Brussels, Versailles Under the impact of Russian bombing raids on Ukrainian civilians, the EU is tightening its sanctions. “Tomorrow we will take a fourth set of measures to further isolate Russia and deprive it of the resources it is using to finance this barbaric war,” Commission chief Ursula von der Leyen said on Friday after the EU summit in Versailles.
Among other things, the Europeans plan to suspend Russia’s rights as a member of the International Monetary Fund (IMF) and the World Bank. “We will ensure that Russia can no longer receive any funding, loans or other benefits from these institutions,” emphasized von der Leyen. “Because Russia cannot grossly violate international law on the one hand and expect to enjoy the privileges as part of the international economic order on the other.”
The advantages that Russia enjoys as a member of the World Trade Organization (WTO) are also to be abolished. This means that Russia will be stripped of its so-called most favored nation status. The new EU measures are closely coordinated with the G7 partners.
US President Joe Biden also imposed further economic sanctions on Russia on Friday.
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After the start of the Russian aggression, the EU decided on three packages of sanctions within a short period of time. The fourth was originally intended to primarily aim at plugging loopholes. But now it goes well beyond the announced steps.
The EU bans the import of “essential goods in the iron and steel sector from the Russian Federation”, as explained by von der Leyen. “This is a blow to a key sector of the Russian system, depriving the country of billions of dollars in export earnings and ensuring that our citizens do not unintentionally subsidize Putin’s war,” said the Commission chief.
EU also blocks exports of luxury goods to Russia
In addition, the EU wants to ban European investments in the Russian energy sector. “We shouldn’t increase our energy dependency – on the contrary: we want to leave it behind,” says von der Leyen. This ban extends to all investments, technology transfers, financial services for energy exploration and energy production.
The measures are supplemented by export bans on European luxury goods, restrictions on trading in cryptocurrencies and the establishment of a sanctions task force within the G7 framework, which aims to take action against the assets of Putin loyalists.
The EU has so far shied away from an import ban on oil, gas and coal. It is true that these raw materials are the Kremlin’s most important source of foreign exchange. Simone Tagliapietra, an energy expert at the Brussels think tank Bruegel, estimates that the EU pays Russia 600 million euros for gas and 350 million euros for oil every day.
But Germany in particular is reluctant to extend the sanctions against Russia to energy sources – out of concern for security of supply. “It is a conscious, justified and understandable decision that we will not stop the imports that we have in the energy sector in Europe today,” said Federal Chancellor Olaf Scholz in Versailles.
France threatens further “massive sanctions”
Europe is much more dependent on energy supplies from Russia than the USA and Canada, which have imposed import bans on Russian oil in the past few days. “What you are doing, you know, Europe cannot do in the same way,” said the Chancellor about the steps taken by the alliance partners.
The federal government is supported in the EU circle by Italy, Austria and Hungary. Open criticism comes from Eastern Europe and Scandinavia. “We are financing Russia’s war by buying gas and oil,” lamented Finnish Prime Minister Sanna Marin.
In any case, the last word on this matter has not yet been spoken. French President Emmanuel Macron announced at the end of the EU summit that the Europeans were prepared to “massive sanctions” in the event of a further escalation in Ukraine: “Nothing is taboo.”
More: Biden wants to suspend US trade relations with Russia