Putin ally Orban blocks Europe’s oil embargo on Moscow

Hungarian Prime Minister Viktor Orban – a longtime ally of Russian President Vladimir Putin – has said ending Russia’s oil purchases would be an “atomic bomb” on Hungary’s economy.

Attila Kisbenedek | Afp | Getty Images

The European Union is struggling to approve a sixth round of sanctions against Russia, with a few countries pushing back on a proposed oil embargo.

The European Commission, the executive branch of the EU, has proposed a six-month phase-out of Russian oil as part of wider measures aimed at harming President Vladimir Putin’s regime. Hungary and Slovakia – two EU countries heavily dependent on Russian energy – were given until the end of 2023 to comply with the new rules. However, this extended period was not enough and both countries are demanding more.

The deadlock prevents the EU from adopting the broader package of sanctions.

Hungary is the EU’s most vocal opponent of the oil ban. Prime Minister Viktor Orban – a longtime ally of Putin – has said ending Russia’s oil purchases would be an “atomic bomb” on Hungary’s economy.

“The proposal now on the table creates a Hungarian problem and there is no plan to solve it,” he said, according to a press statement last week.

Budapest is also a buyer of Russian natural gas, as it has increased imports from Moscow in recent years. According to Eurostat, Hungary has increased its imports of Russian natural gas from 9,070 million cubic meters in 2010 to 17,715 million cubic meters in 2019.

Orban had so far largely supported EU sanctions against Russia for its invasion of Ukraine. This is despite Orban forging strong economic ties with Russia over the past decade and often boasting of his close relationship with Putin.

For example, their close ties were on display during the coronavirus pandemic. Hungary became the first EU country to buy a Russian-made Covid vaccine – even though it was not approved by European regulators.

An EU official, who declined to be named due to the sensitive nature of the talks, described Hungary’s “stubbornness” as a “sad thing,” speaking to CNBC Monday.

A second EU official, who also declined to be named due to sensitive negotiations currently underway, told CNBC that EU ambassadors would try again on Tuesday to break the deadlock.

More broadly, the difficulty of getting through these sanctions raises questions about what would happen if there were also a proposed ban on Russian natural gas, when the EU were even more dependent on that commodity.

“I can assure you that Europe will get out of Russian oil and Europe out of Russian gas. The only thing is that it can’t happen overnight,” Austria’s foreign minister Alexander Schallenberg told CNBC on Saturday. .

He also said the EU is “less divided than public opinion might seem” and added that the bloc should keep in mind “the Russians are watching us and the Chinese too” when making decisions about foreign policy.

In the meantime, the G-7 announced on Sunday that it is committing to ending dependence on Russian oil, and the United States went so far as to impose sanctions on executives of Gazprombank and other Russian companies.

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