LONDON (Financial Times) - Europe’s unity on sanctions against Russia is “starting to crumble”, Germany’s economy minister has warned as diplomats highlight continued divisions over a package of sanctions set to be discussed by member states on Monday.
Robert Habeck spoke as EU ambassadors meeting in Brussels failed to agree on the bloc’s latest package of sanctions against Moscow, including a plan to stop imports of Russian oil which Hungary has been blocking for weeks.
Diplomats had hoped to agree on measures to put to EU leaders who are due to start a two-day summit on Monday.
“After Russia’s attack on Ukraine, we saw what can happen when Europe stands united. With a view to the summit tomorrow, let’s hope it continues like this. But it is already starting to crumble and crumble again,” Habeck, who is also deputy chancellor, told reporters in Germany on Sunday.
His comments underline the EU’s difficulties in finding a way to extend punishments on Moscow for its war on Ukraine while not affecting parts of the European economy that rely heavily on deliveries of Russian oil and gas.
“Europe is still a huge economic area with incredible economic power. And when it stands united, it can use that power,” Habeck said at the opening of a trade fair.
EU diplomats tried to unite on a compromise plan to impose an embargo on Russian seaborne oil purchases and to exempt imports via pipeline, according to three EU diplomats. That would cover about two-thirds of Europe’s imports of Russian oil but avoiding hitting oil that flows to Hungary and other countries, including Germany.
The potential solution is seen as a way to solve the concerns over security of oil supplies that have been aired by Hungary, Slovakia and the Czech Republic.
“The issues are the same, but the way we are trying to solve it is different,” said a senior EU diplomat, who added it could take another few weeks until a final agreement is reached.
EU diplomats are scheduled to meet again on Monday morning before a European Council meeting in a last-ditch attempt to avoid an acrimonious disagreement during the summit.
Some officials are concerned that treating Russian crude deliveries differently depending upon how they enter the bloc could introduce distortions to the oil market. “Many countries have made the point that this is such a complicated economic sector, that we have to be careful we preserve the level playing field,” said an EU diplomat with direct knowledge of the talks. “The legal aspects need fine-tuning, so it may take some more time,” the diplomat said.
Among the issues still to be ironed out are technical adjustments needed for central European refineries so they can handle different supplies, as well as construction and financing of alternative oil pipelines so that all Russian oil can be subjected to an embargo at a later stage.
The sanctions package being discussed is the sixth put forward by Brussels since the invasion began in February. The EU has already implemented sanctions on coal but has made it possible for countries to continue to buy gas from Moscow.