoption of the sixth sanctions package, because 52 days had passed since the adoption of the fifth one, and therefore it was done without the inclusion of Hungary.

Since the beginning of the war, Hungary has taken a pro-Russian position and this is not surprising, since it is one of the three countries of the European continent (Russia, Serbia, Hungary) that misses its imperial past, violates European principles and exploits the right of veto in the EU and NATO. Last year, the Netherlands and Luxembourg already raised the question of exclusion of this state from the EU. This year, the Visegrad Four countries refused to hold joint consultations with Hungary within this format. Such a destructive and pro-Russian policy of Orban can lead to the exclusion of Hungary from the European Union, and this issue is worth discussion.

Serbia and Hungary continue to cooperate with Russia amid Russian aggression. Countries keep buying Russian energy, while flights from Belgrade to Moscow are still conducted. On May 29, Alexander Vucic agreed on a new contract for gas supplies from Russia at a favorable price for three years. Corrupt European politicians and lobbyists in Europe have realized the possible consequences of cooperating with Russia and are severing ties with the Kremlin one after another. Former Federal Chancellor of Germany Gerhard Schroeder, CEO of Nord Stream 2 AG Matthias Warnig, and former Austrian Foreign Minister Karin Kneisl have already left Rosneft. However, countries facing problems with democracy, such as Serbia and Hungary, are currently neglecting reputation that could hit their European future prospect, and it should happen. The Russian-Ukrainian war has already led to negative consequences not only in European countries but also abroad. Therefore, it is impossible to remain neutral and bypass the efforts of the Euro-Atlantic area countries in order to maintain a partnership with the aggressor state.

 

In the future, the introduction of sanctions will become a more difficult task. As European countries feel more affected by the Russian-Ukrainian war, the willingness of officials to put pressure on Russia is decreasing. For example, the Prime Minister of Belgium, Alexander De Croo, after the adoption of the sixth package, said the bloc “should pause it for now” before moving on to consider a new round of sanctions. According to the Prime Minister of Austria, the ban on Russian gas imports will not be discussed in a next sanctions package.[3]

However, whether the efforts that have been taken are sufficient to force the Kremlin to abandon its attempts to seize the territory of Ukraine? The head of the European Commission, Ursula von der Leyen, commenting on the new sanctions package, noted that the ban on Russian oil would reduce oil imports from Russia to Europe by 90% by the end of 2022. Bloomberg writes that a ban on the supply of oil by sea will reduce Russia's annual budget by more than 10 billion US dollars. Another $12 billion in losses will come from Poland and Germany's refusal of russian pipeline oil. According to the Center for Transport and the Environment (T&E), Russia receives about 285 million euros daily from European countries for oil. Based on these data, instead of $102 billion, Russia will receive $80 billion in profits. That means in the coming months, Russia will retain the ability to wage a war against Ukraine. The Russian economy continues to generate profits, at the same time the aggressor state still has an advantage in the amount of equipment.

European countries, the US and Ukraine should focus on facilitating international support on other continents, because Russia still has workarounds and will use them as long as such opportunity exists. Given the decision taken by the EU on May 31 to ban insurance for ships transporting Russian oil, the creation of restrictions for Russia outside of Europe is gradually being implemented. As noted in The Wall Street Journal, these sanctions could undermine Russia's efforts to sell its oil in Asia, where the Russian leadership is trying to redirect its exports. In addition, it is already known that OPEC, due to the partial EU embargo against the Russian Federation, is considering the possibility of removing Russia from the agreement on oil production. If the Russian Federation is excluded from OPEC, other countries, including Saudi Arabia and the UAE, will be able to increase production.

Currently, there is an increase in fatigue from the Russian-Ukrainian war. European countries are suffering economic losses and therefore their willingness to put pressure on Russia may decrease. It is important to maintain a united front in the fight against Russia and increase pressure on the aggressor country. The economic component is extremely important in the context of the ability of the Russian Federation to continue the war against Ukraine. As long as Russia has the ability to sell energy, it will be able to wage a war of conquest against Ukraine. Therefore, the next priority step for the United States, the European Union and Ukraine should be to increase pressure on Russia by securing support from countries and organizations outside Europe.
 


Sources:

1. ЄС представив проєкт нафтового ембарго проти РФ з винятком для двох країн – ЗМІ, 04.05.2022,
URL: https://www.eurointegration.com.ua/news/2022/05/4/7138845/
2. ЄС ДОСЯГНУВ ЗГОДИ З УГОРЩИНОЮ ЩОДО ЕМБАРГО НА РОСІЙСЬКУ НАФТУ, 31.05.2022,
URL: https://www.5.ua/svit/yes-dosiahnuv-zhody-z-uhorshchynoiu-shchodo-embarho-na-rosiisku-naftu-278588.html
3. Туреччина хоче змінити офіційну міжнародну назву країни через ООН, 31.05.2022,
URL: https://hromadske.ua/posts/turechchina-hoche-zminiti-oficijnu-mizhnarodnu-nazvu-krayini-cherez-oon