Europe pays every day Russia, by gas and oil imports, more than 800 million euros, nearly 300,000 million euros per year. Enough to finance a few wars.
The European sanctions against Moscow, in particular economic, such as the freezing of more than 300,000 million euros in assets of its Central Bank, harm the Russian economybut the damage does not seem sufficient to change President Vladimir Putin’s mind.
The Europeans are gone a penalty which would bring Russia to its knees economically, enforce a near-total trade blockade including a ban on the import of Russian gas, oil and coal into Europe.
The economic coup in Moscow that would be hugebut it would also be a considerable blow for some European countriesespecially those further east and those most dependent on Russian gas to run their industry.
Banning the import of Russian gas, oil and coal to Europe is not possible at this time. Photo: Bloomberg
Sanctions on Russian gas? Germany, Italy and Hungary say “no”
The meeting of European foreign ministers this Monday in Brussels, preparatory to the summit of heads of state and government on Thursday and Friday (in which the American Joe Biden will participate, visiting the Belgian capital for the NATO summit of the same Thursday), concentrated on the next round of sanctionsand the fifth, and whether this Russian hydrocarbon veto will enter it.
The European Minister for Foreign Affairs, the Spanish-Argentinian Josep Borrell, asked the Ministers of Foreign Affairs sanctions against the energy sector. The Czech, Slovak, Slovenian and Irish foreign ministers joined in the demand that the Polish, Estonian, Latvian and Lithuanian have been making for days: Stop buying Russian oil and gas because if not, Europe is financing Putin’s war.
the chancellors did not reach an agreement. If eight countries push for this veto to be activated now and a majority of governments follow this plan quietly, the German, Italian and Hungarian executives refuse.
German Chancellor Annalena Baerbock said at the start of the meeting that Berlin would eliminate its dependence on Russian hydrocarbons. “gradually and at full speed”. If that means anything. Germany refuses because of the impact it would have on its industry, which Ukrainian President Volodymyr Zelensky told the Bundestag in his address to German MPs last week.
Italy is more discreet but he is also against this commercial veto on Russian hydrocarbons. Italian industry is one of those better relations with Moscow from all over Europe. The Hungarian veto is more politicalfor the good relations between Prime Minister Viktor Orban and the Russian President.
Nearly 40% of the natural gas that Europe consumes is purchased in Russia. Photo: Bloomberg
Hungary will not support sanctions on Russian exports of hydrocarbons because it considers that this would jeopardize its energy security.
Hungarian Foreign Minister Peter Szijjártó said in Brussels on Monday: “We do not support sanctions that endanger Hungary’s energy security.”
Hungary depends on its neighbours. If Ukraine, Poland, Slovakia, Bulgaria… decide to close the taps, Russian oil and gas will not reach them.
The economic cost
economic institutes and Focus groups Brussels and other capitals have already calculated the economic cost to Europe if they make this decision.
They believe turning off the oil valve will make it more expensive, but can be replaced by imports from other suppliers. Immediately stopping buying Russian gas would be more difficult.
almost the 40% natural gas that Europe consumes is bought in Russia. Some could be replaced by more imports from Algeria (via Spain and Italy) and Norway. Another part could come from the increase in the number of LNG carriers transporting liquefied gas to European ports, mainly from the United States, Qatar and Nigeria, to regasify it in Europe.
That idea has limits until they are built more regasification plants because at the moment more than a third of all these factories in Europe are in Spain and there are not enough gas pipelines to France to significantly increase gas transport. The final solution would be to reduce the demand for natural gas by 10 to 15%.
The assembly of Chancellors also enabled the 27 to give the green light to the doubling, from 500 to 1,000 million, of the Community budget of pay for weapons and send them to Ukraine. Germany alone will put in another 1,000 million.
Brussels, special for Clarin