Don’t expect the EU to ban Russian gas any time
soon
A cost of living squeeze and a bruising battle over
oil have made EU leaders wary.
BY BARBARA
MOENS
May 31,
2022 7:05 pm
https://www.politico.eu/article/eu-ban-sanctions-russian-gas-oil-orban-ukraine-war/
After a
month of haggling over how to ban Russian oil, only to get a watered-down
compromise that lets pipelines keep flowing, EU sanctions on Vladimir Putin's
energy exports have reached "the end of the road."
That was
the assessment of Belgian Prime Minister Alexander De Croo on Tuesday, summing
up the tortuous negotiations which ended in a fudge that let Hungary off the
hook.
The logical
next step in tightening pressure on Moscow would be to ban Russian gas. But for
De Croo and others, that would risk hurting the EU more than Putin. Their
reluctance is likely to harden further after new economic statistics released Tuesday
showed inflation in the eurozone had soared to 8.1 percent in May, and any
further supply shocks from Russia would almost certainly send household energy
bills even higher.
While the
bloc has committed to ending its reliance on Russian fossil fuels, French
President Emmanuel Macron did not sound in any hurry. "I think nothing
should be ruled out because nobody can tell how things will evolve, how the war
will evolve," Macron told reporters at the European Council in Brussels
when asked about banning Russian gas.
One EU
diplomat privately described the oil sanctions as a tipping point: “Of course,
things can change if something drastic would change on the ground in Ukraine.
But today, gas is not an option."
Yet there
is a political price to pay from calling time on energy sanctions, too.
For one
thing, giving up on targeting gas will undoubtedly feel like abandonment to
Ukrainian President Volodymyr Zelenskyy. In a speech via videoconference to the
European Council summit on Monday, Zelenskyy had pleaded for a ban on “all”
Russian energy sources. Since the war started, EU countries have spent tens of
billions of euros on importing Russian gas, oil and coal — revenue that helps
Putin pay for his invasion of Ukraine.
Those
payments will continue. While coal is being phased out, the partial oil ban
will take months to phase in. Even when deliveries by ship are eventually
prohibited, pipeline supplies will keep flowing, under the terms of the
exemption secured by Hungary's Prime Minister Viktor Orbán.
To get
Hungary and other landlocked countries on board with the oil embargo, EU
leaders tactically avoided in-depth discussions on the next sanctions package
at their meeting on Monday. There was also no mention about next steps in the
summit conclusions.
Ukraine's
staunchest supporters, especially in the Baltic countries, want the EU to
continue ramping up the penalties until Putin is vanquished. They are still
insisting gas should be next, hoping the opposition will eventually abate.
“The
stronger the sanctions, the quicker the war will end,” Latvia’s Prime Minister
Krišjānis Kariņš said on Tuesday. “Three months after the start of the war, we
have gone sanction after sanction after sanction, ever tighter ever tighter,
notwithstanding the fact that the sanctions also negatively affect us, European
Union's member states.”
Hurting
Europe
Estonian
Prime Minister Kaja Kallas also wants gas included in the EU's next round of
sanctions. But she acknowledged this was unlikely after the drawn-out
negotiations over oil. “Gas is of course much more difficult than oil already
was,” she said.
“All the
next sanctions will be more difficult because so far they have only hurt
Russians,” Kallas added. “But now they’re also having effects on Europeans, and
that’s why it’s much more politically difficult.”
Europe is
far more reliant on Russia for gas — 40 percent of its gas supply — than coal
or oil. Economic powerhouses like Germany and Italy have already warned over
the impact if Brussels were to suddenly end Russian gas imports.
Western
European leaders, some of whom have already begun voicing exhaustion with the
war or even hinted that Ukraine should make territorial concessions to achieve
a cease-fire, seem increasingly reluctant to take additional painful steps.
Austrian
Chancellor Karl Nehammer, whose country sources around 80 percent of natural
gas from Russia, said the gas embargo will not be discussed in a next sanctions
package.
While
Germany is already reducing its reliance on Russian gas, it’s still heavily
reliant on Moscow to keep its energy supply flowing. A wide range of landlocked
countries like the Czech Republic, Hungary and Slovakia would also quickly run
into trouble without Russian gas.
Apart from
the economic concerns, there are the politics of the process of designing
sanctions packages in Brussels. European Commission President Ursula von der
Leyen is likely to be wary of getting her fingers burned on a gas embargo,
after she struggled to get the oil ban through.
It took 26
days since she first proposed a "complete ban" on all Russian oil
imports to deliver a vaguely worded outline agreement on an embargo that is
still only partial and won't make an impact for months. The wait before the EU
cuts out Russian gas looks set to be a lot longer.
Giorgio
Leali, Jacopo Barigazzi, David M. Herszenhorn, Leonie Kijewski, Lili Bayer and
Camille Gijs contributed reporting.
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