Eastern Europeans urge new penalties as EU sanctions fail to end Putin’s war – POLITICO

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Poland and the Baltic states propose new punitive measures against Russia’s economy, arguing that the first rounds of EU sanctions have failed in their stated aim of ending President Vladimir Putin’s ability to wage war.

In the days after the invasion, EU Commission President Ursula von der Leyen promised to “cripple Putin’s ability to fund his war machine” and wreck Russia’s economy. But the frustration is great that the Russian head of state is still staying afloat financially; Europe is still paying Russia hundreds of millions of euros a day for energy, and the ruble has returned to pre-war levels.

“Some EU leaders are treating the sanctions as an excuse for their inaction,” said Polish Prime Minister Mateusz Morawiecki tweeted today. “The sanctions should bring peace to Ukraine, not soothe Europe’s guilty conscience.”

The Central and Eastern Europeans are arguing with their Western European colleagues about how hard they should turn the screws now. Poland is proposing a prohibitively high tariff on Russian fuel, while Estonia is proposing a special escrow account that will hold part of Russian energy payments until Russian forces withdraw from Ukraine.

The Western Europeans, on the other hand, want to avoid such drastic steps and the officials in Brussels are now preparing compliance measures to enforce existing penalties. European leaders agreed last week to focus only on implementing current sanctions and closing loopholes in them. “All our efforts should be aimed at enforcing these sanctions and preventing circumvention and tax evasion,” von der Leyen said last week.

From the point of view of Poland and the Baltic States, it is a mistake not to increase the pressure now. They point to the deteriorating humanitarian situation in Ukraine and to demands from the Ukrainian government itself. “Russia continues to bomb Ukrainian cities and murder civilians, so sanctions need to be tightened further,” said Ukrainian Foreign Minister Dmytro Kuleba told its French counterpart this week.

“We’ve taken a little break, but we feel the break is going on too long,” said a senior EU diplomat. “We must continue to put pressure on the Russian regime.”

Second best options

Demands from Poland and the Baltics for a full ban on Russian energy — or at least an embargo on Russian oil — are being blocked by Germany and others, leaving them now looking at second-best options.

“Far-reaching sanctions such as an energy ban will probably remain in the fridge for the time being,” said the high-ranking diplomat. “There is no consensus to move forward. But that doesn’t mean we can’t move forward with other things.”

This week, Morawiecki said Poland will halt all imports of Russian energy by the end of the year. The government will first proceed with a coal ban, which Poland wants to come into force in April or at the latest in May. He urged other EU countries to do the same. “This is our plan for the EU – to snatch this weapon out of Putin’s hands, out of Russia’s hands,” Morawiecki said.

The European Commission is currently “evaluating” the Polish government’s announcements, a Commission spokesman said.

Poland also asked the European Commission to introduce a tariff on Russian fossil fuels, as Brussels has exclusive competence over EU trade policy. A Polish official said “detailed proposals on this solution are being prepared”.

“We want to make importing Russian fossil fuels unprofitable; This is where these suggestions come from. However, we will continue to persuade our partners to support an embargo on Russian fossil fuels,” the official added.

Estonia is pushing for another compromise, urging Brussels to withhold part of Russia’s energy revenues in a special account that Moscow could only access after Russia withdrew its army. Estonian Prime Minister Kaja Kallas, who reported that the EU had paid Russia 22 billion euros since the war began, wrote a letter to von der Leyen seen by POLITICO this week, proposing the escrow scheme after she last week had unsuccessfully pushed the idea at European Council meetings with other leaders.

Poland and the Baltics also called on the Commission to ban truck traffic to and from Russia and Belarus and restrict ships’ access to EU ports. In a letter to the Commission last week and obtained from POLITICO The countries also called for excluding Russia and Belarus from international agreements to facilitate cross-border truck traffic.

New sanction packages

Despite this mounting pressure from countries feeling the heat of Russian aggression, the focus in Brussels remains on closing the loopholes in the sanctions already in place.

“We have to look back to see the impact of the measures we have already taken,” said Portugal’s outgoing ambassador to the EU, Nuno Brito, and “what loopholes we still have.”

Therefore, according to four EU diplomats and officials, the European Commission is preparing a “compliance package”.

Among other things, this could focus on listing family members of oligarchs to avoid sanctions circumvention, tightening export controls and potentially further sanctions against Russian propaganda channels, in addition to previous sanctions against Kremlin-backed media outlets RT and Sputnik.

At the same time, the Commission is also preparing further-reaching sanctions if the EU has to act quickly, for example in response to a chemical weapons attack by Russia. However, what such a broader sanctions package would look like depends on the trigger and more consultation with EU countries, taking into account their sensitivities.

“There are many ideas, but it is unclear to us which measures will be part of the next package and which will not. It will of course also depend on the trigger,” said another EU diplomat.

Zosia Wanat, Zia Weise, Hanne Cokelaere, Stuart Lau and Jacopo Barigazzi contributed coverage.

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