The European Union's coordination on sanctions against Russia is wavering amid a string of member states' demands for exceptions. As negotiations on the 21st sanctions package targeting Russia face setbacks due to opposition from member states prioritizing the protection of their corporations and industries, some say the EU's sanctions strategy against Russia, maintained since the start of the Russia-Ukraine war, has reached its limits.
According to the Financial Times (FT) on the 19th (local time), EU member states are demanding exceptions or opposing some measures in the 21st sanctions package against Russia prepared by the European Commission, citing the impact on their own corporations and industries. Because EU sanctions are adopted by unanimity among the 27 member states, a single country's opposition can block them.
The new package includes additional sanctions targeting Russian exports and the financial system, as well as measures to uphold the price cap on Russian crude. But with member states' interests clashing, four days of ambassador-level talks in Brussels last week ended without agreement, and the negotiations remain stalled.
Greece is pushing back the hardest. Greece is withholding consent to the entire package, arguing that restricting the transport of Russian liquefied natural gas (LNG) to third countries could severely hit its shipping industry. According to the FT, Greek shipping company Dynagas has transported more than 30 million tons (t) of LNG from Russia's Arctic Yamal project since the outbreak of the Russia-Ukraine war. The FT estimated the cargo's value at more than $24 billion (about 35 trillion won).
Germany and Portugal opposed the ban on imports of Russian seafood to protect their domestic seafood processing industries. France and Italy, where tourism is a major sector, asked for a relaxation of the EU visa ban on Russian war veterans, and Austria revived its previous demand to unlock about 2 billion euros (about 3.4 trillion won) in frozen Russian assets to offset losses from fines imposed by Russian authorities on its Raiffeisen Bank.
EU diplomats involved in the talks voiced concern that member states are increasingly prioritizing their own economic interests over the shared goal of supporting Ukraine. According to the FT, one diplomat said, "The moral imperative is losing strength," adding, "Governments agree on tough rhetoric against Russia and on solidarity, but once negotiations begin, that stance disappears." Another diplomat said, "If every member state demands exceptions and loopholes, the (Russia) sanctions package will end up an empty shell."
The EU has implemented sanctions against Russia 20 times since the invasion of Ukraine. But opposition from member states appears far stronger in negotiations on the 21st package. Jakob Kirkegaard, a senior fellow at the Brussels think tank Bruegel, said, "Sanctions against Russia are nearing a de facto peak," adding, "From the perspective of national leaders, they now perceive their core assets to be at risk."
The EU is seeking a compromise that maintains economic pressure on Russia while minimizing damage to member states' industries. But with member states' interests sharply diverging, the 21st sanctions package talks are expected to face prolonged growing pains for the time being.