Blocking oil ban shows EU capitals trying to limit pain to help Ukraine – POLITICO

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For many European leaders, soaring inflation, especially in the cost of energy and food, is proving to be a more frightening foe than Russian President Vladimir Putin.

The proof is that for the last 25 days – and more – they have failed to reach an agreement on a ban on Russian oil imports, which would drive up consumer prices even more.

Diplomats in Brussels continued to struggle on Sunday to find a last-ditch compromise ahead of a European Council summit. Once again they fell short. A European Commission official said a deal was expected later this week, but other officials and diplomats said there was a collective lack of acute urgency that reflected deep ambivalence in many capitals to about the oil embargo.

Even as EU heads of state and government arrive at their summit free from embarrassment of whispers of a tentative deal, the nearly month-long delay in passing the oil ban – and the excruciating process of crafting exemptions and compensation for recalcitrant nations – has provided a stark illustration of how leaders rank the threats they now face.

Putin’s armies may or may not destroy Ukraine, but growing voter anger over soaring consumer prices poses a much more immediate danger to getting European politicians elected.

And while preserving Ukraine’s territorial integrity is a widely recognized priority, it has not been as imperative in recent days as preserving the “level playing field” of the EU’s own single market, which would be skewed by a compromise plan to ban Russian oil delivered by tankers while allowing oil to flow by pipeline.

Some countries heavily dependent on oil transported by sea, as well as those with large oil transport businesses, initially resisted the exception for oil by pipeline, which, like other exemptions, is meant to be temporary in nature. .

And even on Sunday evening, some Western European countries complained bitterly that the pipeline exemption would unfairly benefit countries like Germany and Poland that are unlikely to run out of fuel, giving them an unfair economic advantage.

The EU’s failure to agree on cutting one of the most vital sources of revenue used by the Kremlin to fund the war came as Russian forces slowly but surely advance in their bid to conquer all the eastern region of Donbass in Ukraine. Ukrainian towns and villages are razed to the ground as EU officials bicker over how to distribute the nearly 2 billion euros earmarked for the energy transition and countries accuse each other of exploiting war for purposes economic.

As Ukraine’s military suffers heavy casualties and innocent civilians die every day, Ukrainian officials are quietly bubbling with outrage, especially at suggestions from some EU capitals, including Paris and Rome, that Kyiv should be prepared to make concessions, even cede territory, to end the war. French President Emmanuel Macron even spoke of the need to avoid any “humiliation” of Russia.

“It’s hypocrisy to a large extent – it’s an internal thing,” said a senior Ukrainian diplomat.

Berlin and many other major European cities could face a significant rise in oil prices as the EU seeks to ban imports of crude oil from Russia | Sean Gallup/Getty Images

Ukrainians mostly refrain from overt public denunciations of Western partners providing crucial weapons and billions in emergency economic aid.

Privately, however, they are livid and deflated – fearful that the oil blockage will mean further disappointments when it comes to sanctioning Russian gas and, in particular, when it comes to the hope of the Ukraine to be officially nominated as an EU candidate country to join the European Union. June Council Summit.

The top Ukrainian diplomat said the EU should return to its fundamental roots and principles – not only by cutting off all Russian energy revenue by banning oil and gas, but also by quickly granting candidate status to Ukraine. Instead, however, the energy embargo is stalled, and countries like the Netherlands and France are trying to lower expectations of any positive decision on membership.

“Essentially what we are doing is now taking the EU back to where it started as a peace project,” said the top Ukrainian diplomat. “So to generate peace, to generate security, in a broader sense, they [should] take responsability.”

So far, however, it is unclear whether EU leaders are ready to take on such a responsibility. This is despite evidence of wartime atrocities committed by Russian forces and Putin’s historic record of never settling any post-Soviet conflict, but instead used military force and political extortion, such as deliverance Russian passports in the occupied territories of Ukraine, Georgia and Moldova, to expand its sphere of influence.

Always work towards a deal

In Brussels, diplomats said Sunday night they would work through the night and meet again Monday morning in hopes of reaching a deal. But several said the technical complexity of granting exemptions and compensation would likely require several additional days of work.

Some member countries remain obsessed with the possibility that Germany and Poland will gain economic advantage from an exemption for the pipeline, as there is no risk that their supplies will be cut or dangerously low. Hungary, on the other hand, relies on a pipeline that crosses Ukraine and is therefore inherently susceptible to damage or blockage.

While Hungarian Prime Minister Viktor Orbán has posed the biggest hurdle to an oil sanctions deal – demanding more time to phase in the oil embargo as well as significant financial compensation to help transition to sources of alternative energy – many other countries are quietly enjoying its blocking, according to many EU officials and diplomats.

The oil embargo is part of a sixth round of sanctions against Russia since Putin began his failed bid to take Kyiv on February 24, and many EU officials are quick to note the speed and success of the achievement of the necessary unity on the previous measures.

Indeed, the prospect of finding alternative energy supplies after decades of reliance on Russia was long expected to be difficult, and the process is made even more painful given that prices Consumer prices were soaring regardless of the war – due to a series of economic disruptions, including supply chain problems, which have arisen from the coronavirus pandemic.

But EU leaders have also found a variety of ways to avoid taking painful action. The sixth package also includes measures to cut Sberbank, Russia’s largest consumer bank, from the international payment system SWIFT, as well as sanctions against military officials responsible for atrocities in Bucha and other Ukrainian cities, and against Patriarch Kirill, the head of the Russian Orthodox Church. who supported Putin’s war.

EU countries could have easily pushed through the other components of the Sixth Package without waiting for oil sanctions, but insisted on keeping it together, delaying all sanctions. EU countries could also have individually decided to stop buying Russian oil, eliminating any need for a messy debate.

“We can collectively say that we will finish using Russian oil by the end of 2022,” a senior EU diplomat said, emphasizing the point on Thursday evening. “So you know that’s one way to go about it. In fact, if we had all concluded that, then you don’t even need a sanction because a decision has already been made.”

But rather than act decisively, member countries have continued to argue, including over whether the conclusions of the upcoming European Council summit should contain language calling for a ceasefire in Ukraine. While every capital wants peace, there are sharp disagreements over whether to suggest a ceasefire would be acceptable without a full Russian withdrawal.

A second senior EU diplomat defended the bloc’s record of responding to the war, saying European countries were tackling all the tough issues and journalists were too focused on sanctions.

“EU [and its member states] let’s not lose sight of the big picture,” the diplomat said.. “We are constantly working on different particularities linked to the war: financial support for [Ukraine]food security, support for refugees, etc. It is also clearly seen in the [and ambassadors’] agenda. So maybe the media finds sanctions more attractive to follow.

However, other diplomats made no attempt to hide the fact that the postponement of the oil embargo was convenient for some countries, and also helped to postpone a more complex discussion on the Russian gas ban.

“Gas is going to be even more difficult,” the EU’s top diplomat said, adding that the complexities of the oil embargo have yet to be resolved. “If we want an exclusion for one or two Member States for specific reasons of security of supply, we must ensure that legally…we will do it in such a way that we do not have more damage caused to the market interior than we intended to do,” the diplomat said. “So it has to be done very carefully. And it’s a technical, legalistic question, and we’re still working on it.”

Lili Bayer contributed reporting.

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