Condemning “in the strongest terms the unprovoked and unjustified military aggression” by Russia against Ukraine, EU leaders agreed unprecedented sanctions against Moscow on the night of 24-25 February, following those adopted on Wednesday (see EUROPE 12897/1).
“We don’t need sanctions that bark, we need sanctions that bite”, warned Belgian Prime Minister Alexander de Croo, calling it Europe’s darkest hour since the Second World War.
In the conclusions adopted, the EU27 warned that Russia would be held accountable for its actions. They therefore demanded that it immediately cease its military actions, unconditionally withdraw all its military forces and equipment from all Ukrainian territory, and fully respect the territorial integrity, sovereignty, and independence of Ukraine.
The sanctions, adopted in less than 20 minutes, according to Swedish Prime Minister Magdalena Andersson, concern the financial sector, the energy and transport sectors, dual-use goods as well as export controls and financing, visa policy and new targeted sanctions.
According to proposals submitted by the European Commission and obtained by EUROPE, the EU will take additional measures in the financial field.
“We are now targeting 70% of the Russian banking market, as well as the main state-owned companies, including in the field of defence”, announced the President of the European Commission, Ursula von der Leyen.
Lending to and buying securities from new private banks will be reportedly prohibited - an expansion of the current ban on refinancing for five public institutions to include two additional private banks: Alfa Bank and Bank Otkritie.
It will also reportedly be forbidden to initiate a new listing of shares of Russian state-owned companies on EU stock exchanges. The companies targeted are reportedly Almaz-Antey (aerospace and defence), Kamaz (automotive), Novorossiysk Commercial Sea Port and Sovcomflot (maritime transport), Rostec (subsidiaries mainly in the military sector), Russian Railways (infrastructure), Sevmash, and United Shipbuilding Corporation (shipbuilding).
The EU also wants to cut off financial flows from Russia to the EU by banning the acceptance of new deposits of more than €100,000 from Russian nationals and residents in EU banks, prohibiting EU central securities depositories (CSDs) from holding accounts of Russian customers, and banning the sale of euro-denominated securities to Russian nationals and residents.
While the Ukrainians, with the support of several European leaders, demanded that Russia be excluded from the Swift financial system, such a measure is not part of the adopted package.
“The suspension of Swift will affect the Russian Federation less than it would the EU, because Russia has its own payment system and would immediately switch to Chinese payment systems”, explained Austrian Chancellor Karl Nehammer. According to the Dutch Prime Minister, Mark Rutte, “more work needs to be done on the issue to assess what will happen if Swift is cut off. We need to be sure to assess all eventualities”.
In the energy sector, the Europeans will ban the export of specific refining technologies from the EU to Russia. According to the President of the European Commission, refined oil brought in €24 billion in export revenues in 2019 for Russia, and the equipment needed to refine oil comes from Europe and cannot be replaced.
In the transport sector, the Heads of State or Government took the decision to ban the sale of all aircraft, spare parts and equipment to Russian airlines. “Three quarters of Russia’s current commercial air fleet was built in the European Union, the United States and Canada. They are therefore massively dependent on them”, said Ursula von der Leyen, saying that this would lead the country’s economy and connectivity to “deteriorate”.
The Europeans are also expected to adopt new restrictions on dual-use goods and advanced technologies. “We will cut off Russia’s access to the important technologies it needs to build a prosperous future - like semiconductors and advanced technologies”, Mrs von der Leyen warned.
In terms of visas, the EU will reportedly suspend visa-free travel for holders of Russian diplomatic passports and visa facilitation for Russian officials holding service passports.
Finally, the Europeans are expected to adopt additional targeted sanctions, including against members of the Duma who have not yet been sanctioned, members of Russia’s National Security Council, and Belarusians who facilitated the invasion of Ukraine.
The European Council also called for the urgent drafting and adoption of a new package of individual and economic sanctions to be applied to Belarus, strongly condemning the country’s involvement in the aggression.
Asked about sanctions against President Putin and Foreign Minister Sergei Lavrov, Dutch Prime Minister Mark Rutte said there was a “near consensus” to include them, but that it was necessary to be sure that this would not prevent them from participating in a dialogue.
A proposal to broaden the current criteria for imposing sanctions should also be presented to identify new forms of support for the Russian regime, including oligarchs.
According to an EU diplomat, the legal texts will be finalised overnight, and the Member States’ ambassadors to the EU (Coreper) will meet on Friday morning to give their approval. A Foreign Affairs Council is expected to be held in the afternoon to formally approve the measures.
Mrs von der Leyen said that the restrictive measures had been decided in consultation with the Allies, the United States, the United Kingdom, Canada, and Norway, as well as with Japan, South Korea, and Australia.
Despite the importance of the sanctions, Luxembourg Prime Minister Xavier Bettel was pessimistic that they would have an impact on the Russian president’s decisions. “When they are in place, will they really be felt by Russia? It can take days, weeks. But this is the only solution we have for the moment”, he acknowledged.
However, Mr Bettel warned that the Europeans were not ruling out working on a third package of sanctions.
Leaving the door open for dialogue
If Mr Putin “has made a deliberate choice” to go to war, French President Emmanuel Macron said it was necessary to “keep the channels open so that, as soon as possible, a ceasefire can be reached and hostilities stopped”.
But for the Finnish Prime Minister, Sanna Marin, Mr Putin is not the kind of leader with whom it is possible to negotiate.
The European Council also invited the European Commission to propose urgent measures to mitigate the impact of the sanctions in the European Union. Mr Macron announced the rapid adoption of measures, particularly for energy prices, “so that European citizens and businesses are fully protected”, and for democracy, “with initiatives on cybersecurity and the fight against disinformation”.
EU leaders also asked the European Commission to work on how to cushion the impact of the package on the European economy, according to Spanish Prime Minister Pedro Sanchez, who again called for a thorough reform of energy pricing in the EU.
Support for Ukraine
The EU also pledged to continue its support for Ukraine and its people with its international partners, including through additional political, financial, humanitarian and logistical support and an international donor conference. To the press, Mr Macron announced that France would contribute €300 million to the Ukrainian economy.
While the conclusions do not refer to military assistance, several leaders have called for such assistance. “The Baltic countries, Poland, and others are supporting Ukraine militarily. They are fighting back, and we must give them the tools and ammunition to resist. This is our moral right as peaceful democracies”, stressed Arturs Kariņš, the Latvian Prime Minister.
And while some Member States called for a clear perspective concerning membership for Ukraine - Poland and Slovenia even went so far as to call for membership by 2030 - the leaders confined themselves to recognising “the European aspirations and European choice of Ukraine, as stated in the Association Agreement”.
Zelensky disappointed
Despite the support of the Europeans, the Ukrainian President, Volodymyr Zelensky, regretted, at the end of his meeting with the European leaders by video conference, that Kiev had been “left alone” to face the Russian army. “Who is ready to fight with us? I don’t see anyone. Who is prepared to give Ukraine a guarantee of NATO membership? Everyone is afraid”, he denounced in a video.
See the European Council conclusions: https://aeur.eu/f/ic (Original version in French by Camille-Cerise Gessant, Thomas Mangin and Lionel Changeur, with the editorial staff)