Germany warns European unity ‘collapses’ over Russian sanctions

Germany’s economy minister has warned that European unity over sanctions on Russia is “starting to unravel”, as diplomats underscore continued disagreement over a package of sanctions that member states will discuss on Monday.

Speaking at a meeting of EU ambassadors in Brussels on Sunday, Robert Harbeck failed to agree on the latest package of EU sanctions on Moscow, including a plan to halt imports of Russian oil that Hungary has blocked for weeks.

Diplomats had hoped to agree on measures to be taken with EU leaders, who will begin a two-day summit on Monday.

“After Russia attacked Ukraine, we saw what happens when Europe is united. Looking ahead to tomorrow’s summit, let’s hope it continues like this. But it has started to crumble again,” Harbeck, who is also deputy prime minister, said on Sunday. Germany told reporters.

His comments underscored the EU’s difficulty in finding a way to extend punishment for Moscow’s war on Ukraine without affecting parts of the European economy that depend heavily on Russian oil and gas supplies.

“Europe remains a huge economic region with incredible economic power. When it comes together, it can harness that power,” Habeck said at the opening of a trade show.

EU diplomats tried to unite on Sunday to reach a compromise plan that would impose an embargo on Russian offshore oil purchases and exempt oil imported through pipelines, according to three EU diplomats. This would cover about two-thirds of Russia’s oil imports in Europe, but would not affect oil flows to Hungary and other countries including Germany.

The potential solution is seen as a way to address concerns about the security of oil supply in Hungary, Slovakia and the Czech Republic.

“The problem is the same, but the way we try to solve it is different,” said a senior EU diplomat, adding that it could be weeks before a final deal is reached.

EU diplomats are due to meet again on Monday morning ahead of the European Council meeting as a last-ditch effort to avoid bitter divisions during the summit.

Some officials worry that treating Russian crude differently based on how they enter the EU could distort oil markets.

“Many countries have shown that this is such a complex economic sector that we have to be careful to maintain a level playing field,” said an EU diplomat with direct knowledge of the negotiations. “The legal aspect needs to be fine-tuned, so it may take more time,” the diplomat said.

Issues that remain to be resolved include the need for technical adjustments for refineries in Central Europe so they can handle different supplies, as well as the construction and financing of alternative oil pipelines so that all Russian oil can be embargoed at a later stage.

The sanctions package under discussion is the sixth proposed by Brussels since the invasion began in February. The EU has imposed sanctions on coal, but made it possible for countries to continue buying gas from Moscow.

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