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Winter is coming - the Brussels sanctions jacket must be re-buttoned

Gyürk András
2022.09.30. 15:20 2022.09.30. 15:27
Winter is coming - the Brussels sanctions jacket must be re-buttoned

The European Union, in response to the war launched by Russia against Ukraine, has introduced a total of seven sanctions packages between 24 February and 21 July 2022, on the proposal of the European Commission. Since 8 April, the sanctions have been extended to the energy sector: a coal embargo was announced in the spring and an oil embargo in the summer, and Brussels has been threatening to impose a ban on Russian natural gas imports for months. Almost half a year after the measures were introduced, it is timely to examine their effectiveness. The reality of the situation is threefold: energy sanctions have backfired - the European economy has weakened and Russia's revenues have increased; Brussels bureaucrats have deceived European citizens and are now lecturing those who disagree with them; and the solution to the problems caused must start with the removal of harmful sanctions.

The World Economic Forum defines the main purpose of a sanction as "to punish the sanctioned country economically and, as a consequence, to change its behaviour". When the energy sanctions were introduced, the European Commission may have had a similar intention - to speed up the conclusion of the war by reducing Russia's revenues. 

In reality, the opposite was the case. Moscow has made EUR 158 billion, half of which has been paid for by Europe, in large part because of the surge in energy prices caused by the Brussels sanctions. Gazprom, the Russian state gas company, managed to double its revenues in the first half of 2022 despite a more than 40 per cent cut in gas supplies. Contrary to expectations, Brussels sanctions are now strangling the European economy. 

Natural gas and electricity prices, which have doubled and tripled in the last six months, have already brought 70 per cent of European fertiliser production and 50 per cent of aluminium production to a halt. A recent survey by the German Industry Association shows that 90 per cent of businesses see energy prices as a financial challenge. Inflation has soared to 15-20 per cent, and citizens are facing high utility bills. It is therefore clear that Brussels' sanctions have backfired and, instead of Russia, are taking Europe into an immediate crisis.

In addition to the economic problems, there are also moral problems with sanctions that are unconditionally welcomed and supported by the left. When they were introduced, the bureaucrats did not promise what they ended up delivering; that is, they deceived the European people. In the Versailles Declaration adopted in March, the EU Heads of State and Government did not give the European Commission the mandate to impose sanctions on the energy sector. 

Yet Brussels went down this route and either did not talk at all about the impact of its measures on the European economy or presented them as temporary and minor. For months, it did not come up with any proposals to alleviate the crisis. Even now, the Brussels bureaucrats refuse to acknowledge the disastrous consequences of their decisions and those who speak out are lectured and threatened. The President of the European Commission, Ursula von der Leyen, has advised factories suffering from high energy prices to move their shifts to dawn, while citizens facing brutal utility bills were told to send them to Moscow. 

The EU High Representative for Foreign Affairs, Josep Borrell, likened the sanctions to a diet that "must be followed through no matter what". Those who want to change sanctions, he said, "must be fought with continuous and strong pedagogical work". And Guy Verhofstadt, a liberal leader in the European Parliament, said that "Europeans must indeed suffer in the spirit of real solidarity with Ukraine". Instead of cynical lecturing and threats, it would be timely for Brussels bureaucrats to review their behaviour on the issue.

The fact that sanctions have backfired is increasingly being recognised across Europe. In France, relatively far from the war, 74 per cent of people think sanctions are ineffective. In Germany, recent opinion polls show that more than 50 per cent of citizens oppose further increases in their cost of living as a result of sanctions. Similar opinions were also found in Italy and Austria. The European Commission must finally listen to these voices - it is unacceptable that citizens should pay the price for the geopolitical games of bureaucrats.

European countries are straining themselves to try to mitigate the damage caused by Brussels sanctions. Bailouts are being adopted across Europe to avoid mass factory closures, save small and medium-sized enterprises and help people. 

The Hungarian government is leading the way – public utility price caps remain one of the EU's biggest family support programmes, energy-intensive small and medium-sized enterprises are also being supported by the government, furthermore, a factory rescue and job protection programme is about to be launched.

However, to avoid an economic and livelihood disaster in Europe, Brussels must finally play its part in crisis management. And the first step must be the lifting of harmful energy sanctions.

 

Photo: Ursula von der Leyen (Europress/AFP)

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