Saturday, July 2, 2022

Ukraine ‘unhappy’ as Hungary stalls EU Russian oil ban

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BRUSSELS: Ukraine’s foreign minister urged the EU Monday to overcome Hungary’s resistance to an embargo on Russian oil and then look to “kill” all of Moscow’s exports to starve its war machine of funds. 

Budapest has been holding up a push by Brussels, backed by other European Union states, to ban Moscow’s vital oil exports, the cornerstone of a planned sixth package of sanctions, arguing that it would hammer its own economy.

“We are unhappy with the fact that the oil embargo is not there,” Ukraine’s top diplomat Dmytro Kuleba said after meeting EU foreign ministers in Brussels.

“It’s clear who’s holding up the issue. But time is running out because every day Russia keeps making money and investing this money into the war.”

Kuleba said he was convinced the oil embargo would come and “the only question is when and what will be the price that the European Union will have to pay to make it happen.”

He then called on the 27-nation bloc to move on to a seventh package of sanctions that would “kill Russian exports” and deliver a crushing blow to President Vladimir Putin’s coffers.

Brussels is desperate to avoid the appearance of division in the face of the Kremlin’s onslaught on Ukraine, and officials are scrambling behind the scenes to patch up a compromise with Hungary after making the oil proposal on May 4.

“The whole union is being held hostage by one member state who cannot help us find the consensus,” Lithuanian Foreign Minister Gabrielius Landsbergis declared

EU foreign affairs chief Josep Borrell said discussions to break the deadlock would go back to ambassadors after Hungary laid out the economic costs of the move.

“I cannot tell you if it’s going to take one week or two,” he said.

Hungary hikes cost

Brussels has offered Hungary, the Czech Republic and Slovakia long grace periods to phase out Russian oil imports but that has not yet convinced Budapest to budge.

Bulgaria’s Prime Minister Kiril Petkov said that Sofia was also seeking a two year exemption on enforcing the ban to allow it to put in place new infrastructure.

Hungary, often the odd one out in EU decision making, has demanded to be exempted from the embargo for at least four years and wants 800 million euros ($830 million) in EU funds to re-tool a refinery and boost the capacity of a pipeline to Croatia.

And Foreign Minister Peter Szijjarto on Monday appeared to up the price tag for ditching Russian oil by saying it would cost 15 to 18 billion euros ($16 to $19 billion) to prepare its economy for the move.

“It is legitimate for Hungarians to expect a proposal” from the European Commission to cushion that blow, Szijjarto said in comments broadcast on his Facebook page.

“A complete modernisation of the Hungarian energy infrastructure is needed to the scale of 15 to 18 billion euros.”

Putin’s invasion at the end of February has seen the EU slap unprecedented sanctions on Moscow and send weapons to Ukraine in a strong show of unity that now risks cracking.

The protracted dispute over the oil embargo has led some EU diplomats to believe achieving a ban on Russian natural gas is beyond their reach.

The EU plans to cut its reliance on Russian gas by two thirds this year, but it has been reluctant to halt imports as Germany opposes such a move.

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