Despite last-minute haggling, before a summit got underway in Brussels on Monday, European Union leaders again failed to agree on a Russian oil import ban, exposing a struggle to widen sanctions on Moscow over its war in Ukraine as the economic risk for Europe grows.
Ukrainian President Volodymyr Zelenskyy addressed the bloc's 27 leaders by video in a 10 minute-message and urged them to remain united and quickly adopt a new package of measures to stop the Kremlin’s “war machine,” according to a senior EU diplomat.
Zelenskyy has repeatedly demanded that the EU target Russia’s lucrative energy sector and deprive Moscow of billions of dollars each day in supply payments.
The leaders of the EU countries will agree in principle to an oil embargo, a draft of their summit conclusions showed, but they will leave the practical details and hard decisions until later.
The EU gets about 40% of its natural gas and 25% of its oil from Russia, and Ukraine says those energy imports are funding Russia's war on its neighbor.
The bloc has rolled out five packages of sanctions against Russia since the conflict began more than three months ago, demonstrating uncharacteristic speed and unity given the complexity of the measures.
But an agreement on oil sanctions has proved elusive for weeks because so many countries depend on Russian crude.
But Hungary is leading a group of EU countries — along with Slovakia, the Czech Republic and Bulgaria — that rely heavily on Russian oil and can't afford to take such steps. Hungary gets more than 60% of its oil from Russia and 85% of its natural gas.
"There is no compromise for this moment at all," said Hungarian Prime Minister Viktor Orban, as he arrived for the two-day summit.
European Commission President Ursula von der Leyen, who proposed the latest package of sanctions at the start of May, agreed: "We're not there yet."
And she all but ruled out the prospect of a breakthrough at this week’s summit, saying as she arrived “my expectations are low that it will be solved in the next 48 hours.”
Czech Prime Minister Petr Fiala suggested that delaying oil sanctions on Russia could be a solution.
“We’re ready to get rid of our dependence on Russia’s energy sources... but we’re not able to do it in the short term,” Fiala said.
There is broad agreement on the rest of the package, including cutting Russia's biggest bank, Sberbank, from the SWIFT messaging system, banning Russian broadcasters from the EU and adding people to a list whose assets are frozen.
But a senior European Commission official said the whole package, including oil, should be approved in one go.
German Chancellor Olaf Scholz left open the possibility of an EU agreement being struck at the summit, calling talks on the matter “good and constructive” and saying the bloc is determined to remain united.
“Everything that I hear makes it sound as if a consensus could be reached and, sooner or later, it will be,” Scholz told reporters.
Estonian Prime Minister Kaja Kallas said it was more realistic to expect an agreement on an oil embargo in a few weeks, hopefully at the EU's next summit on June 23-24.
Some complained harshly over the lack of a deal.
“We’re getting a little bogged down in all of the details and we're forgetting the big picture,” Latvian Prime Minister Krisjanis Karins said. “It’s only money. The Ukrainians are paying with their lives,”
Zelensky urged the EU to end internal “quarrels” that he said only help Moscow.
“All quarrels in Europe must end, internal disputes that only encourage Russia to put more and more pressure on you,” he said.
“It is time for you to be not separate, not fragments, but one whole.”
The draft text seen by Reuters – which may still be revised again – would confirm that the sixth package of EU sanctions will include a ban on seaborne oil imports, with pipeline oil supplied to landlocked Hungary, Slovakia and the Czech Republic to be sanctioned at some later point.
However, the leaders will ask diplomats and ministers to finalize an agreement that would also ensure fair competition between those still getting Russian oil and those cutoff.
Orban said Hungary would be ready to back a deal “if there are solutions for the Hungarian energy supply security, we haven't got that now.”
Hungary receives Russian oil via a pipeline that runs through Ukraine.
One tangible outcome of the summit should, however, be an agreement on a package of EU loans worth 9 billion euros ($9.7 billion), with a small component of grants to cover part of the interest, for Ukraine to keep its government going and pay wages for about two months.
Leaders will also back the creation of an international fund to rebuild Ukraine after the war, with details to be decided later, and will touch on the legally fraught question of confiscating frozen Russian assets for that purpose.
The leaders will pledge to accelerate work to help Ukraine move its grain out of the country to global buyers via rail and truck as the Russian navy is blocking the usual sea routes and taking steps to become more independent of Russian energy faster.
The draft showed leaders would explore ways to curb rising energy prices, including the feasibility of introducing temporary price caps, to cut red tape on rolling out renewable sources of energy and invest in connecting national energy networks across borders to better help each other.
