The EU moved swiftly to hit Russia with sanctions but now..
There is a clear reason why, despite its dislike for Russia, the European Union is not shutting down Russia’s gas pipeline.
The West reacted quickly to punish Russia’s economy following its invasion of Ukraine, giving the appearance that Russia will collapse within days as the sanctions pile up.
However, because this is not the case, and Russia is closing in on the remaining big cities, including Kiev, the EU is in a pickle.
The most decisive step taken by the Western countries was to impose sanctions on Russia’s central bank, blocking Moscow from gaining access to a significant portion of the $643 billion in reserves collected over the preceding decade.
How long will the west be able to keep its hands on Russia’s money? For as long as they want if we take into consideration the previous sanctions the West imposed on its ‘enemies’ such as Iraq, Iran, Afghanistan and Russia in 2014.
What will the EU have to pay in the end as a result of its hasty actions because the sanctions were imposed without regard for the eventual result?
Russia’s oil and gas
For now, the EU is not playing too hard with the Russians while a division in the EU’s rank on how to deal with the sanctions on Russian oil and gas is unravelling.
On top of that, other countries are still buying Russian oil and gas. This is thwarting, to some extent, the expected results of the swift and not well-thought sanctions against Moscow.
On the other hand, Russia says it has enough money to fight the war in Ukraine, winning it or losing does not matter. But of course, Moscow wants to win. And it has enough reserves contain the effects of the Western sanctions for at least a few years.
Thus for some countries, stopping Russian oil or gas from flowing means losing more than expected. A complete ban on Russian energy sources will cause a massive increase in prices that no one really want to see happening.
Hungary’s problems
Creating a split in the EU, Hungary said its energy supply is not an “ideological question.” Thus it declined to back potential embargoes on Russian oil.
Hungary’s top diplomat has stated that his nation would not support further economic penalties against Russian energy companies, noting that such a move may backfire. Peter Szijjarto also cautioned that suggestions for a no-fly zone over Ukraine risk escalating into a bigger regional confrontation.
“An agreement on possible EU sanctions against Russian energy supplies or their interruption will most likely not be reached,” he said, adding that, “We will not support any sanctions that could pose a risk to energy supplies to Hungary.”
“Some countries are dependent on Russian energy supplies. We don’t do this for fun. Energy supply is not a philosophical or ideological question, but a physical, mathematical one,” he says.
The Irish Foreign Minister Simon Coveney’s suggestion that the EU should move against Russia’s energy sector met with resistance from Hungary, Germany and the Netherlands, according to Reuters.
“The question of an oil embargo is not a question of whether we want or don’t want [it], but a question of how much we depend on oil,” Berlin’s foreign minister, Annalena Baerbock, told reporters, noting that some EU states cannot simply “stop the oil imports from one day to the other.”
Szijjarto also expressed reservations about other options mooted by EU and NATO countries in recent weeks, such as suggestions for a no-fly zone over Ukraine and an armed ‘peacekeeping’ mission to halt conflict there, saying those problems needed to be examined. “clearly” as there is a “new war risk.”
“We must avoid that. Hungary’s interest is clear: Hungary wants to stay out of this war, we will stick to NATO’s common position and reject proposals that risk either an air war or an extended war on the ground,” he adds.
Russian hydrocarbons
Despite the political talks and the pressure on the media in the West to publish stories that sound like the EU has already blocked Russian hydrocarbons, this is not the case. It is easier said than done and the truth is as follows:
Imposing a ban on Russian hydrocarbons will be a terrible blow to Moscow because the EU imports 40 per cent of its gas needs from Russia. It also imports 30 per cent of its oil from Russia. Cutting that off in one go will hurt so badly that it might turn against them, instead.
It might result in demonstrations against their own governments thus turning the war sentiment against the EU itself. The impression given to the rest of the world is that the EU has already banned Russian products. And that Russia will collapse soon without its exports to the EU.
We are made to believe that the Russians are finished and will have to accept ‘defeat’ in Ukraine and pull out their troops. But it’s going to be one month since the Russians invaded Ukraine and they are still there, tightening the screw on the big cities and carpet bombing some.
The EU has however announced its intentions to limit Russian gas imports by two-thirds within a year, with a longer-term objective of terminating Russian energy imports by 2030. That is they are not able to cut Russia off completely.
By 2030, Russia would have either left Ukraine or turned it into a neutral zone where Nato, the US and the EU have no special say.
It is all about interests
IIn the end, it is all about the selfish interest of the EU, one would think, and not the interest of Ukraine. Why sacrifice the entire EU for a country that is not even a member?
The EU is afraid that the price of oil will hit $300 a barrel if the EU imposes an embargo on Russian energy exports.
We all know that a rejection of Russian oil would lead to catastrophic consequences for the global market. But at the onset of the Russian invasion, the EU did not think clearly.
But the EU is not giving up on its attempt to force other countries to agree to a ban on Russian imports. They are pressing Poland and Lithuania to add to the voice in favour of such a move.