(Bloomberg) – The chances of the European Union approving sanctions on Russian oil are dwindling as bloc leaders meet next week as Hungary continues to oppose the move, according to people familiar with the matter.
Hungarian Prime Minister Viktor Orban said a few weeks ago that a summit of European leaders would be needed to forge an oil embargo, but his government is now hinting that any progress will probably slip next month, people say. Asked not to disclose.
The European Union (EU) has been stalling for weeks on a European Commission proposal to phase out Russian oil in early 2023 as part of a sixth package of sanctions against Moscow over its invasion of Ukraine.
In an attempt to break the stalemate, the bloc’s executive branch has offered Hungary and Slovakia to comply with the phase-out by the end of 2024, and the Czech Republic until June of the same year. Budapest has indicated that it will need at least 770 million euros ($ 810 million) to revive its oil industry, including investing in Croatia’s infrastructure, and an undisclosed amount of additional funding to cope with potential gas price increases.
The commission has outlined the need for infrastructure investment of up to 2 billion euros as part of a larger strategy to free Europe from Russian power, but that potential investment has yet to move.
Negotiations between the commission and Hungary are ongoing and could still lead to progress before leaders meet for a two-day summit in Brussels next week.
“I am optimistic about a sixth approval package,” Dutch Prime Minister Mark Rutte told parliament on Monday, and asked if he expected a boycott of oil next week. “But I’ve been saying this for weeks,” he added.
According to an official familiar with the talks, Hungary re-listed its oil demands at a closed-door ministerial meeting in Brussels on Monday, first calling for a solution and then calling for sanctions. The issue will likely be both a shadow and a poison at next week’s summit, officials said.
Budapest’s position appears to be softening rather than softening, another said.
“We are not spectators, but the Hungarian government has a clear position and we are committed to it,” Hungarian government spokeswoman Joltan Kovacs told Bloomberg.
Hungarian Justice Minister Judith Varg told reporters Monday that Hungary needs to see a long-term strategy, which includes investing in terminals and pipelines in other member states.
Some member states have suggested extracting oil from the embargo package, including proposals to cut more banks from the international payment system Swift, a ban on the provision of consulting services to Russian companies, a ban on the purchase of real estate in the EU and more people. List of block bans.
Others have suggested that the other 26 EU members could agree to an oil embargo outside the bloc and without Hungary’s participation.
German Economy Minister Robert Habeck said in an interview with Deutsche Funk radio on Monday that “if the chairman of the commission says we will do it as 26 without Hungary, it is a step I will always support.” “But I have not heard from the EU yet and I am ready to let the EU take the lead. I hope that whatever happens, as always in Europe, some countries will effectively have special rights. “
One person said there was concern about the idea that they could weaken the package and ask other member states for concessions. A proposal to ban tankers carrying Russian oil to third countries anywhere in the world was dropped earlier this month after Greece objected to the provision.
Landlocked Hungary has previously insisted that any restrictions on Russian oil should focus on maritime supplies – and concessional pipelines – to support Budapest’s embargo. Foreign Minister Peter Cizzarto says his country will need between 15 billion and 18 billion euros to restructure its energy security.
The price of fuel oil in Hungary is one of the lowest in Europe, thanks to a restriction on the price that was made possible mainly by state subsidies and cheaper supplies from Russia.
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