EU ‘determined’ to sway Hungary over Russian oil sanctions

The EU is “very much determined” to maintain a united front against Moscow by securing unanimous support for the proposed ban on Russian oil and winning Hungary over, a top European Commission official said.

Commission vice-president Maroš Šefčovič admitted that the mooted oil embargo was taking the 27 EU member states into “more and more difficult territory”, given the negative economic impact of the measures.

But he added: “We are very much determined to work with Hungary and of course with the rest of the EU member states to have European unity . . . We definitely prefer the 27 going forward together.” 

Diplomats on Friday expressed optimism about swaying Hungarian prime minister Viktor Orbán next week as Budapest holds out for extra investment and time to make the transition away from Russian crude.

Alighting on anything less than the full suite of sanctions on Russian oil, banks and individuals put forward last week by the Commission “will be seen as a failure”, one EU diplomat said.

After rushing through five packages of sweeping sanctions on Russia in under two months, the EU has hit a roadblock as it seeks the consent of Hungary and other landlocked eastern European states to measures phasing out Russian oil.

EU sanctions require the unanimous support of all member states to come into law, giving holdout states huge sway over the talks. Fallback options if Hungary continues to withhold its consent remain unattractive, officials and diplomats warn.

For instance, it remains theoretically possible for 26 member states to agree to impose bilateral sanctions on Russia under their national regimes, leaving Hungary to go its own way. But this would not only undermine the EU-level unity shown to date, but it would also be legally nettlesome and procedurally complex.

It would also risk distorting the single market, given Hungary would be free to purchase Russian crude at potentially favourable prices while the rest of the EU had to source oil from elsewhere.

Delaying the oil measures in the sixth sanctions package and forging ahead with the other measures on banks and individuals was also an unappealing alternative, diplomats said. The EU is anxious to stand alongside its G7 partners including the US, which imposed oil sanctions in March.

“I think we will go for unity as long as possible, both in terms of the member states and the integrity of this package,” said one EU diplomat. “We would not want someone else to declare victory over a lack of EU unity.”

Budapest is seeking hefty EU investments in its refineries and pipelines as a condition for participation, but other states including Slovakia and the Czech Republic have also sought special terms.

“The Slovaks and Czechs are at least partly hiding behind the Hungarians — the common issue is ensuring security of supply,” said one senior EU diplomat, adding they were seeking extended transition periods, more time to build infrastructure and concrete commitments.

Nevertheless, negotiators were “rather optimistic” that the sixth sanctions package would be agreed — possibly next week, the diplomat said.

The measures are set to be discussed at a meeting of foreign affairs ministers on Monday, due to be attended by Hungary’s foreign minister Péter Szijjártó. But much hinges on bilateral talks between Commission president Ursula von der Leyen’s team and Budapest.

A meeting between Von der Leyen and Orbán on Monday failed to sketch a compromise and on Wednesday Szijjártó requested that the oil embargo exclude shipments of Russian oil via pipelines, keeping it confined to seaborne shipments — a non-starter for the Commission and other EU capitals.

Budapest has argued that a joint declaration by EU leaders at the informal summit in Versailles in March left scope for member states to make their own choices on their “energy mix” as they phased out their reliance on Russian oil, gas and coal. EU leaders are meeting again at the end of May.

“These are aspects that the prime ministers need to discuss among themselves again,” Orbán told public radio last week, stressing Hungary held as much sway as larger nations over the issue. “If we want to change the consensus that was built earlier, then we can do that unanimously.”

EU officials insisted Hungary would swing behind the measures if the financial incentives from the EU are right. “Orban is very pragmatic — it’s all about business,” said one.

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