With Budapest no longer providing cover, EU governments are being forced to own their objections to tougher action against Russia.
BRUSSELS — EU ambassadors will make another push Wednesday to finalize the bloc’s first Russia sanctions package since Viktor Orbán left office, after governments stripped back key measures to protect their energy, fish processing, banking and shipping interests.
For years, Orbán — Hungary’s veteran populist leader who cultivated close ties with the Kremlin and repeatedly threatened to block sanctions — gave other capitals cover to resist tougher action. With Péter Magyar now leading Hungary and Budapest no longer standing in the way, those governments are being forced to defend their objections in the open.
“It has been a surprise and a disappointment how many member states have stalled in their actions,” said Ville Niinistö, a Finnish MEP and chair of the European Parliament’s Russia delegation. “It is of utmost importance to continue strengthening the EU sanctions against Russia in this moment when Russia is starting to feel the pressure of the war in its domestic economy and in public perception.”
A deal is still broadly expected, but more concessions may be needed before ambassadors can get it over the line. Seven people working on the package told POLITICO that several measures had already been weakened or dropped altogether.
The package, presented by European Commission President Ursula von der Leyen in June, is the 21st since Russia launched its full-scale invasion of Ukraine. After 20 previous rounds, diplomats say the EU is running out of easy targets and increasingly colliding with powerful national interests. Sanctions require the unanimous backing of all 27 EU countries.
“There’s no more low-hanging fruit, with 20 packages done. You’ll bump into individual member state interests more, so you have to find a balance,” said an EU diplomat involved in the discussions, granted anonymity to discuss the confidential talks, like others in this article.
Greece has so far refused to support the 21st package because of a ban on EU companies shipping Russian liquefied natural gas to third countries. Athens oversees the world’s largest merchant fleet and is concerned about the impact on a Greek company that operates ice-breaking tankers that export Russian LNG.
Greece’s ambassador warned that the measure could prompt vessels to reflag and move to jurisdictions where the rules would be even harder to enforce, according to two further diplomats involved in the discussions.
“We’re trying to find a way out of this, but what this [issue with Greece] shows is that we’re starting to collide with some key economic interests,” said a fourth diplomat.
Along with Malta and Cyprus, Greece had also hesitated over a six-month extension of the freeze on the $44.10-per-barrel price cap on Russian oil. EU countries bought themselves more time by keeping the cap frozen until Thursday, and the extension is now expected to pass if a solution is found for the Greek veto on LNG shipments.
Troubled waters
The talks were also roiled by an Austrian intervention on behalf of Raiffeisen Bank, the second largest in the country. Raiffeisen has long sought compensation for what it calls the illegal €2.44 billion expropriation of its assets in Russia through the transfer of frozen funds belonging to one of Moscow’s leading oligarchs.
Vienna had raised the case during negotiations over several previous sanctions packages. But people involved in the talks said this was the first time it had contributed to eleventh-hour delays. The Commission has sent Austria a proposal promising to examine the matter in a later sanctions package.
Other governments succeeded in removing a proposed phaseout of Russian fish imports, despite anger that Moscow still earns more than half a billion dollars a year from sales to the EU. The initial proposal would have banned imports of cod, haddock and pollock. It was dropped after several countries raised concerns about consumer prices and the impact on the EU’s fish-processing industry.
Earlier drafts also included sanctions against Russian Orthodox Patriarch Kirill and restrictions on former members of the Russian armed forces.
Bulgaria opposed listing Kirill, the head of the Russian church and a prominent supporter of Moscow’s war. Italy also entered a formal reservation, with a fifth EU diplomat saying the Vatican opposed targeting the head of another church.
“It’s Pope solidarity,” the diplomat said. Kirill was left out of the final text.
France and Italy — both of which grant large numbers of visas to Russians — also objected to restrictions on former Russian soldiers. They argued that the system for establishing who should be covered was not ready to be implemented, and the measures were significantly watered down.
While the carveouts have been significant, the package as it stands would result in dozens more Russian banks being cut off from the Western SWIFT messaging system. More than 250 people would also be banned from traveling to the EU in the largest such addition since 2023.
“With freezing the oil price cap and the visa restrictions on soldiers, it is pretty ambitious,” the third diplomat said.
Yet the concessions have punctured hopes that Orbán’s departure would make it substantially easier to tighten the economic pressure on Moscow.
“Orbán was difficult,” said another EU diplomat, “but he never actually blocked whole packages.”