The terrifying images that have come out of Ukraine in recent days, with dozens of civilians killed in cold blood and abandoned on the streets, have led the European Commission to launch the first sanctions against Russian energy on Tuesday. At the moment it will be a ban on coal imports worth 4,000 million euros per year, but it is a first step that opens the door to hitting oil and gas, the real machines for generating money in a juicy sector that adds two thirds of the imports from Russia of the community bloc.
The Commission’s proposal, which still needs to have the approval of the Twenty-seven, comes after a tug-of-war between the capitals to attack a very sensitive area, which countries like Germany and Austria resisted. The pressure of recent days, with the corpses of Bucha and other cities on the outskirts of kyiv, in Ukraine, still fresh in memory, has ended up breaking down the resistance.
It remains unknown whether Hungary, whose recently re-elected government is close to the Kremlin, will oppose the decision: until now it had expressed reluctance to include energy in the retaliation. But the Community Executive has been negotiating and taking the temperature of the community partners for weeks, and everything suggests that it will have calibrated the margin it has for the measures to go ahead without risking finding a veto by any Member State.
“Today we propose to take a further step in our sanctions”, assured this Tuesday the president of the Community Executive, Ursula von der Leyen, when announcing the proposal. During the speech she recalled “the appalling images of Bucha and other areas from which Russian troops have recently left.” That, she has assured, has been the engine that has launched this fifth package of retaliation. “We’ll make them wider and sharper. So that they cut off the Russian economy even more”, he added before announcing that the flow of coal from Russia to the EU is cut off, but that this is only a first stone on the road: “We are working on additional sanctions, even on the oil imports”, he settled.
The nine sanctions package, which is announced three weeks after the last one was approved, on March 15, also touches more sectors and its main lines have been advanced by Von der Leyen and the head of European diplomacy, Josep Borrell, the same tandem of European leaders that has announced that it intends to travel to kyiv this week.
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Closure of ports to Russian ships
The proposal of the Community Executive includes the total prohibition of transactions to four Russian banks that add up to almost a fifth of the market share, including VTB (the second largest in Russia); EU ports are also closed to all Russian or Russian-operated ships (except for essential products in sectors such as food, humanitarian aid or energy); imports of specific and remote-controlled goods, worth 10,000 million euros, are prohibited in areas where Russia is “vulnerable”, in the words of Von der Leyen, such as quantum computers and advanced semiconductors.
Borrell explained that the Brussels proposal also includes “dozens” of new names of people and companies that will be added to the already extensive black list of the EU, which to date incorporates 877 people and 62 entities subject to the freezing of assets and EU travel ban; Among them are the Russian president, Vladimir Putin, and his foreign minister, Sergei Lavrov (who have not been prohibited from traveling to the EU to leave a possible diplomatic channel open).
“The goal of our sanctions is to stop the unscrupulous, inhumane and aggressive behavior of Russian troops and to make it clear to decision-makers in the Kremlin that illegal aggression comes with a huge cost,” Borrell stressed.
The blow to oil, if it comes in the future, would have devastating effects on the coffers of Vladimir Putin’s regime. It is the main energy item of EU imports from Russia: it amounts to 42,000 million euros per year, 10 times more than coal, according to figures from the Center for Research on Energy and Clean Air, and even higher than gas, which reaches a value of 28,400 million and on which the EU is, however, more dependent.
The community bloc needs to import 90% of the gas it consumes, of which Russia provides more than 40%, according to data from the Commission. In addition, 27% of oil imports and 46% of coal imports also come from the Eurasian giant. In 2021, energy added 62% of total imports from the Eurasian neighbor to the Twenty-seven, according to figures from Eurostat, the EU’s statistical office.
One of the unknowns that are now open is the possible reaction of Russia to the sanctions. A month ago, when the possibility of closing the oil tap flowing to the EU was raised, he warned that he could fight back by closing one of his main gas pipelines to Germany, the Nord Stream 1.
Borrell also announced during his appearance that he has decided to designate various officials of Russia’s permanent mission to the EU persona non grata “for engaging in activities contrary to their diplomatic status.” The announcement comes after several capitals, such as Paris, Berlin and Spain, have announced this Monday and Tuesday the expulsion of dozens of members of the diplomatic staff.