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7th Jul 2022

Orbán oil veto to deface EU summit on Ukraine

  • Civilian victims of Russian soldiers in Bucha, Ukraine (Photo: Rodrigo Abd)
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EU leaders will have no good news for Ukraine on the Russia oil ban next week, amid confusion on what Hungary really wants.

"We should not stare at the summit," EU Commission president Ursula von der Leyen told press in Davos on Tuesday (24 May), referring to an extraordinary EU leaders' meeting on Ukraine in Brussels next week.

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"I don't think that this [the Russia oil embargo] will be a topic at the Council that will be decided there", she added.

Von der Leyen formally proposed the oil ban back in 3 May.

It has full-throated German backing let alone clamouring support in central and eastern EU countries.

But billions of oil-euros continue to flow into Russian president Vladimir Putin's war chest, not least because Hungarian prime minister Viktor Orbán has wielded his veto to say No.

Orbán rattled his veto again on Tuesday in a letter, leaked to the FT, to EU summit chair Charles Michel in which he warned it would be "counterproductive" to discuss oil at next week's meeting.

"Solutions first, [Russia] sanctions afterwards," Hungarian justice minister Judit Varga also said in Brussels the same day, referring to solutions to Hungary's objections.

The oil embargo was meant to be the crown jewel in the EU's new sanctions on Russia.

And a special summit on Ukraine with the oil fiasco hanging in the air risks handing a propaganda victory to Russia.

"Seems the EU has come to its limit [on sanctions unity]. It's a pity because energy is the thing that does matter and can affect Putin's evil adventure in Ukraine," Kostiantyn Yelisieiev, Ukraine's former EU ambassador, told EUobserver from Kyiv.

But while it is rare for EU diplomats to give up on pre-summit negotiations a whole week before deadline, that appeared to be the mood in the EU capital.

Orbán's letter to Michel "clogged up the pipes" and "left little room for optimism", one EU diplomat said Tuesday.

"It's starting to look like an intermediary summit, before we get to June", he added.

It was hard to tell whether Orbán wanted more EU money, a free-pass on his abuse of rule of law in Hungary, or if he was delaying sanctions as a favour to Putin, with whom Orbán has friendly ties, the diplomat said.

"Or all of the above," he said.

"I think he [Orbán] wants the EU to unblock recovery funds and/or freeze Article 7 sanctions," a second EU diplomat said, referring to EU sanctions on abuse of rule of law.

"In other words, he wants Brussels to piss off or, at least, pay up — and if those are his expectations, they aren't likely to come true," the diplomat said.

The EU's sixth sanctions package includes a ban on Russia's richest bank as well as more high-profile blacklistings.

Apart from keeping Putin's money flowing, Orbán's veto is also delaying tied-in EU measures designed to help pro-democracy activists in Belarus.

The Hungarian leader has, in the past, routinely blocked EU criticism of Israel and pro-LGBTI statements, while grumbling about EU sanctions on Russia.

But his position on the oil ban is his biggest veto gambit in the Council to date.

Hungary previously indicated it wanted €750mn up front to switch from Russian oil and a further €18bn down the line in long-term reparations.

The EU froze at least €7bn of Hungary's post-pandemic recovery funds in the rule-of-law dispute.

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