European Unity Breaking as Bloc Announces 9th Sanctions Package Against Russia

Emergency session of the European parliament in progress in Brussels, Belgium, on Mar. 1, 2022. European Union/Screenshot via The Epoch Times

European Union (EU) leaders recently agreed on a ninth package of sanctions against Moscow, but the group is facing conflicting opinions as to the extent it should go with these sanctions.

The latest package imposes export controls and restrictions on certain technological goods that can boost Russia’s defense sector as well as technologies such as aircraft engines and drone engines. More banks have been subjected to asset freezes. The licenses of four media outlets are to be suspended in EU countries, due to their direct or indirect control by the Russian Federation. The EU expanded the ban on new investments in the Russian energy sector by targeting certain mining industries.

A “very significant number” of individuals and entities have also been subjected to sanctions, according to a Dec. 16 statement by the European Council. During the sanctions talks, countries were split as to how strong the measures needed to be.

While, for example, Poland and Baltic nations, which lie close to Russia, pushed for the adoption of tougher measures against Moscow, countries in the West, such as Germany, appeared more hesitant. In addition, nations such as Hungary, Greece, and Belgium, which continue to be heavily reliant on Russian energy imports, also opposed further sweeping actions against Moscow, according to Reuters.

“It is becoming increasingly difficult to impose sanctions that hit Russia hard enough, without excessive collateral damage to the EU,” a spokesperson for Belgium’s government told the outlet ahead of the deal at the EU leaders’ summit.

Conflict Over Sanctions

The Lithuanian foreign minister recently called the latest sanctions package a “missed opportunity,” lamenting about how member states spent more time discussing exemptions rather than pushing ahead with tougher measures.

Lithuania was one of the nations that opposed attempts to exempt a few Russian oligarchs involved in the fertilizer and agriculture sectors. Poland pushed for stronger sanctions against the Russian gas and nuclear sector while insisting on not providing exemptions to Russian diamonds and steel.

“We will demand Germany change its policy. It’s not fair for Germany to rely on Poland to defend it from the threat of war,” said Radosław Sikorski, Poland’s former foreign minister and now a member of the European Parliament, according to Reuters. “Just because you are richer and bigger doesn’t mean you are always right.”

Belgium has continued to trade in Russian diamonds, though at a lower volume, despite pressure to stop doing so. Some argue that thousands of Belgian jobs would be at risk if Russian diamond imports were to be immediately stopped.

In Hungary, Prime Minister Viktor Orban has been specifically critical of EU sanctions against Russia, insisting that these measures have pushed Europe into an ongoing and severe energy crisis.

EU Price Cap

The EU has imposed a price cap on seaborne Russian oil deliveries to punish Moscow as well as to temper natural gas prices.

However, the European Central Bank (ECB) recently warned that the price cap would end up triggering volatility in the gas market. The proposed price cap could “jeopardize financial stability in the euro area,” the ECB said in an opinion signed by its president, Christine Lagarde.

“The mechanism’s current design may increase volatility and related margin calls, challenge central counterparties’ ability to manage financial risks, and may also incentivize migration from trading venues to the non-centrally cleared over-the-counter market,” it stated.

In addition, the impact of the price cap on Russia might get blunted because Moscow can reroute European seaborne shipments to countries such as Turkey, China, and India.