European Union leaders gathered on Monday in a new show of solidarity with Ukraine, but divisions over whether to target Russian oil in a new series of sanctions exposed the limits of how far the bloc can go to help the war-torn country.
Ukrainian president Volodymyr Zelenskiy addressed the bloc’s 27 leaders in Brussels by video in a 10 minute-message, and urged them to remain united and quickly adopt a new package of measures to stop the Kremlin’s “war machine”, according to a senior EU diplomat.
Mr Zelenskiy has repeatedly demanded that the EU target Russia’s lucrative energy sector and deprive Moscow of billions of dollars each day in supply payments.
The EU gets about 40 per cent of its natural gas and 25 per cent of its oil from Russia, and Ukraine says those energy imports are funding Russia’s war on its neighbour.
But Hungary is leading a group of EU countries, along with Slovakia, the Czech Republic and Bulgaria, that rely heavily on Russian oil and cannot afford to take such steps.
Hungary gets more than 60 per cent of its oil from Russia and 85 per cent of its natural gas.
Russian state gas giant Gazprom confirmed on Monday it will halt gas supplies to a Dutch gas trader from Tuesday due to its refusal to pay for deliveries in roubles, a requirement to European nations Russian president Vladimir Putin put forward earlier this year.
GasTerra, based in the northern Dutch city of Groningen, said the move means Gazprom will not deliver some two billion cubic metres of gas through to October 1, the date the supply contract ends.
According to the senior EU diplomat, Mr Zelenskiy reminded leaders of the atrocities going on in his country, including the death of civilians and children, telling them “it is crucial that sanctions are adopted as soon as possible”.
But finding an agreement on an EU oil embargo has so far proved to be a tall order.
Hungarian prime minister Viktor Orban was adamant on his arrival in Brussels that a deal was not in sight, while Czech prime minister Petr Fiala suggested that delaying oil sanctions on Russia could be a solution.
“We’re ready to get rid of our dependence on Russia’s energy sources … but we’re not able to do it in a short term,” Mr Fiala said.
A meeting of ambassadors just before the summit spurred some hope that a compromise could be reached.
According to several diplomats, leaders will try to reach a deal for an EU embargo on Russian seaborne oil by the end of the year, that would cover more than two-third of oil imports from Russia.
Mr Orban said he is ready to support the sixth round of sanctions if Hungary’s security of oil supplies is guaranteed. Hungary and Slovakia depend on Russian oil that comes through the Soviet-era Druzhba pipeline.
The EU has already imposed five rounds of sanctions on Russia over its war in Ukraine. The bloc has targeted more than 1,000 people, including Russian president Vladimir Putin and top government officials, as well as pro-Kremlin oligarchs, banks, the coal sector and more.
A sixth package of sanctions against Russia was announced on May 4th, but the holdup over oil is embarrassing the bloc, which has been forced to scale down its ambitions.
"My call is very clear to all EU countries:
We have one key to success and this is solidarity with Ukraine and unity of the European Union".
Doorstep by President @vonderleyen ahead of special #EUCO meeting. pic.twitter.com/O0VKFw0GDk— European Commission 🇪🇺 (@EU_Commission) May 30, 2022
When European Commission president Ursula von der Leyen proposed the package, the initial aim was to phase out imports of crude oil within six months and refined products by the end of the year.
The problem with the new possible compromise of hitting sea-transported Russian oil is that countries like Belgium, Germany and the Netherlands, that are most reliant on that form, would suffer a surge in oil prices, distorting competition because Hungary would still be purchasing cheaper Russian oil.
Mr Orban said: “The pipeline solution is not bad. It’s a good approach. But we need the guarantee that in the case of an accident with the pipeline rushing through Ukraine, we have to have the right to get Russian oil from other sources.”
German chancellor Olaf Scholz left open the possibility of an EU agreement being struck at the summit, calling talks on the matter “good and constructive” and saying the bloc is determined to remain united.
“Everything that I hear makes it sound as if a consensus could be reached and, sooner or later, it will be,” Mr Scholz told reporters.
Ms Von der Leyen all but ruled out the prospect of a breakthrough at this week’s summit, saying as she arrived “my expectations are low that it will be solved in the next 48 hours”.
Latvian prime minister Krisjanis Karins urged his EU counterparts to get over their differences on oil, saying that member countries are “getting a little bogged down in all of the details and we’re forgetting the big picture”.
“It’s only money, and Ukrainians are paying with their lives,” he said. “Only when Russia is defeated can we in Europe feel safe.”
If leaders manage to adopt the sanctions, the package will also include an asset freeze and travel ban on individuals and Russia’s biggest bank, Sberbank, will be excluded from the major global system for financial transfers.
The EU has already banned several smaller Russian banks from Swift. Three big Russian state-owned broadcasters will also be prevented from distributing their content in the EU.
The two-day summit will also focus on continued EU financial support to Ukraine and on military help and war crimes investigations.
The issue of food security will be on the table on Tuesday, with the leaders set to encourage their governments to speed up work on “solidarity lanes” to help Ukraine export grain and other produce.
Some protesters gathered outside EU buildings on Monday before the summit, holding signs like “No to Russian oil and gas.”
