European Union

On Energy, the EU Is Stuck Between a Rock and a Hard Place

On Wednesday, I asked whether the EU’s proposed embargo on Russian oil – to be phased in over the next six to eight months – really makes sense.

It now seems the proposal may be dead in the water, as Hungary has said it will exercise its veto. Speaking to the BBC, the country’s Secretary of State for International Communication and Relations described the proposal as “unacceptable”, claiming it would “ruin the Hungarian economy”.

Prime Minister Viktor Orban, who compared the proposal to dropping an “atomic bomb” on the Hungarian economy, said his country would need five years to transition away from Russian oil, adding that one and half years is “not enough for anything”.

As the FT explains, oil imported from Russia isn’t refined in the same way as oil imported from other sources, so massive investments would need to be made in Hungary’s refineries to process the new oil. Hungary currently gets 65% of its oil from Russia, as well as 85% of its gas.

According to Reuters, Orban also questioned “whether it was wise to make investments on that scale for a result in four to five years time, while the war in Ukraine was happening now”. As I noted in my post on Wednesday, the proposed embargo is unlikely to have much impact on the war itself.

Does the EU’s Oil Embargo Make Sense?

This morning, EU Commission President Ursula von der Leyen announced the EU’s sixth ‘sanctions package’ against Russia. The proposed measures include banning Russian media from broadcasting in Europe and disconnecting more Russian banks from the SWIFT payment system.

However, by the far the most consequential measure announced was a complete embargo on Russian oil.

“We will make sure,” von der Leyen explained, “that we phase out Russian oil in an orderly fashion.” Specifically, crude oil imports are to be phased out “within six months”, while imports of refined products will stop “by the end of the year” – so that’s the end of October for crude oil and the end of December for refined products.

Although von der Leyen didn’t mention any exemptions, an “EU source” told Reuters that Hungary and Slovakia – two countries that are heavily dependent on Russian oil – will have until the end of 2023 to phase out imports. (Slovakia currently gets 96% of its crude oil from Russia.)

Does this far-reaching policy make sense? Perhaps. But there are several potential downsides that need to be factored in.

First, given the proposed timeframe, it won’t have much impact on the war itself – unless the fighting continues past the end of 2022. In my podcast debate with Konstantin Kisin, he argued the only realistic goal for sanctions is reducing Russia’s capacity to wage war (prompting a withdrawal or fomenting regime change simply aren’t on the cards.)

So even if you believe sanctions are the right approach (something of which I’m sceptical), an embargo that’s phased in over six to eight months isn’t going to have much impact.

The stated reasons for this extended timeframe were twofold: allowing EU countries to “secure alternative supply routes”, and minimising “the impact on the global market” (i.e., making sure the price of oil doesn’t skyrocket). Of course, by the same token, it leaves Russia with plenty of time to find alternative buyers.

Ursula von der Leyen Says It’s Time to Discuss an E.U. Wide Mandatory Vaccination Law

Ursula von der Leyen, the President of the E.U. Commission, has said that it is “potentially time to think about how we can have mandatory vaccination within the European Union”. Although von Der Leyen reiterated that member states can decide their own Covid response measures, including whether to make vaccination compulsory, she spoke of her concern that 1/3 of Europeans, roughly 150 million, are currently unjabbed which, she claims, is carrying “an enormous health cost”. MailOnline has the story.

Von der Leyen’s comments come after Austria announced plans to make vaccines mandatory for all eligible citizens by February, with an aide to incoming German Chancellor Olaf Scholz saying yesterday that he wants to follow suit.  

Europe is currently in the midst of a wave of Covid cases that has seen restrictions return across the continent amid fears of another Christmas spent in lockdown.

Adding to those fears is the emergence of the new Omicron variant which is thought to be more infectious than the Delta strain, and has been detected in Europe. 

Von dey Leyen was speaking at a press conference to discuss what measures the E.U. is taking to combat these dual threats.

She said the European Union has enough booster shots for every fully vaccinated adult to get one, urging people to take it within six months of their last jab.

Pfizer vaccines will also be available for children as young a five within the next two weeks after the European medical regulator approved it, she added.

Measures such as masks, hand hygiene and social distancing are also being used she said, but “full vaccination and boosters provide the strongest protection against Covid that is available now.”

Asked by a journalist whether she supported making vaccines mandatory for everyone, she replied: “First of all, this is pure member state competence. It is therefore not up to me to give any kind of recommendation.”

“[But] if you’re asking me what my personal position is, two or three years ago I would never have thought to witness what we see right now. 

“That we have this horrible pandemic, we have the lifesaving vaccines, but they are not being used adequately everywhere, and thus this is an enormous health cost.

“If you look at the numbers we have 66% of whole E.U. population vaccinated, which means we have one third of the population which is not vaccinated. 

“This is 150million people – that is a lot. Not each and every one could be vaccinated, these are very young children and people with medical conditions, but the vast majority could.

“Therefore I think it is understandable and appropriate to lead this discussion now, how we can encourage and potentially think about how we can have mandatory vaccination within the European Union. 

“This needs discussion, this needs a common approach, but it is a discussion that I think needs to be had.”

European leaders have been targeting the unvaccinated with measures since the winter wave of infections began picking up speed last month.

Countries including the likes of Italy, France and Germany tightening rules around their health passes to deny unjabbed people access to public spaces. 

France has also introduced ‘expiry dates’ for its passes that mean adults who have not had a booster within the last seven months will be penalised. 

Austria went the furthest, initially locking the unvaccinated in their homes before reversing that policy with a full lockdown and announcement that jabs would be mandatory for all. 

Worth reading in full.