European Union member states are growing increasingly divided over how to handle sanctions against Russia, with resistance from some nations reaching unprecedented levels. While Russia has responded to sanctions by shifting its trade focus and restructuring supply chains, the EU is feeling the sting of a 'boomerang effect' from the measures, suffering corporate losses and widening internal rifts.
The EU's Superficial Unity
According to reports citing multiple EU diplomats, many European companies that maintain trade relations with Russia are suffering under the bloc's sanctions, leading countries like Greece, France, Italy, and Austria to distance themselves from the EU's stance. This has raised external doubts about the EU's willingness to endure the chain reactions caused by its sanctions against Russia.
Last week, after several days of intensive negotiations, EU member state representatives failed to reach consensus on a proposed 21st round of sanctions. Several nations vetoed the broad package covering areas such as energy, finance, and fisheries. The only point of agreement was to maintain the current price cap on Russian oil at $44.1 per barrel, extending its validity until July 23.
During the talks, Greece called for the EU to permit the transshipment of Russian liquefied natural gas to third countries, citing the need to save its shipping companies. Portugal and Germany sought an end to the ban on Russian fish imports to support their domestic processing industries. France and Italy protested an EU visa ban on some Russian soldiers over concerns about losing Russian tourists. Austria reiterated that frozen Russian assets worth 20 billion euros should be unfrozen to compensate Raiffeisen Bank International.
Greece's criticism of the EU's Russia sanctions has been particularly sharp. Greek government officials argue that any new EU sanctions should impose a "greater cost" on Russia, not undermine the EU's own interests. They insist sanctions must be "carefully calibrated" to maximize pressure on Russia while minimizing "unintended negative consequences." Referring to the proposed sanctions' potential harm to Greek shipping firm Dynagas, officials stated that the EU's "zealous sanctions" against Russia amount to "shooting itself in the foot."
Under EU rules, new sanctions require unanimous approval from all 27 member states to take effect. Negotiations on this latest round continue, but one diplomat expressed pessimism about the atmosphere, noting that at the negotiating table, "countries only pay lip service to unity and toughness towards Russia, but once their own interests are touched, they start calculating for themselves."
Root Causes of the Sanctions Stalemate
In the view of former U.S. sanctions officials, Greece's various complaints to the EU are primarily to "stand up for" Dynagas. The company is a giant in Greece's shipping industry, which holds significant weight in the national economy. Greece's permanent representative to the EU has warned that the proposed sanctions could lead to Dynagas's "bankruptcy." The company itself has argued that banning the transshipment of Russian LNG to third countries would cause "blowback" for the EU in areas like maritime leadership, employment, and geopolitical goals.
Several European companies, including Danish brewer Carlsberg Group and Finnish energy firm Fortum, suffered massive losses in the initial months following the full-scale escalation of the Ukraine crisis in 2022 due to EU sanctions. Reports indicate that many EU nations suffering losses from the sanctions are growing increasingly angry, frequently clashing to protect their own national interests.
A report noted that within EU member states, pro-Russian political parties are becoming more open in advocating for "re-embracing Russia," such as Germany's Alternative for Germany (AfD) and France's National Rally. A tough stance on Russia seems less like a political "red line" and more like a bargaining chip in policy decisions. Russia is also gradually shedding its label as an "external threat" and receiving "concern and attention" from some European political parties.
A Russian presidential special representative for foreign investment and economic cooperation pointed out on social media that the unpopularity of anti-Russia sanctions in Europe is unsurprising because the measures have not worked and have instead cost EU countries "more than 3 trillion euros." He attributed the EU's emerging "suicidal economic collapse" to the sanctions against Russia and a lack of control over immigration.
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