In its heaviest steps yet to punish Russia for its conflict in Ukraine, the European Union’s chief executive recommended a phased oil embargo, penalties on its top bank, and a ban on Russian broadcasters from European airwaves on Wednesday.
If member states agree, the EU’s sixth wave of sanctions will be a watershed moment for the world’s largest trading bloc, which is reliant on Russian oil and gas and must find alternative sources just as energy costs are rising.
Reluctance to impose sanctions that will harm both EU and Russian industries has vanished in recent weeks, as Russia’s invasion of Ukraine has resulted in appalling images of slaughter in cities and fears of a renewed offensive in the country’s east.
The president of the EU executive warned Moscow must face consequences, reflecting widespread fury in the West over Russian President Vladimir Putin’s campaign, which Moscow claims is a “special military operation” to counter dangerous nationalists.
“Putin must pay a terrible price for his heinous actions,” European Commission President Ursula von der Leyen said in a speech to the European Parliament in Strasbourg.
“Today, we will propose a ban on all Russian oil entering Europe,” she declared, drawing applause from the audience.
The Commission’s plans include phasing out Russian crude oil and refined products shipments within six months and by the end of 2022. Von der Leyen promised to keep the damage on European economy to a minimum.
Brent crude gained 3% to well than $108 a barrel in early trading.
If agreed upon, the embargo would follow in the footsteps of the United States and the United Kingdom, who have already imposed sanctions to cut off one of Russia’s most important revenue streams, as the West imports more than half of Russia’s oil and petroleum products.
“We’re working to reduce our reliance on Russian oil. Let’s be clear: it won’t be simple because some member nations are heavily reliant on Russian energy, but we must do it “said von der Leyen
The Commission’s recommendations are anticipated to be adopted by ambassadors from the EU’s 27 member states as early as this week, allowing them to become law soon after.
Hungary, on the other hand, has hinted that it may be able to thwart the latest EU sanctions package.
Despite the fact that it and Slovakia will be given till the end of 2023 to wean themselves off Russian oil due to their significant dependency, Budapest claimed the proposal did not spell out how their energy security would be ensured.
“We see no plans or guarantees on how a transition might be managed based on the existing proposals, and how Hungary’s energy security would be ensured,” said Zoltan Kovacs, a spokesman for the Hungarian government.
A progressive embargo on Russian oil, according to Simone Tagliapietra of the Brussels-based Bruegel think group, is perilous.
“In the short term, it may result in high Russian income while having bad effects for the EU and the global economy in terms of increased prices – not to mention the danger of retaliation (by Russia) on natural gas supply,” he said.
Apart from oil, the latest wave of sanctions recommends targeting Russia’s largest bank, Sberbank, as well as several other institutions that have already been shut off from the SWIFT messaging system.
“We went after banks that are systemically important to the Russian financial system and Putin’s ability to wage war,” von der Leyen stated. “This will consolidate Russia’s banking sector’s full isolation from the global system.”
Sberbank did not respond to a request for comment right away. The lender, which pulled out of practically all European markets in March, has previously stated that additional rounds of penalties would have little effect on its operations.
Without naming names, Von der Leyen stated that more high-ranking Russian military officials would face asset freezes and travel bans from the EU, as well as European accountants, consultants, and spin doctors working for Russian firms.
According to officials, state-owned Russian broadcasters RTR-Planeta and R24 would be barred from European airwaves as a result of the latest sanctions.
Von der Leyen also presented a post-conflict recovery plan for Ukraine, claiming that the country will require hundreds of billions of euros in cash to rebuild.
“It will pave the ground for Ukraine’s future integration into the European Union,” von der Leyen predicted.
