European leaders meeting into the early hours of Friday hammered out an agreement over a new set of sanctions that they said would hurt the Russian economy and put President Vladimir Putin under tremendous pressure as his troops advanced in their invasion of Ukraine.
The bloc’s 27 members had been able to push out a first set of sanctions on Wednesday in response to Putin’s recognition of separatist enclaves in Ukraine, and they did so in record time. But the second package of penalties, which they described as unprecedented for the European Union in terms of size and reach, was harder to forge consensus on, even as Russian forces approached Kyiv, Ukraine’s capital.
Two diplomats familiar with the draft sanctions said that the European Union would freeze the assets of Putin and his foreign minister, Sergei Lavrov, but will not impose a travel ban on them.
The more the European Union leans into Russian sanctions, the more its own members will feel the pain, as their economic interconnectedness runs deep and across several sectors, and the bloc is only just staging a recovery from the pandemic recession that it can ill afford to abandon.
Experts said that the sanctions approved were tough, and that the speed at which the European Union was moving was impressive. But they said that in view of how dramatic developments were in Ukraine, the leaders could have gone further, especially in severing Russia from the international financial transactions system known as SWIFT, which EU leaders said they could consider at a later stage.
President Volodymyr Zelenskyy of Ukraine was scathing in a statement posted on Facebook on Friday morning, after the summit. “This morning, we are defending our state alone,” he said. “Like yesterday, the world’s most powerful forces are watching from afar. Did yesterday’s sanctions convince Russia? We hear in our sky and see on our earth this was not enough.”
The European Commission, the bloc’s executive branch that carries out the painstaking technical work behind sanctions, had been for weeks preparing this set of penalties. The commission’s president, Ursula von der Leyen, said Friday morning that the sanctions would hit the Russian economy’s ability to function by starving it of important technology and access to finance.
“Now we have to meet the moment. We will hold the Kremlin accountable. The package of massive and targeted sanctions European leaders approved tonight clearly demonstrates that,” von der Leyen said after the meeting, which had started Thursday evening and ran for six hours.
“It will have maximum impact on the Russian economy and the political elite,” she added.
The European Union will ban the export of aircraft and spare parts that are necessary for the maintenance of Russian fleets. von der Leyen said that three-quarters of the aircraft in the Russian aviation fleet were made in the European Union, the United States or Canada, and these measures effectively meant many would soon be grounded.
The bloc will also ban the export of specialised oil-refining technology as well as semiconductors, and it will penalise more banks — although it will stop short of targeting VTB, Russia’s second-largest bank, which is already crippled by American and British sanctions, according to a draft describing the penalties seen by The New York Times.
And the European Union will target Russian elites further by cutting diplomatic and service passport holders’ access to EU visas, and by limiting Russian nationals’ abilities to make new financial deposits over 100,000 euros (about $112,000) into European bank accounts.
EU leaders blessed the sanctions package at their meeting, but its details and legal language remained to be worked out on Friday by EU ambassadors and foreign ministers.
Still, there were elements missing that several European member states, as well as the United States and Ukraine itself, would have liked to have been included.
One such measure was cutting Russia’s access to SWIFT. EU officials said one key reason for their reluctance to cut Russia’s access to the global financial platform was that Europe uses it to pay for the gas it buys from Russia — a double whammy of dependence — and the disruption would cause the bloc major problems.
But the United States and Canada had been prepared and eager to take this step, and Ukraine’s foreign minister, Dmytro Kuleba, pleaded for it Thursday, but the European Union baulked.
President Joe Biden said the measure was not off the table. “It is always an option. But right now, that’s not the position that the rest of Europe wishes to take,” he told reporters Thursday when asked why the United States had not cut off Russia from SWIFT as part of its own sanctions package.
Prime Minister Mark Rutte of the Netherlands, who has taken one of the hardest lines among EU leaders on imposing sanctions on Russia, said that he and others had been pushing for SWIFT to be included.
“Many colleagues pleaded for SWIFT,” he said, adding, “But we agreed more work needs to be done to assess what it means if Russia is cut off from SWIFT.”
While Britain took long-discussed steps to penalise oligarchs on Thursday, EU Union leaders, under pressure from allies to do the same, instead agreed to change the legal language in the sanctions package in order to be able to take such a step in future.
The sanctions levelled on the Russian economy by the European Union were set to hurt both sides. That is why they were harder to finalise, and why particularly difficult elements — like imposing sanctions on oil and gas companies — stayed off the table.
The way Europe’s sanctions against Russia were shaping up highlighted that some EU countries, most prominent among them Germany and Italy, preferred an incremental approach to penalising Putin, in part to protect a fragile post-pandemic economic recovery in Europe.
On the other side were countries neighbouring Russia and Ukraine, including Poland, Estonia, Latvia and Lithuania, as well as the EU’s Nordic members and the Netherlands. They would prefer not to break up the sanctions into smaller packages but rather hit Putin with overwhelming economic measures.
Prime Minister Mateusz Morawiecki of Poland spoke for many of them in a blunt statement as he arrived at the meeting in Brussels on Thursday evening.
“Talking is cheap. Enough of this cheap talking, there’s enough of naïveté around us, triviality,” he said. “We are buying as Europe, as the European Union, lots of Russian gas, lots of Russian oil. And President Putin is taking the money from us, Europeans, and he’s turning this into aggression.”
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