Greece blocks agreement on the 21st package of sanctions against Russia

Brussels. Whilst Ursula von der Leyen was in Kyiv yesterday to receive the Order of Europe from Volodymyr Zelensky and announce a new partnership between the European Union and Ukraine on the defence industry, the ambassadors of the twenty-seven Member States were holed up in a room in Brussels trying to reach a last-minute agreement on the twenty-first package of sanctions against Russia. To no avail. To everyone’s astonishment, Greece maintained its veto on the new measures, despite a midnight deadline that could have raised the price cap on Russian oil from $44 to $65 a barrel. Athens is determined at all costs to secure an exemption to allow its shipowners to continue transporting Russian liquefied natural gas through EU waters and ports, provided it is destined for third countries. Tens of billions of euros are at stake. Although the Irish Presidency of the Council of the EU has made numerous concessions – the latest proposal provided for an exemption to be reviewed annually – Greece has not relented.

Negotiations on the 21st sanctions package will continue over the coming days. The ambassadors have agreed on a technical solution to avoid raising the price cap on Russian crude oil, which sets the threshold above which EU operators cannot offer services to transport the oil. The price cap will remain frozen until 23 July. In the meantime, the economic and technical implications of the entire package will be examined. Ambassadors from the Member States most supportive of Ukraine have begun to express their exasperation and anger not only towards Greece, but also towards other countries (including Italy) that have watered down the package. Over more than a month of negotiations, several sanctions measures proposed by the Commission – such as a ban on cod imports or on issuing visas to Russian combatants – have been scrapped or watered down. The 21st sanctions package has thus become a symbol of petty national self-interest, which is preventing the EU from exerting ever greater political and economic pressure on Russia.

In Kyiv, von der Leyen announced the launch of a new EU-Ukraine defence industrial partnership, focusing in particular on the joint production of drones and anti-drone systems. The ‘Drone-Deal’ will be built around a series of joint ventures to combine Ukraine’s battle-tested capabilities with European industrial strength (among the 18 founding members of the EU due to meet in Brussels in September is Fincantieri, the only Italian company). By 2028, it is planned to extend industrial cooperation to the joint production of anti-ballistic missiles. The Commission has also provided Ukraine with one billion euros for the procurement of drones and approved a 10-billion-euro disbursement plan to fund further drones, missiles and fighter aircraft as part of the 90-billion-euro loan. “The EU stands shoulder to shoulder with the courageous Ukrainian people,” said von der Leyen, highlighting “the reality on the battlefield”, with Russia appearing weak and Ukraine continuing to resist. “Every attack only serves to strengthen your people’s determination to be free. And it strengthens our resolve to support you and Ukraine in every possible way, for as long as it takes.” The failure to reach agreement on sanctions shows that this is not the case for everyone.

Yet the threat from Russia is becoming increasingly real. The President of Lithuania, Gitanas Nauseda, told the Baltic News Service that certain intelligence reports point to a possible Russian kinetic attack on ‘critical infrastructure’ in the Baltic states or Poland. It would not be a large-scale aggression, as Moscow lacks the capacity for such an action, but it would be more than mere traditional sabotage. Similar warnings have been issued by Polish political leaders. At the end of June, Latvian intelligence raised the alarm over Russia’s planning of a small-scale military provocation. Striking energy or transport infrastructure in a NATO country would allow Putin to revive his fortunes in the face of growing domestic difficulties caused by the stalemate on the battlefield and Ukraine’s strikes deep into Russian territory. But it would also be a way of testing the willingness of NATO allies to respond. In this regard, the signal coming from the EU regarding the 21st package of sanctions against Russia is very worrying.