Brussels: Europe and the Arabs

A frantic race is underway to finalize the EU sanctions package as the European Commission strives to salvage a key part of the 21st round of sanctions imposed by the bloc on Russia, according to four European diplomats. This comes after Greece argued that the proposed ban on Russian liquefied natural gas (LNG) transit would have a devastating impact on its shipping industry. The Brussels-based Playbook, the European edition of Politico, reported:

The European Commission is analyzing the economic impact of the ban to present at Tuesday's Antisis meeting, a forum designed to help diplomats prepare for the Coreper meetings at the ambassadorial level. The diplomats explained that this analysis will inform Wednesday's meeting of EU ambassadors, which is considered crucial to the fate of the sanctions package.

The objective: to demonstrate that the ban will be more economically damaging to Russia than to Greece, and that it will not be easy for energy transport companies to circumvent it by changing their flags to avoid EU measures. A crucial issue: Athens' objections could derail a key part of the EU's 21st sanctions package, designed to be robust in an attempt to end Russia's war against Ukraine. But, as a last resort, the EU might grant Greece an exemption, according to two diplomats. The European Commission declined to comment.

On the brink: "We are trying to find a way out of this predicament, but what this issue [with Greece] shows is that we are beginning to run into some major economic interests," said one of the diplomats, who, like others, was granted anonymity to discuss the confidential sanctions procedure.

From Athens: Greece is demanding that the Commission prove that a ban on liquefied natural gas (LNG) transit would cost Russia significantly more than it would cost Greece, and that it would not pave the way for third-party competitors to replace Greek shipping companies, according to a senior Greek official.

The response: Other countries have already suffered the consequences of cutting economic ties with Russia, notably Germany, which relied on Russia for more than half of its gas imports before 2022.

Other issues have been settled: Austria will no longer oppose the package after receiving a proposal from the European Commission regarding Raiffeisen Bank. This will be discussed in the coming months, according to two diplomats, who also indicated that the package is likely to include a proposal to freeze the price ceiling on Russian oil.

In short: Greece’s objections have been widely heard by other EU capitals. But given the economic price other countries have already paid as a result of the Russian sanctions, exempting Athens from these sanctions “would send the wrong signal,” said another European diplomat.