- A campaign for the European elections, which will result in the renewal of the EU institutions in 2024, has effectively kicked off in the EU. Following the latest address in the European Parliament by the President of the European Commission Ursula von der Leyen, the media started reporting that she had de facto launched her election campaign for a second mandate as head of the European Commission. Should we expect the renewed European Parliament, European Commission and the new head of the European Council to change or adjust the EU's policy on Russia?
- There are no objective grounds for substantive changes in the general EU policy on our country either in the short or medium term. The ongoing demonisation of Russia continues at full speed.
Given the heightened anti-Russian sentiment firmly entrenched in Brussels' European quarter, the emergence of politicians who would dare to challenge the mainstream is unlikely. All the more so if the present head of the European Commission retains her post, she will definitely not allow the European Commissioners to deviate from the current course with regard to our country.
The President of the European Council, whoever he or she will be, traditionally voices the generalised mood. And it is likely to remain largely pro-Ukrainian in the member states.
The public dissatisfied with their socio-economic situation may influence the future composition of the European Parliament. However, this still does not mean that MEPs will be able to make a sober assessment of the consequences of anti-Russian sanctions for the EU.
- Hungary will hold the presidency of the EU Council in the second half of 2024. Can we expect this presidency to roll back the EU's anti-Russian agenda? Why does the Hungarian presidency scare the European Parliament so much that they urge the European Commission to intervene and deprive Budapest of the opportunity to lead the EU Council for six months?
- Judging by the statements of the Hungarian leadership, the current EU policy towards Russia, especially sanctions, seriously affects Budapest's national interests. Let us not speculate how Hungarians will manage to cope with such a dilemma while holding the rotating presidency. It is also important to realise that the anti-Russian agenda in the European Union is shaped by the collective decisions of the European capitals, and not so much by the presiding country in the EU Council. Therefore, we cannot speak of any possible rolling back in broad terms.
The European Parliament's concerns about the Hungarian Presidency reflect internal EU tensions: Hungarians are under serious pressure, which is primarily due to their dissenting opinions on a number of EU domestic and foreign policy issues.
- The EU as a whole and at the level of individual countries faces serious difficulties in African countries, both in political and economic relations, and in migration issues. Yet Brussels voices its intention to significantly increase its co-operation with the continent. What would your assessment be of the EU performance in recent years in the region?
- We tend to believe the confession made by the head of European diplomacy Josep Borrell, that the EU policy in Africa has not been successful. The main reason thereof is, in our view, obvious – Brussels is unwilling to abandon the neo-colonial practices used by the West, which include financial and economic pressure on African countries, the aggressive promotion of neo-liberal policies, and the extortion of natural, economic and intellectual resources from former colonies. This policy has also provoked the migration crisis, which risks becoming a major test for the strength of the entire European Union.
The EU's intention to give a new impetus to co-operation with Africa will remain a beautiful slogan until Brussels offers Africans to build relations on a mutually respectful and equal basis. In the meantime, we see the EU simply looking for someone to blame for its own mistakes.
- Another heating season is approaching, causing – as usual – concerns in the EU. In August, the Member States increased gas consumption for the first time in the last 9 months. Reports have emerged that Europe is gradually and tacitly increasing imports of Russian LNG. Energy prices are rising. Can one predict how the situation will develop in the EU in case of a cold winter and shortage of gas reserves?
- Predicting how the EU will go through the heating season is a thankless job. It depends on a combination of factors: winter weather, the state of affairs in regional natural gas consumption markets (primarily in Asia) that compete with Europe, the stability of deliveries from EU suppliers, and the performance of local power generation, especially the "green" one. Despite the fact that the EU is ahead of schedule in fulfilling its annual obligations set at the height of the 2022 energy crisis to fill 90% of its gas storage facilities by 1 November 2023, the European Commission estimates that underground gas storage facilities can only cover up to a third of winter demand from European consumers, the rest of which will have to be covered by continuous supplies from abroad. At the same time, LNG is mainly supplied globally under long-term contracts; no significant additional volumes are available [on the market], and experts believe that they are unlikely to appear in the next few years.
Speaking about calls for a complete phase-out of Russian gas supplies, including LNG, this is impossible in the short term. The cancellation of gas purchase from Russia under the existing long-term contracts would entail serious financial costs for the EU Member States. Getting rid of the available Russian LNG against the shortage of supply backdrop will once again cause energy prices in the EU to skyrocket. Still, the European Commission is considering an option to give member states the right to impose restrictions on Russian LNG supplies in their national capacity. We will see how it all turns out – the winter is coming.
- The G7 countries, followed by the EU, intend to announce another round of sanctions against Russia in autumn, which are expected to include a ban on imports of Russian rough and polished diamonds. For this purpose, the West seeks to re-frame the entire global diamond market. In your opinion, how legitimate are such actions, are there any precedents, and can they create insurmountable obstacles for the export of Russian diamonds?
- The European Commission has not yet disclosed the specific parameters of possible sanctions against Russian rough and polished diamonds. Therefore, it is largely premature to assess how they may affect exports of such products from our country.
Possibly, they may propose the creation of a mechanism parallel to the Kimberley Process, which would be aimed at preventing global trade in gems of a particular origin – be it Russia now or any other “undesirable” country in the future. Such an initiative, if implemented, would be discriminatory, contradict the rules of international trade and the foundations of the Kimberley Process, actually aim at its collapse, and carry serious risks for the functioning of global supply chains. The standing of a number of developing countries involved in these chains, primarily diamond cutting centres, may also be affected. Such Western plans demonstrate once again its complete disregard for the interests of the states of the Global South.
- As part of the 11th "sanctions package", the EU introduced a so-called anti-circumvention mechanism, by which Brussels is now trying to put pressure on countries willing to or already successfully cooperating with Russia. How effective is this "fight" at the international level, when Brussels seeks to dictate to others who they should co-operate with? Can these actions eventually backfire and affect the EU foreign economic relations instead?
- Here come the European “double standards”. After all, Brussels has always insisted that the extraterritorial application of unilateral sanctions is contrary to international law. It used to criticise Washington for trying to impose its restrictive measures on third countries. As is well known, the EU still has the so-called "Blocking Statute" – a special regulation that prohibits its citizens and organisations from complying with certain US sanctions laws (against Cuba and Iran). Despite this, the "anti-circumvention tool" adopted within the 11th "package" actually legitimises extraterritorial application of the EU restrictive measures.
Obviously, this mechanism is nothing but a way to force third countries to join the economic war against Russia unleashed by the West. The latter applies both threats of negative consequences for them and unsupported purely opportunistic promises of investment and financial assistance. This is the pure and simple EU traditional approach to building relations – the "carrot and stick" principle. We are sure that many of our trading partners have already experienced first-hand or second-hand how all this ends for them.
- Recently, the European Commission published guidelines on sanctions that discriminate against Russian citizens and have de jure been in force for a long time. EU countries bordering Russia have already started to ban the entry of Russian vehicles and threaten to confiscate them. Why did the European Commission need to take this step, given that it cannot be justified by the stated purpose of the sanctions – to deprive Russia of its sources of income?
- By interpreting the restrictions as a way to force Russia to abandon its special military operation, Brussels rather targets its domestic audience. In fact, the logic behind the sanctions pressure against our country is quite different: to punish all Russians without exception for the fact that, contrary to Western expectations and forecasts, they retain a sense of dignity and do not intend to change their ideas about life and Russia's future under the influence of external circumstances.
- The EU countries widely discuss another topic – “frozen” Russian sovereign and private assets – threatening to confiscate them or use their proceeds. Russia is taking retaliatory steps, private investors are filing lawsuits and some have already got favourable court rulings. What scenario is likely to unfold in this matter? Can we say that a cautious approach on the part of the EU has prevailed?
- As for the blocked assets of the Russian Central Bank, the European Commission has not yet submitted its proposals for their use for "rebuilding Ukraine" due to well-founded concerns voiced by a number of Member States and the ECB. It is clear that stealing foreign sovereign assets or making "windfall profits" through their illegal circulation would undermine confidence in the European financial system.
Still, I would not say that a cautious approach to this issue has prevailed in the EU. Brussels has not yet given up the idea of confiscating the bulk of Russian state assets held in the EU at some point in the future - of course, under a fictitious international legal "cover". Another probable reason for not ruling out such a scenario is the generally deteriorating financial and economic situation in the EU itself and the unclear prospects for continued US support for Ukraine in the event of a possible change in the US administration.
As for the "frozen" private assets, here again the European Union is violating the basic principles of international and European law. Unilateral restrictive measures adopted bypassing the UN Security Council are illegitimate, and therefore the plans to confiscate assets from those who do not comply with the EU restrictions have no legal basis whatsoever. This, again, is nothing less than plain robbery.
- The disputes between Ukraine and EU Member States over Ukrainian grain have reached the WTO level. There is no accord on this issue within the EU either, and the European Commission is trying to push the countries of the community to obey frankly unfavourable conditions.
How may this situation threaten the EU's internal market and the touted European "unity"? Can we expect other countries (e.g. France, whose market is similarly oversaturated with Ukrainian chicken meat to the detriment of local farmers) to move against the EU policy in defence of their own interests?
- Indeed, one can hardly speak of a single market in the European Union when some European capitals impose national restrictions on the supply of products, while others follow Brussels' policy of lifting such measures. The situation when the European Commission makes decisions that do not take into account the real state of affairs in individual Member States and possible negative consequences for them cannot be called unity either.
Recently, the EU's political guidelines have been increasingly at odds with the economic interests of Member States and entire sectors of their economies. This trend has intensified along with the build-up of anti-Russian sanctions pressure. The latest conflict caused by Brussels' policy of providing comprehensive support to Kiev is the issue of increased imports of Ukrainian agricultural produce into the EU, which is a problem for Bratislava, Budapest and Warsaw. And they are not the only ones who may acutely face the question of how long the European capitals are ready to suffer losses for the sake of "Kiev's fight for the fate of Europe".
- What would your assessment be of the situation with the supply of arms and ammunition from the EU to Ukraine, to what extent does Brussels manage to fulfil its promises and implement the plans to increase production? How does this affect the general state of the economy and finances in the EU, given the increase in defence spending?
- One would not say that "everything is going according to plan" for the European Union in this matter. Brussels have rushed to make promises and sent the appropriate instructions to the European capitals. However, this implies the need to put the economy of the European integration project on military rails. I am sure that many people in Europe are not only unprepared for such a thing, but also silently ask themselves a reasonable question as to why all this is necessary, how the main tasks of the European Union – ensuring high socio-economic well-being of the population and increasing competitiveness of the bloc – correlate with the militarisation of its economy. Hence, with the exception of the military-industrial complex, no one here is in a hurry to produce new weapons and empty the existing stockpiles.
Higher defence spending was obviously not part of the EU's plans, so it will have to temper its ambitions even in those areas that should ensure a qualitative leap in the development of European integration, in particular the "green" and digital transitions. However, much of what Brussels is doing today in the economic and financial spheres is aimed at achieving its main political priority – providing comprehensive assistance to Ukraine and "inflicting a strategic defeat on Russia".
- How many more sanctions "packages" can we expect? Does the fatigue with the EU's sanctions policy, whose effectiveness is doubted by many in the West, impact the situation?
- I would not say that the fatigue phenomenon is stable. Its degree varies unevenly among the Member States and depends on the dynamics of their domestic political life, especially the electoral cycles. It is not fatigue that may slow down the strengthening of sanctions pressure, but rather the growing differences that already exist or will emerge both in Brussels' relations with a number of European capitals and between Member States. Such disagreements are caused by the consequences of the anti-Russian sanctions, absolute alignment with the common European policy on Ukraine, especially the large-scale financial injections and military pumping of Kiev, as well as the failure to find consolidated responses to the current challenges and threats under the pressure of these and other circumstances.
