Wednesday

8th Feb 2023

EU could soften Russian oil ban plan as summit kicks off

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EU leaders are gathering in Brussels on Monday (30 May) afternoon to discuss the war in Ukraine, energy, defence and food security.

Leaders are, however, unlikely to unblock Hungary's opposition to a sixth package of sanctions against Russia, including introducing an oil embargo by the end of the year.

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EU ambassadors have been meeting on Sunday during the day and evening and are expected to get together again on Monday morning to try to reach a compromise.

Hungary, among other countries, is highly dependent on Russian oil, and its prime minister Viktor Orbán, seen as the closest EU ally of Russian president Vladimir Putin, warned in a letter last week not to put the issue on the agenda, because there will be no agreement.

He wrote to the European Council's president, Charles Michel, saying his country could not support the sanctions without more detail on the EU financing available to help Budapest wean itself off Russian oil.

"It would only highlight our internal divisions without offering a realistic chance to resolve differences," Orbán wrote.

Hungary has been arguing that it needs five years and billions of euros to upgrade its refineries.

EU officials have been working toward what they hope could be a compromise, essentially watering down the ban on Russian oil imports.

The idea is to ban Russian oil arriving in tankers but allow pipeline imports, a proposal that would allow Hungary, Slovakia and the Czech Republic to continue being supplied via the Soviet-era Druzhba pipeline that runs through Ukraine.

A senior EU official argued it would still mean a ban on the two-thirds of Russian oil embargo, and other member states have been open to time-limited carve outs for countries highly dependent on Russian energy.

However, other member states argue that it would give unfair advantage to countries importing via pipelines.

German economy minister Robert Habeck on Sunday expressed fears that the EU's unity was "starting to crumble" ahead of a summit on the Russian oil embargo, Reuters reported.

"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 said.

The EU Commission proposed the oil ban more than three weeks ago, and commission chief Ursula von der Leyen has already travelled to Budapest to try to soften Orbán's red line, so far in vain.

EU leaders will be joined by Ukraine's president Volodymyr Zelenskiy via video link, who has already criticised the bloc last week for its failure to agree the oil embargo.

The leaders are also expected to discuss the commission's proposals on how the EU can move away from Russian fossil fuels in its so-called RePowerEU plan.

They will also talk about a possible price cap on energy prices, as a way of controlling the cost of consumers.

EU leaders are also set to debate liquidity aid Ukraine to help pay salaries in the country, and talk about how to help take grains out of Ukraine through land routes.

Leaders will also discuss food security, joined by Africa Union chairperson Macky Sall via video link, and talk about defence plans the commission has put forward to jointy invest in military capabilities.

Hungary wants EU billions for Russia oil-ban deal

Hungary is continuing to block an EU oil embargo on Russia, but there is optimism its objections can soon be overcome — perhaps within a few days to "a week or two", according to some EU foreign ministers.

EU lobbies Hungary to break oil sanctions deadlock

After the EU Commission president Ursula von der Leyen's Budapest trip, Hungary suggested it wants EU funds to offset the extra costs from receiving different oil sources, and the increased energy prices the planned Russian oil embargo entails.

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