Yesterday, the ambassadors of the Member States reached an agreement on the twenty-first sanctions package against Russia. It took a month and a half of negotiations among the twenty-seven and several concessions to some national governments to achieve unanimity.
GREECE OBSTRUCTED THE AGREEMENT ON NEW SANCTIONS AGAINST RUSSIA
The last obstacle was Greece, which obtained a derogation for its shipowners who will be able to continue transporting Russian liquefied natural gas to third countries after January 1, 2027. This is a step back compared to what was agreed in October with the nineteenth sanctions package, which provided for a total ban on the purchase and transport of Russian LNG. The derogation applies to contracts concluded before February 24, 2022, and will be reviewed in one year. Shipowners will not be allowed to transport more LNG than in the pre-war period. But for Greek billionaire George Prokopiou, it makes little difference. According to Financial Times calculations, the ships of his group Dynacom Tankers have transported 24 billion euros worth of LNG since the beginning of the war.
THE NATIONAL INTERESTS OF GERMANY AND PORTUGAL
“Another decisive step to tighten pressure on Russia,” said the President of the European Council, António Costa, yesterday after the adoption of the twenty-first sanctions package against Russia. “Our support for Ukraine and for a just and sustainable peace remains unwavering,” Costa added.
Really? In fact, support for Ukraine collapses when small economic or political interests of Member States are at stake. It’s not just the derogation for Greek shipowners. The ban on imports of cod and Alaska pollock was removed from the package due to opposition from Germany, a major producer of frozen fish sticks, and Portugal, a major importer for the national dish bacalhau. The ban on issuing visas to former Russian combatants was turned into a promise to introduce restrictions in the future, because Italy and France do not want to give up the lucrative Russian tourism. Bulgaria managed to remove from the EU blacklist the names of the Moscow Patriarch Kirill and the founder of Lukoil, Vagit Alekperov.
THE PRICE CAP ON RUSSIAN OIL
The main measure of the twenty-first sanctions package against Russia is the maintenance of the price cap on Russian oil at 44 dollars per barrel. The market price adjustment mechanism, which would have raised the “price cap” to about 65 dollars per barrel, will be suspended for one year. The Commission believes that losses for the Kremlin will be about 3.5 billion euros, since European operators will not be able to transport Russian crude above the “price cap.”
The package includes new export restrictions and targets the financial sector and cryptocurrencies. The EU blacklist will be expanded to 218 individuals and entities, including more than one hundred banks and crypto operators, over 40 shadow fleet vessels, and several refineries in Russia and Belarus.
THE TWENTY-SECOND SANCTIONS PACKAGE AFTER THE SUMMER
“This is not the end of sanctions. We are already working on the next steps,” said High Representative Kaja Kallas yesterday after the adoption of the twenty-first sanctions package against Russia. A twenty-second package is expected, probably after the summer break. But faced with increasing difficulties in convincing EU Member States, the Commission might choose to focus on the gaps in the old packages instead of presenting new initiatives.
