Disputes in Brussels. The European Union wants to loosen sanctions against Russia? “Maybe they didn’t load in time?”

On Tuesday, September 20, the EU’s actions towards EU affairs were one of the topics of the Brussels meeting of EU affairs ministers from 27 countries. – There was broad support among my colleagues for providing continued financial and military support to Ukraine. We agree that timely and effective assistance is crucial. Further details will be discussed by leaders at the EU summit, said Minister Mikulasz Bek, who chaired the meeting on behalf of the Czech presidency.

Unexpectedly, however, a dispute broke out over the newly published guidelines of the European Commission on how to implement the existing sanctions against Russia. – It’s a very broad text. It raises the risk of abuse, i.e. circumvention of sanctions, argues one of our interlocutors in the EU institutions.

Sanctions against Russia. Coal transport allowed

The new guidelines indicate that the transport of certain additional goods, including coal and related products (to non-EU countries), “should be allowed to combat global food and energy insecurity”.

Earlier, the Commission explained that EU sanctions prohibit EU companies from transporting coal and providing financial services, including insurance, for such products from Russia. However, a Commission representative was supposed to explain to ministers today that the aim of the new guidance is to tackle the world’s energy and food crisis. Brussels has emphasized from the beginning that the sanctions do not apply to food or the transport of fertilizers from countries outside Europe, but today in the new text – to the surprise of Lithuanians and Poles – such sanction exemptions also apply to, among others, wood.

Sanctions. “Maybe they didn’t load in time”

– First of all, this text surprised us. We are trying to analyze it quickly – explains one of the diplomats. The threat to avoiding sanctions was first noticed by the Latvians, and then the rest of the Baltic states joined in. – It is possible that experts from other countries have not yet managed to load it – argues another of our interlocutors in Brussels. There will probably be official requests to the European Commission to narrow down the exemptions included in the new guidelines.

EU representatives went to the UN General Assembly this week with the will, as one of them explained, to “continue reclaiming” the ground in a “narrative battle with Russia”, which still manages to convince many countries in Africa and Latin America that it is the EU, Russia is not to blame for the disturbances in the energy and food markets.

The European Union is losing the “narrative battle”?

Brussels stubbornly reminds that, first of all, it was Russia that invaded Ukraine. Secondly, the EU sanctions do not affect trade in Russian food or fertilizers with non-EU countries. – Perhaps in this battle of narrative, the Commission has stumbled on new guidance. Although by not consulting them with the EU countries – says one of the diplomats. The Commission has not yet officially addressed these allegations.

The EU Council today finally approved €5 billion in further aid loans to Ukraine. The EU summit in May promised 6 billion in aid (the first billion was paid in August), so the financing of the remaining billions remains to be agreed. The European Commission, during the meeting of the ambassadors of the 27 EU countries, warned a few days ago that the reserves in the seven-year EU budget for 2021-27 have run out, so the leaders of the EU countries should start looking for new funds in October, e.g. for needs.

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Economic sanctions. What about gas price?

During the meeting of the ambassadors, m.in. Poland, the Baltic states, Ireland, and Finland called for work on additional sanctions against Russia. Poland also promotes new restrictions in the energy sector. However, most of the EU now focuses on more and more precise enforcement of existing restrictions, and has no appetite for negotiating additional sanctions packages. Poland, Italy, Romania and Belgium continue to demand the introduction of a price cap for gas from Russia (and, among others, Poland – also for all gas imported to the EU, including from ).

The loudest about his fear that in retaliation he would shut down all deliveries to Europe are now also spoken by the Slovaks. But Germany also demands further analysis of the impact of the price cap on security of supply.

Sanctions against Russia. Oil price cap

The European Commission, on the other hand, is preparing for a price limit on oil from Russia, already pre-agreed at the G7 level, which has been strongly pushed by the United States for several months.

The EU embargo on oil from Russia, which does not only cover the pipeline to Hungary, Slovakia and the Czech Republic, comes into force on December 5 (and on refined products in March 2023), so it is a price cap for non-EU buyers and thus a sharp reduction of Russia’s income. How to do it? Over 90 percent of oil-carrying ships in the world are insured by the London-based International Group of P&I Clubs.

The EU, in agreement with the sanctions system, included a ban on insuring ships carrying Russian oil, which will soon make its sea transport much more expensive. Meanwhile, the G7’s idea of ​​a price cap is based on modifying EU sanctions so that European insurers can work on oil shipments from Russia, but only below the price cap supported by the West.

European Union. Vet fight

Today, EU ministers also discussed the idea of ​​further limiting the unanimity rule, in order to on matters of foreign policy, the EU could decide by majority vote. This is promoted by Germany, and at least with regard to some areas of foreign policy, it is supported by France, Denmark, Sweden and the Netherlands.

Poland, on the other hand, is in a large group of countries opposed to the changes. But supporters of limiting the veto power use the example of Hungary slowing down the adoption of sanctions to encourage skeptics to think seriously about the limits of the unanimity requirement. There are suggestions that further steps in the accession process, including Ukraine will depend on the consent of the entire EU to limit the right of veto in the Council of the EU. The problem is that Hungary would also have to agree to such a radical – though not requiring treaty changes – reform.

– Many EU countries are not ready to completely abandon the unanimity rule. However, we asked them to indicate the most specific cases of qualified majority that they would be prepared to accept. We’ll see. I am neither an optimist nor a pessimist, said Czech Minister Bek after today’s deliberations.