EU Leaders Agree On Russian Sanctions Till Year-End

From the first day of the summit of EU leaders in Brussels, the message resonated loudly: there seems to be one single front against Russia and toward the creation of the Energy Union, while a widespread criticism over the European approach to the Greek saga emerged amid tensions. 

For once, energy seems an easy thing. As demonstrated by European Council Donald Tusk’s speech on Thursday evening, European approach to energy issues did not bring along any grim faces, and Brussels remains committed to lightheartedly maintain sanctions on Russia. 

“Leaders decided to align our sanctions regime to the implementation of the Minsk agreements brokered by Chancellor [Angela] Merkel and President [François] Hollande. The European Council agreed that the duration of economic sanctions will be clearly linked to the complete implementation of the Minsk agreement, bearing in mind that this is only foreseen by the end of 2015” he noted, adding that European authorities could put additional pressure on Russia “whether necessary”. 

Tusk also reported that European leaders agreed to confront Russia in the communication arena, stepping up efforts to counter narratives presented by Russian media about the conflict in Ukraine.  

“The High Representative will prepare an action plan on strategic communication for the June European Council” he said, reiterating Brussels’ commitment to assist Ukraine both politically and financially. 

In this sense, Kiev gained the upper hand, and Ukrainian requests have been satisfied. 

"If [Russian President Vladimir] Putin destroys the unity between the EU member countries and between the EU leaders, it will be the largest success for President Putin. But it will be a disaster for the European Union” Prime Minister of Ukraine Arseniy Yatsenyuk commented on Thursday morning, after his meeting with Tusk. 

The European intentions emerged clear earlier on Thursday, when Lithuania’s President Dalia Grybauskaitė commented that sanctions against Russia would not be dropped unless Russia implements the Minsk agreement. She also said that Europe should not ease its stance ‘until Ukraine regains full control of its borders.’

FIRST DOUBT: TRANSPARENCY OF DEALS 

“The European Union depends more and more on gas from external suppliers… Most of the bilateral contracts with our dominant supplier - Russia - are concluded on a long term basis, sometimes more than 20 years. That can be unhealthy, both for our security and our market” Tusk said, adding that contracts should be flexible and in line with European laws.

Before speaking about the sanctions against Russia, the Polish politician said that the European Council focused on the apt mechanisms for a full implementation of existing energy legislation. He also referred to ways to increase transparency of energy deals that might affect Europe’s security. 

He explained that the European Commission will work on draft legislations, but he did not elaborate on such instruments. 

In this sense, the timing and the consequences of his remarks remain unclear. When and how will they be implemented? What does it mean in practice? Tusk simply said that European authorities will work on the Energy Union, and the European Council will come back to the issue before December. Time will tell the rest.  

SECOND DOUBT: IS HUNGARY'S OPPOSITION MAGICALLY DISAPPEARED?

Another question mark has to do with the confidentiality of the deals. 

According to a document published on the European Council’s website, ‘as regards commercial gas supply contracts, the confidentiality of commercially sensitive information needs to be guaranteed.’ 

Tusk did not speak about this point during his speech to the media. 

Earlier this week, reports indicated that Germany and Poland had/have opposite positions, with Warsaw asking for clarity on the negotiations recently held by German and Russian companies. Similarly, over the last days, Hungary had voiced some discomfort with European intentions to force member states to report energy negotiations since early stages. 

All at a sudden, on Thursday, it seemed that these frictions magically disappeared, but it is unlikely that these simmering tensions will remain silent for much longer.  

COLLECTIVE GAS BUYING & GREECE 

At the beginning of his speech, the former Prime Minister of Poland said that gas contracts should not be used as political weapons, and adhere to market principles. However, in a contradictory turn, he then opened the doors to collective gas purchasing.  

“We agreed to explore how European companies could voluntarily join up and buy gas from external suppliers, and also how to achieve strategic partnerships with countries that are increasingly important for the production and transit of energy” Tusk stated. 

Despite the inconsistency, the message is clear: Europe will not contravene its ideology, unless Russia will drift away from its commitment. In that case, Brussels would resort to the most obvious tit-for-tat reactions. Meanwhile, European authorities will continue their work to increase energy security, promoting interconnectors to peripheral regions and to the Iberian peninsula. 

In this context, the Greek debt is the only political pain that could weaken European focus on energy.  

Earlier on Thursday, some heads of state did indeed oppose the closed-door meeting of Germany’s Angela Merkel, France’s Francois Holland, Greece’s Alexīs Tsipras, and President of the European Council Donald Tusk. According to a press conference in the afternoon, “several leaders” demanded and obtained the participation of European Parliament’s President Martin Schulz at the meeting about Greek debt held around 11 pm on Thursday.

Sergio Matalucci 

Sergio Matalucci is an Associate Partner at Natural Gas Europe. Follow him on Twitter: @SergioMatalucci