BRUSSELS (Parliament Politics Magazine) – EU leaders are travelling to Brussels for a two-day special summit focused on the war in Ukraine, dependency of energy, and investments in defence.
The meeting on the agenda, on the other hand, is likely to be dominated by the long-running negotiations over a potential EU-wide embargo on imports on Russian oil.
It has been about four weeks since the President of the European Commission, Ursula von der Leyen announced a plan to phase out all Russian oil supplies by the end of the year.
Both pipeline and sea-borne imports were targeted by the embargo.
However, shortly after her declaration, a number of member nations, notably Bulgaria, the Czech Republic, Hungary and Slovakia expressed reservations and requested special exceptions to be given more time for adapting their refineries and cushioning the impact on the economy.
Several rounds of difficult talks have failed to provide a breakthrough, with Hungary emerging as the main and most verbose opponent.
Meanwhile, Ukraine is wearing thin on patience, with foreign affairs minister Dmytro Kuleba tweeting that the EU’s sixth package of sanctions had to be adopted as quickly as possible, including the oil embargo.
Sanctions must be approved by all 27 member states of the EU.
Exemption for pipelines
According to the newest copy being distributed among embassies, a significant change could be made: a complete exemption for pipeline oil.
The Druzhba pipeline, which feeds refineries in Austria, the Czech Republic, Germany, Hungary, Poland and Slovakia accounts for 70 to 85 percent of Russian oil imported to the EU.
For decades, these refineries have relied on consistent and reasonably priced supply of a certain sort of Russian oil. The abrupt transfer to other suppliers is predicted to be extremely expensive and disruptive.
The shift might cost about €800 million and take up to four years, according to Hungary.
The European Commission has revealed a €210 billion plan to phase out all Russian fossil fuels, with €2 billion committed to improving oil infrastructure.
According to Brussels, a combination of financial mechanisms might help raise up to €300 billion by the end of the decade, but the funds will be tied to the EU’s recovery fund.
Exempting pipeline oil while prohibiting seaborne imports might result in unfair competition across the single market, with certain nations receiving consistent and reasonable supply while others struggle to find more expensive barrels from non-Russian sources.
President von der Leyen told Euronews last week at the World Economic Forum that she expected technical solutions to the oil embargo might be established “in a matter of weeks.”
Because [certain countries] were landlocked, they were unable to obtain oil by sea. They required alternate energy sources and pipes, as well as refinery upgrades, said von der Leyen. It was a complicated mechanism, she added.
Focus on food security
The first day of the summit will start at 4 p.m. (CET) on Monday and will focus on the Ukraine conflict and the country’s immediate budgetary requirements.
President Volodymyr Zelenskyy of Ukraine has stated that the government need more than $7 billion (€6.5 billion) a month to pay for basic services and keep the economy afloat.
The EU is preparing to contribute €9 billion in macro-financial support and is considering how to pay for the post-war rebuilding of Ukraine, including through the confiscation of Russian-owned assets.
Military support, confiscation, and financial aid will all be discussed in depth on Monday. President Zelenskyy is slated to make a video conference address to the leaders.
Ukraine is a major supplier of wheat, corn, barley, and sunflower oil, but a Russian siege of the Black Sea has stopped it from reaching international markets.
Ukraine has 40 million tonnes of grain in storage, with half of it due to be shipped by the end of July.
EU leaders will discuss how to accomplish this by establishing alternate trade channels, which will have significant economic and security ramifications.
Russian President Vladimir Putin has stated that if the West’s “politically motivated” sanctions against Russia are eased, he is eager to assist in resolving the food issue.
Ursula von der Leyen said that talks to open the Black Sea are “ongoing” and that Russia is to blame the starvation of millions of people.
