More than three weeks of tug-of-war have passed, of twists and turns, of political vetoes tinged with complicity with the Kremlin and technical negotiations of overwhelming complexity, but in the end the European Union’s bite of the largest flow of financing from Russia has arrived. It has not been easy. Honoring those more than 20 days of talks with 27 parties, the pact has reached the stroke of midnight this Monday. “Agreement to prohibit the export of Russian oil to the EU. This immediately covers more than two-thirds of Russia’s oil imports, cutting off a huge source of funding for its war machine,” European Council President Charles Michel proclaimed on Twitter after almost hours of meeting.
This agonizing deal has double value for EU leaders. On the one hand, it subtracts financial resources from Russia to pay for the war it has opened by invading Ukraine. On the other hand, it maintains the unity of the Twenty-seven after tense negotiations in which some of the countries with a position most hostile to Moscow did not understand the position of Hungary, the country that has most resisted taking this step. Both issues were of equal importance to most countries. “We want the toughest possible sanctions against Russia, and the latter, ‘possible’, is important,” they pointed out in a delegation, emphasizing that with this adjective they sought not to leave anyone behind, not even Budapest.
Agreement to ban export of Russian oil to the EU.
This immediately covers more than 2/3 of oil imports from Russia, cutting a huge source of financing for its war machine.
Maximum pressure on Russia to end the war.
— Charles Michel (@eucopresident) May 30, 2022
The measure, according to various sources, will first hit crude oil imports by ship, which account for two-thirds of the total that flows to the EU from Russia. Instead, it leaves for later the restrictions on hydrocarbons that travel through pipelines, a mechanism designed to relieve Hungary, but also other countries with a similar geographical and energy situation: the Czech Republic, Slovakia or Austria, states without a coast and with great dependence on Russian fossil fuels, which, moreover, arrive almost exclusively through oil and gas pipelines. The agreement also excludes three more Russian banks from the SWIFT payment system, including the first Russian bank, Sberbank, and the prohibition of three television channels.
This minimum agreement that the capitals have on the table at the moment is far from the “total ban” that the president of the European Commission, Ursula von der Leyen, demanded 26 days ago, when proposing the sixth package of sanctions against the regime of Vladimir Putin, but saves for the moment the unity of the community bloc, whose heads of state and government of the EU meet this Monday and Tuesday in an extraordinary summit in Brussels.
Before the beginning of the council, most voices were betting on the agreement. “Everything I hear sounds like there could be a consensus, and sooner or later there will be,” German Chancellor Olaf Scholz assured in an appearance at the entrance. Community and diplomatic sources were confident that it could get to where it has finally come. “The agreement is practically closed”, also stressed a diplomatic source, aware of the talks that have taken place for weeks, which have even included a meeting of the ambassadors of the Twenty-seven in the morning to try to reach an agreement before the start of the summit. It has not been possible and it has had to be the leaders who unclog the situation.
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dialectical dynamite
The reason why it was not possible and who made it impossible was an open secret that was confirmed as soon as the Hungarian Prime Minister arrived at the European Council headquarters. Viktor Orbán has entered the summit with dialectical dynamite, causing the foundations of community unity to shake: “There is no commitment at all at the moment”, he snapped in an appearance at the entrance to the European Council, reiterating the blockade of Budapest. With this position, he sought to ensure access to crude oil even in the event that Moscow -or Ukraine- unilaterally decrees a pipeline cutoff in retaliation for the sanctions. “Today we have to fight for guarantees,” Orbán continued on his arrival at the summit. “If the oil stops and does not reach the country, we must allow ourselves to obtain it by other means, such as maritime transport.”
The negotiations of the leaders have tried to leave this point well tied, to achieve the Hungarian yes. And the pressure has increased during the meeting, because in mid-afternoon the Russian giant Gazprom announced the cutoff of gas supplies to countries that refuse to pay in rubles: as announced by the Dutch company GasTerra, the Russian company will close from tomorrow the handle of this fuel to the Netherlands, which joins a list that includes Finland, Poland and Bulgaria.
For most of these countries, except Bulgaria, this decision by Moscow is hardly traumatic. In the case of Poland, for example, the gas supply contracts with Russia end in a few months and starting in the fall it will be able to substitute that fuel with the gas pipeline that comes from Norway. For their part, the Netherlands and Denmark have announced their intention to dispense with Russian gas this year.
Nor was the president of the Commission, Ursula Von der Leyen, optimistic on arrival: “My expectations that we will reach an agreement in the next 48 hours are low”, she confessed at her entrance to an appointment to which the president of the Government, Pedro Sánchez, has arrived somewhat late due to the celebration in Madrid of the 40th anniversary of Spain’s entry into NATO. On his way to Brussels, also the headquarters of NATO, Sánchez took Jens Stoltenberg, secretary general of the Atlantic Alliance, on the plane, whom the Spanish president received this weekend.
Von der Leyen’s mood was different after the deal. “I welcome the agreement on sanctions against Russian oil. This will cut off 90% of Russia’s crude oil imports by the end of this year,” the German politician proclaimed on Twitter.
I welcome the #EUCO agreement tonight on oil sanctions against Russia.
This will effectively cut around 90% of oil imports from Russia to the EU by the end of the year.
– Ursula von der Leyen (@vonderleyen) May 30, 2022
With the compromise negotiated by the capitals, Hungary and the rest of the reticent countries to date —such as Slovakia and the Czech Republic, the three highly dependent on pipelined Moscow crude and with no access to the sea of any kind— are covered under the mantle of the temporary exemption to the network of Russian oil pipelines Druzhba (friendship, in Russian).
Russia’s black gold will also continue to arrive by pipeline to Germany and Poland, via the northern Druzhba branch, which crosses into the EU via Belarus. But these two partners have promised to disconnect completely by the end of 2022, according to sources close to the negotiation. In this way, the EU embargo will reach more than 90% of total Russian oil imports next December, which in 2021 totaled nearly 75,000 million euros, if derivative products are included. In other words, the ban reaches a figure of almost 70,000 million euros, causing a considerable hole in the coffers with which Putin finances the invasion of Ukraine.
The Executive arm of the EU trusts that after the green light from the Council – the body that represents the 27 capitals of the EU – the fringes and details still pending can be polished. There are three concerns yet to be clarified: the terms of the temporary exemption for oil pipelines, the countries that will finally be able to avail themselves of it and the guarantees so that the fact of exempting an entry route does not end up cracking the prized single market of the EU to avoid For example, that a country that continues to receive cheap Russian oil resells it to other countries that have already declared an embargo.
The progress of the work attests to the draft conclusions that have entered the summit: “The European Council agrees that the sixth package of sanctions against Russia will cover crude oil, as well as oil products, delivered from Russia to the Member States. , with a temporary exception for crude oil delivered by pipeline”, reads the provisional text to which EL PAÍS has had access. The draft urges the Council “to finalize it and adopt it without delay”, and calls for finishing off the fringes that are still up in the air.
Diplomatic sources acknowledge that the debate has been much more complicated than they initially thought, due to the different variables and unexpected ramifications of a power outage. The draft conclusions even contemplate the need to articulate solidarity mechanisms between European partners “in the event of a sudden interruption of supply”. This is a possibility that nobody rules out, either because Moscow suddenly decides to cut off the flow of oil by tube in retaliation against sanctions or because the oil pipeline that runs from Russia to Hungary through Ukraine suffers some setback. The text also includes an additional guarantee: “The Commission will regularly monitor and report to the Council on the application of these measures to ensure equal conditions in the EU single market and security of supply.”
At the meeting in Brussels, the Twenty-seven will discuss various issues related to the Russian invasion of Ukraine: from food security to the common defense policy, passing through energy, where Hungary plans to demand investment in infrastructure to help in its transition to a world without Russian oil. And everything indicates that the summit as a whole will serve as a litmus test to see how far the seams that have begun to appear in the common strategy against Putin give way.
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