The European Union’s latest sanctions on Russia, formally adopted on 21 July, are probably the weakest package so far from Brussels. To understand why, look no further than the bloc's other activities in recent weeks to prepare for what could be a long, cold winter.
The latest batch of measures against Russia is the EU's seventh since Moscow launched its large-scale invasion of Ukraine on 24 February. But not even the European Commission, which is in charge of preparing EU sanctions, is referring to this number. Instead, it calls it a "maintenance and alignment package." EU diplomats, speaking to me on condition of anonymity, are even more blunt. One mockingly referred to it as "a holiday package, ready to be signed off before Brussels unofficially shuts down for the upcoming five weeks."
The ban on Russian gold, aligning with G7 measures agreed in June, is probably the headline step.
Otherwise, the truth is that the latest raft of measures largely sticks to the technical “plumbing” by closing loopholes that have been detected since the previous six packages were enacted, in addition to adding items and names to already established sanctions lists.
Take, for example, the ban on calls at EU ports for Russian-flagged vessels that was introduced earlier this year. Now that exclusion covers not only ports but also locks, because national officials noticed that some ships were unloading cargo at the entry ports of canals leading to harbors in the Netherlands and northern Germany.
Up to 50 new items in the chemical, metals, and machinery sectors with a value up to 400 million euros in prewar trade will also be subject to export controls and visa bans, and asset freezes on around 50 people and entities will be imposed as well. The list, which now comprises close to 1,200 people and 100 entities, will now see the largest Russian bank Sberbank, the Kremlin-linked bikers club Night Wolves, and a few politicians, oligarchs, and some of their relatives targeted.
Another potentially useful move is that Brussels will demand a "self-reporting obligation of listed persons." This means that sanctioned individuals must indicate their European Union-based assets; failure to do so leaves them in breach of EU regulations and, in principle, subject to national criminal investigations. It is up to each EU member state to police this itself, of course, but the move could lead to the confiscation of such undeclared assets.
Newfound Caution
Those seem far from the harder-hitting rounds of sanctions when Brussels, among other things, targeted Russian coal and 90 percent of Russian oil exports to the EU. The fallout from the nearly monthlong negotiations earlier this summer on banning most Russian oil by the end of the year, notably the tough stance by Hungary to secure important carve-outs, has clearly played a part in the bloc's newfound caution.
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And while "Russia hawks" like the Baltic states and Poland want to push on with more measures to keep up the momentum, other countries might want to proceed more slowly.
It is impossible to gauge the impact of the loss of a parliamentary majority for French President Emmanuel Macron or potential snap Italian elections in September, but many EU officials I've spoken with think such things could dampen Brussels’ confidence going forward.
Unanimity among the 27 EU member states is needed on every new measure. But in reality, there are just three big areas left to sanction: the remaining pipelined oil, nuclear, and gas. And all three may be difficult to target anytime soon.
With soaring electricity prices inside the European Union coupled with record-high inflation (the European Commission predicts average annual inflation of 8.3 percent in 2022), EU officials speaking privately note that Brussels is more likely to focus throughout the winter on packages similar to the one just adopted than anything that might substantially target the Russian economy -- and by extension the EU’s own businesses and households.
Targeting the remaining 10 percent of Russian oil requires winning over Hungary and other landlocked Central and Eastern European states. There could be movement on this if the European Commission and Hungary overcome various rule-of-law disputes currently blocking billions of euros in EU funds earmarked for Budapest.
Homing in on Russian nuclear supplies and services could be equally problematic, as it would similarly affect Central and Eastern Europe disproportionately. Finding alternative fuel supplies could prove both costly and difficult.
Instead, some have argued that Russian gas -- used more widely across the EU -- should be the next target. The recent cut-off of gas flows via the Nordstream 1 pipeline for "maintenance" work has further underlined to Brussels that it needs to diversify supplies and eliminate its dependency on Moscow.
It is therefore unsurprising to see members of the European Commission jetting around the world to strike deals on behalf of the entire EU for alternative energy sources.
'Locking Putin In A Vice'
European Commission President Ursula von der Leyen’s trip to Azerbaijan earlier this week should be seen in this light. A memorandum of understanding was struck with Baku to expand the Southern Gas Corridor. As of next year, the route will deliver 12 billion cubic meters (bcm) of gas annually -- up from 8 bcm. Similar agreements have already been signed or are in the making with several Gulf states, Algeria, Norway, and the United States.
Closer to home, joint EU gas storages have been set up that need to be 80 percent full by 1 November, from the current average of 64 percent. And in the latest effort to limit energy consumption, Brussels has proposed a regulation that would set an initial voluntary 15 percent reduction target for gas use in the bloc between August 1 and March 31 -- a target that can become mandatory in case of a severe gas shortage.
All of this could pave the way for the European Union eventually to sanction Russian gas, even though it's unlikely to happen this winter.
In the meantime, we are likely to hear more messages from Brussels of the sort that EU foreign policy chief Josep Borrell conveyed in a recent blog post.
He noted that EU citizens need “strategic patience” when it comes to sanctions, as "it may take a long time for them to have the desired effect." Russia, he argued, will be "forced to choose between butter and guns, locking Putin in a vice that is gradually tightening."
The big question is whether Ukraine can afford similar patience with the EU.
