Hungary has an “unwilling” ally on the EU’s Russia sanctions front

Hungary has gained an unlikely ally as Greece has expressed skepticism over the latest EU sanctions against Russia. The EU is currently discussing an 11th package of sanctions against Russia after Moscow began its military campaign in Ukraine.

While the EU’s previous 10 sanctions packages focused on measures to curb Russian President Vladimir Putin’s “war chest”, in this 11th package, Brussels now wants to prevent sanctions evasion.

In an unprecedented move, the EU has proposed sanctions against third parties helping Moscow evade trade sanctions.

But two rounds of talks in Brussels last week ended without reaching any agreement, Politico reported on May 27, citing multiple anonymous diplomatic sources.

According to Politico, negotiations on the 11th package of EU sanctions against Russia have stalled due to opposition from Hungary and Greece because Budapest and Athens want their companies removed from a “blacklist” drawn up by the Kiev government.

The “international war sponsors” list, compiled and managed by the National Anti-Corruption Agency of Ukraine (NACP), targets foreign companies still doing business in Russia, including many individuals and companies with links to the EU, such as German wholesaler Metro, French retailer Auchan, Italian cement company Buzzi Unicem and Austrian banking group Raiffeisen.

World - Hungary has an — Hungarian Foreign Minister Péter Szijjártó (left) meets with Greek Foreign Minister Nikos Dendias in Athens, Greece, June 22, 2022. Photo: Shutterstock

Hungary was the only EU country to speak out against the latest sanctions package at a meeting of foreign ministers on May 22, expressing concern that Kiev’s accusations against OTP Bank – Hungary’s largest commercial bank – could be legitimized under the bloc’s next round of sanctions.

On May 24, Greece – which has five shipping companies on Ukraine’s blacklist – reportedly joined Hungary in saying that the sanctions evasion allegations could be “very damaging” to its economy .

“Greece reiterates that, if there is concrete evidence of sanctions violations, these should be reported to the relevant member states, at a technical level, so that this can be fully investigated and then appropriate action taken,” an EU diplomat familiar with the matter told Politico.

According to Politico, the aforementioned Ukrainian “blacklist” and the next round of EU sanctions are not related, and Athens and Budapest are simply delaying negotiations in order to gain political leverage to remove their companies from Ukraine’s list.

However, EU diplomats are reluctant to publicly name countries that are seen as deliberately stalling the talks, fearing that other member states whose companies are in Kiev’s crosshairs could do the same.

The EU's top diplomat, Josep Borrell, has acknowledged the problem and “he now has to work with the Ukrainians to find a solution,” Politico's source said.

It is not yet clear when EU diplomats will discuss the 11th package of sanctions again, but according to two of the diplomats, there is consensus in Brussels on one thing: The EU will eventually agree on a new package of sanctions.

Budapest has maintained a neutral stance on the conflict between Moscow and Kiev, refusing to provide military aid to Ukraine or allow Western aid to pass through its territory.

Although Hungary has largely joined in the current EU sanctions against Russia, it has repeatedly criticized the restrictions and opposed restrictions that would affect its own economy, including the energy sector.

Despite the bloc's efforts to cut economic ties with Russia, Athens has continued to import heavily from Russia, with imports more than doubling to a record €9.33 billion ($10 billion) last year.

However, the trade balance between the two countries in 2022 is negative, with the value of Greek exports to Russia falling to €156.4 million from €206.6 million in 2021 .

Minh Duc (According to Politico, RT)

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