Budapest recently objected to the EU extending sanctions against Russian oligarchs and called for three businessmen to be removed from the list.
EU countries eventually forced Budapest to join the sanctions, but the threats showed how Hungarian leader Viktor Orbán is determined to use any means at his disposal, in this case an automated, technical procedure, to gain political leverage.
After more than six months of war, the EU appears to have lost the power of sanctions.
In the first few months of the war, which began on February 24, European diplomats and officials worked feverishly to cripple Russian President Vladimir Putin’s allies and industrial companies with sanctions. The bloc’s solidarity in putting pressure on the Russian economy – even at the cost of paying a price within the EU itself – has surprised even some of the EU’s harshest critics.
But now, as one high-ranking official of an EU country said, the bloc is simply not thinking about sanctions anymore.
According to one EU country’s senior diplomat, “its appetite is weaker.” “With each package, it gets more complicated,” he said.
The EU’s long delay in approving a ban on oil imports from Russia – and the torturous process of finding exemptions and compensation for delayers such as Hungary – have left bitter memories. Orban’s move on the oligarchs was another reminder of this painful episode.
As for the new sanctions packages, there are actually fears that Hungary may not only delay, but also block the decision altogether, said the aforementioned high-ranking EU diplomat.
And not only Hungary. Italy’s future stance on sanctions when a new government is formed in Rome is also worrying. Matteo Salvini, the leader of Italy’s far-right League party, has said Western sanctions against Russia are damaging Italy and urged other leaders to reconsider their approach.
In general, there is a sense of sanctions fatigue in Western Europe, especially because it is getting harder and harder to find measures that would do more damage to Russia than the EU economy itself.
More importantly, growing voter anger over rising energy and consumer prices is making European politicians increasingly nervous.
“We risk a winter of discontent,” said one EU official, dismissing any talk of new sanctions. – The current energy crisis makes all political leaders nervous because they fear the political consequences. In many countries, it is about the survival of their governments.”
The European Commission is now going to focus on implementing existing sanctions and closing potential loopholes.
But even this is not an easy task. Ukraine’s Deputy Justice Minister Iryna Mudra is touring European capitals and the United States this month to persuade governments to track down and seize the assets of sanctioned Russians.
Earlier this year, the EU created the legal framework for such actions, but little has been done over the summer after legislation was proposed to make sanctions evasion a crime and allow for the confiscation of private assets.
“They plan to start consultations on this directive in October,” I. Mudra said after a meeting with EU Justice Commissioner Didier Reynders. “They will make every effort to get this directive… adopted as soon as possible, so all the preparatory work should be completed by the end of the year.”
I. Mudra also wants the EU to confiscate not only private but also state assets of Russia, which would be earmarked for the reconstruction of Ukraine.
However, there are legal obstacles to this plan and it is unlikely that it will become a reality soon – I. Mudra herself admits that.
“It was an interesting discussion, they listened to us with quite a lot of interest. And while they agree that Russia should essentially pay for all the brutality, there are still legal issues surrounding sovereign immunity, she said. “But at least they’ll start thinking about it.”
Sanctions fatigue is causing dissatisfaction among Ukraine and the EU countries that most actively support the fight against Moscow, such as Poland and the Baltic states.
More belligerent states continue to call for new EU sanctions packages against Russia, two EU diplomats said. “We will continue to be an annoying voice inside the EU,” said one diplomat.
They have a wide range of offers. One of them is the oil price ceiling, which was discussed during the G7 meeting. Another proposal is sanctions on Russia’s nuclear industry and nuclear fuel, given the situation at Ukraine’s Zaporizhia nuclear power plant. Other proposals include more sanctions on cloud services, cryptocurrencies and other technologies.
Russia’s continued aggression is enough to justify even more pressure on Moscow, another EU diplomat said. Although determined countries will continue to campaign, they may have to wait.
“Nobody wants to talk about new sanctions now,” noted one EU official.
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