Germany joins Poland and Baltics in push for harsher Russia sanctions

Hawkish EU member states are pushing for hard-hitting measures against Russia, including ejecting more banks from the Swift messaging network and banning diamond imports, as the bloc drafts a new round of sanctions over the Ukraine war.

Countries including Poland and the Baltic states are demanding the new measures — which would also target luxury goods and Russia’s IT, cyber security and software industries — in response to Vladimir Putin’s military escalation this week.

Germany is also pushing for tougher sanctions. It has circulated a proposal calling for a bar on EU companies providing finance to metal and rare-earth mines in Russia, a ban on imports of uranium from the country and further action against banks and individuals. It also wants EU countries to stop exporting specialist coal used to refine oil in Russia.

However, officials said it would be difficult to find consensus among all 27 member states, while Hungary has said it does not want any new sanctions at all.

The main goal of the European Commission is to push through a hard-fought G7 agreement to cap the price of Russian oil following months of US-led negotiations.

Commission president Ursula von der Leyen said on Wednesday that new sanctions were needed to respond to Russia’s decision to begin a partial mobilisation and initiate moves to annex parts of eastern Ukraine. But some officials think it will be difficult to get anything more than a limited set of penalties past all EU member states.

A potential new set of penalties, which would be the eighth round of sanctions, has yet to be formally tabled after meetings between commission officials and representatives of member states beginning on Friday. It is expected to contain legislation to implement the cap on the price of Russian crude, more listings of sanctioned individuals and measures targeting Russia’s IT, cyber security and software industries, officials said.

The EU’s last attempt to pass a big sanctions package in May descended into public acrimony and weeks of infighting as countries led by Hungary refused to agree on an embargo on Russian oil until being granted an exception that would allow their refineries to continue importing.

Hungary’s prime minister Viktor Orbán told a private meeting of his Fidesz party on Wednesday that the EU’s existing sanctions against Russia should be scrapped, according to local media reports. The ruling party on Thursday said it planned a “national consultation” on whether Hungarians supported the EU sanctions.

Despite these internal signs of opposition, diplomats in Brussels point out that Budapest has so far backed all the rounds of restrictions against Moscow and that the eighth is likely to have a significantly lower impact on the Hungarian economy than the oil embargo.

Those countries most adamant that the EU needs to increase pressure on Moscow, including Poland and the Baltic states, have circulated detailed measures they believe the commission should support. Their ideas include a ban on imports of diamonds, which would hit Belgium, ejecting more Russian banks from the global Swift network, curbing the availability of IT and other services to Russia, and applying all the same sanctions against Belarus, an ally of Moscow in the war.

But officials played down the prospect of a deal on some of the more ambitious ideas as some countries argue that existing sanctions need more time to work. Unanimous consent is required for the EU to implement them.

“The more you put in, the more reason you give some member states to be difficult,” said one EU diplomat. “The flipside is that if there’s too little, the hawks will say this doesn’t go far enough.”

Another diplomat said the oil price cap should remain the focus of the new round, along with closing loopholes. “There are not many products left to hit as we have mostly decoupled from the Russian economy,” the person said.

“I don’t know if we will get very far with announcing new sanctions without proper consulting,” said one EU official about von der Leyen’s comments, adding that building a consensus would be hard before a meeting of EU leaders in Prague in two weeks.

The goal, according to two people briefed on the talks, is for EU ambassadors to discuss a draft set of new sanctions next week as Brussels seeks to respond to Putin’s decision on Wednesday to call up reserves and threaten nuclear warfare in a speech.

A commission spokesman said on Thursday that EU foreign affairs ministers had been “discussing the next possible restrictive measures that could be applied”, adding that talks on the sidelines of the UN General Assembly in New York were “ongoing”.

A new round would focus on further sanctions on Russian individuals and organisations as well as possible additional export controls on “civil products”, the spokesman added. “That would be justified seeing as Russia is moving towards a wartime economy.”