N. Peter Kramer’s Weekly Column
The philosophy of sanctions is that they should hit another country rather than causing harm to your own country. We have seen that for instance with Iran, Venezuela, North Korea and many others. EU sanctions policy has mostly followed that of the US. However, with economic sanctions against Russia it is quite different.
The EU is following the US again, but unlike the US with its own abundant resources, in the case of Russia many economic sanctions inevitably cause damage to EU countries; some being hit more than others. Therefore the EU has decided that financial damage control has to be in order. In ‘Brussels’ an amount of €200 billion has been mentioned.
EU sanctions in the field of energy especially bring problems for many member states. The EU’s Russian energy imports were worth €99 billion in 2021, Russian oil accounting for 27% of EU oil imports. Technically, oil imports from Russia are easier to replace than gas imports, however rising oil prices are already adding to rapidly growing inflation across the EU.
Some member states have floated the idea of considering delaying the ban on oil to proceed with the rest of the sanction package, but this has been opposed so far since it is believed that the measures would ‘lack teeth’ without the energy component. Opposition by Greece and Cyprus to the Brussels plan to ban EU ships from transporting Russian goods due to the economic impact on their industries has already been successful.
In the meantime, it seems that the subject ‘oil ban’ will be a ’Chefsache’ , meaning it would have to be discussed among the EU leaders themselves rather than on a lower political level.
Was Russian President Vladimir Putin right when he recently said that the continually rising high energy costs are weakening industrial competitiveness in the EU? He called it ‘committing economic suicide with energy policy’.
Anyhow, it looks as though Europe will become the region with the highest energy costs in the world for a long time to come.
