DRYING UP RUSSIA’S OIL REVENUE
EU GEARS UP FOR RUSSIAN OIL PRICE CAP: John McCain famously once called Russia “a gas station masquerading as a country.” Now, the EU, U.S. and other Western powers are pushing gas-jockey Vladimir Putin for a price cut.
The G7 is set to announce its long-awaited oil price cap on Wednesday … But EU countries such as Cyprus, Malta and Greece fear it will hurt their shipping industries. Diplomats and senior officials said the three countries are concerned they’ll lose some of their tanker fleets, which reportedly are already ditching EU flags in favor of those of China, Turkey, India or of various tax havens to avoid the EU and U.S.-imposed price cap.
All aboard? The cap seeks to bar shipping companies and insurers from transporting Russian oil unless it is sold below the agreed price cap, and all 27 EU countries need to agree to it for it to enter into force. Diplomats warned they were unsure whether Greece, Cyprus or Malta would have any last-minute concerns. But officials said the EU had already made concessions to the three countries and weakened sanctions on other Russian goods such as fertilizers, cement and other products to soften the blow for their shipping industries.
Timelines: The 27 EU countries must sign off on the deal before the EU embargo on Russian oil kicks in on December 5. In theory, that green light could come quickly, perhaps even at a meeting of EU ambassadors on Wednesday. After all, the EU already agreed on a legal basis for the oil price cap in its latest sanctions package. At the time, Malta, Greece and Cyprus, whose tanker fleets transport most Russian oil, were worried about the impact of the cap on oil prices on their shipping industries. This led to some concessions toward those countries, such as a monitoring system by the Commission to assess circumvention measures such as the reflagging of vessels.
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No number for the cap yet. The European Commission has informed EU countries on the technicalities of the price cap — but not the actual price, Barbara Moens writes in to report. U.S. Treasury Secretary Janet Yellen has suggested $60 per barrel, which is below the market price for oil but close to the price at which Russian oil is trading in Asia (where countries such as India and China are buying it up at a discount). Still, the cap would be much higher than the Russian production cost.
MORE RUSSIAN WAR FALLOUT
READYING THE 9TH PACKAGE: Poland, Latvia, Lithuania and Estonia, who have been arguing for tougher and faster EU sanctions against Russia since the start of its war on Ukraine, are pushing other capitals and the European Commission to agree on the oil price cap and the EU’s ninth sanctions package at the same time, diplomats said.
But the so-called confessionals, where the Commission informally tests the water for new measures with groups of like-minded EU ambassadors, haven’t started on a new sanctions package yet. Other EU diplomats were less enthusiastic about the attempt from those hawkish countries to link the oil price cap to new sanctions, arguing the package was not yet ready and linking them would only make things more difficult.
Sneak peek: Playbook has had a preview of the ninth sanctions package. According to two officials, it will focus on many individual listings — hitting Russian officials, propagandists, executives and other figures propping up Putin’s kleptocratic regime. EU countries have proposed long lists of names, officials said, and the Commission’s experts are currently working through them to make sure they can be linked to Russia’s war — which is necessary legally for the sanctions to hold up if they are challenged in court, as they often are.
MEPs WANT TO LIST WAGNER GROUP AS TERROR ORGANIZATION: Cross-party MEPs are calling for the EU to list the Wagner Group as a terrorist organization. The private mercenary militia, led by close Putin-ally Yevgeny Prigozhin, has been involved in conflicts from Ukraine to Syria, Sudan, Mozambique and the Central African Republic, among others.
Broad support: The MEPs (representing the full spectrum of Parliament’s groups, from the far-right ID to The Left, Renew, the EPP, the S&D and the Greens) sent a letter, dated November 11, to European Council President Charles Michel and Czech PM Petr Fiala, whose country holds the rotating Council presidency. Citing “ongoing violations of international law in Ukraine” by Wagner and “their previous exploits in other conflicts,” the MEPs say the group should be designated a terrorist organization.
MEANWHILE, ON THE GROUND IN UKRAINE: Kyiv’s Mayor Vitali Klitschko is in the bout of his life preparing the city to endure a freezing winter under Russian attack, reports Jamie Dettmer from the Ukrainian capital. Russia “wants Ukraine without Ukrainians,” Klitschko told Jamie in an interview at his city hall office. “They want to freeze us, destroy our electricity, our heating, our generators. They are doing everything to move Ukrainians away, but these [are] our homes, our cities and we don’t want to leave.”
MOLDOVA’S WARNING: A group of European nations led by Germany and France pledged millions of euros in fresh support for Moldova on Monday. But leaders of the Eastern European country urged a speedier deployment of the aid amid Russia’s intensifying energy blackmail, writes in Hans von der Burchard, who attended the Moldova support conference in Paris.
Speed up: “A lot of good, positive dynamics between the European Union and Moldova are happening,” Moldova’s Foreign Minister Nicu Popescu told reporters. But he urged his EU allies to hurry, for example when it comes to linking Moldova to Europe’s energy network. Read Hans’ story here.
FRANCO-GERMAN PLEDGE: Ahead of the Moldova support conference, German Foreign Minister Annalena Baerbock met her French counterpart Catherine Colonna in Paris. Both voiced optimism about rejuvenating the Franco-German friendship, and Colonna said the governments would meet for a summit on January 22, Hans reports. Baerbock also discussed current challenges to the EU — including the U.S. Inflation Reduction Act — during an hour-long meeting with French President Emmanuel Macron.
Next in Paris: In what appears to be a true Franco-German week, Berlin’s Economy Minister Robert Habeck is in Paris today for a meeting with his French counterpart Bruno Le Maire. As we reported earlier, French Prime Minister Elisabeth Borne will be in Berlin on Friday to meet Chancellor Olaf Scholz.
FRANCE WOOS UZBEKISTAN: Today, Macron is hosting his Uzbek counterpart Shavkat Mirziyoyev for lunch at the Elysée, before a visit to two exhibitions on Uzbekistan at the Louvre and the Arab World Institute. While the trip officially revolves largely around culture, Russia’s war on Ukraine will inevitably be center stage. Not only is the war destabilizing Uzbekistan’s neighborhood, but Moscow is looking to recruit Uzbeks to fight in Ukraine.
Getting out from Russia’s orbit: Paris is pleased that Uzbekistan, one of the constituent republics of the USSR, did not support Russia in the U.N. votes on its war in Ukraine. The hope now is that it will be possible to encourage Uzbekistan further along that path, even as it remains economically closely linked to Russia — with the aim of isolating Moscow more on the international scene.
Seeking new supplies: The visit is also expected to result in a confirmed agreement with France on uranium mining in Uzbekistan.
PARLIAMENT TO URGE VDL NOT TO GIVE UP ON HUNGARY: MEPs will call on Commission President Ursula von der Leyen not to give in to pressure from Hungarian Prime Minister Viktor Orbán, who has blocked major EU legislative files in attempts to secure money and force Brussels to give up on its rule-of-law dispute with Budapest.
Reminder: The Commission is preparing to pay out €5.8 billion in jointly borrowed EU pandemic recovery cash to Orbán’s government, and is working on a compromise deal on the rule-of-law conditionality mechanism, under which Hungary stood to lose €7.5 billion in EU funds.
A draft resolution by the EPP, S&D, Renew, Greens, and Left to be voted on Thursday and obtained by Playbook points to corruption and kleptocracy concerns, despite Budapest’s promises that it would be transparent and respect the rule of law. Budapest’s promises “are not sufficient to address the existing systemic risk on the EU’s financial interests,” the draft text reads. Parliament also stresses that the “risk of misuse of funds under the Recovery and Resilience Facility” is still very much real and calls on the Commission “not to approve Hungary’s plan until it has fully complied with all” Court of Justice of the EU rulings to restore the rule of law.
History calling: “Don’t miss your appointment in history,” Renew Europe MEP Sophie in ‘t Veld told Justice Commissioner Didier Reynders in the plenary on Monday. “Whoever thinks that Viktor Orbán is serious about anti-corruption reform also believes in Santa Claus,” a German Greens MEP who co-authored the resolution told Playbook.
Rule-of-law conditionality: Reynders said Hungary has received information from Budapest on the 17 anti-corruption reforms that it has implemented thus far by the November 19 deadline, and it will “finalize its assessment … without delay.” It will then pass the hot potato to the Council, which has until December 19 to “adopt, amend or reject” the Commission’s proposal to curtail Hungary’s funds by €7.5 billion by qualified majority.
As for the recovery fund — Reynders said the Commission is planning to give its judgment on Hungary’s proposal “as soon as possible,” and that it will link the disbursement of funds to its fulfillment of so-called milestones linked to the anti-corruption reforms as well as to the independence of the judiciary
IN OTHER NEWS
WARNINGS OF ‘ESCALATION AND VIOLENCE’ AS KOSOVO AND SERBIA FAIL TO DEFUSE DISPUTE: Europe’s foreign affairs chief Josep Borrell on Monday slammed the leaders of Kosovo and Serbia — but in particular Kosovo — for failing to defuse a dispute over car licence plates that risks spiraling into a renewed violent conflict.
Pointing the finger at Kurti: Borrell on Monday hosted emergency talks between Serbian President Aleksandar Vučić and Kosovo’s PM Albin Kurti in an unsuccessful attempt to strike a last-minute deal. “Both bear full responsibility for the failure of the talks today and for any escalation and violence that might occur on the ground. We put forward a proposal that President Vučić accepted today while Prime Minister Kurti did not,” Borrell said.
Disappointed and concerned: NATO Secretary-General Jens Stoltenberg said he was “disappointed that it was not possible to solve the licence plate dispute” and called for “pragmatic solutions” to avoid an escalation, warning that NATO’s Kosovo Force “remains vigilant.” Meanwhile, the U.S. Ambassador to Kosovo Jeffrey M. Hovenier said in a statement that Washington was “concerned” about the failure to reach an agreement.
48-hour race to find a solution: Hovenier also said he had asked Kosovo’s government to “postpone for 48 hours the imposition of fines to allow the EU and the United States to further engage the parties to find a solution.” Kurti tweeted that he had agreed to the request, adding: “I am happy to work with the US and the EU to find a solution during the next two days.”
EUROPEAN SEMESTER TIME: The European Commission will today adopt policy guidance for EU countries — also known as the European Semester Autumn Package. It’s a barrage of documents giving country-by-country recommendations on the fiscal stance for euro area countries, as they draw up their national budgets for 2023. The aggregate fiscal stance of the euro area is projected to be broadly neutral, an EU official told Paola Tamma.
GLIMMER OF GOOD NEWS ON INFLATION: Producer prices for Germany’s industry fell for the first time in two years last month, according to the country’s statistics office. Input prices for industry fell 4.2 percent on the month, which was mostly down to falling electricity and gas prices. Compared to last year, producer prices are still up by 34.5 percent, again mostly due to high gas and electricity prices, the statisticians said. Producer prices are seen as an early trend indicator for consumer price inflation.
MIGRATION UPDATE: The European Commission is pushing to create guidelines for the NGO boats rescuing migrants off Europe’s shores as part of a plan to reduce the number of asylum seekers heading to the Continent, reports Jacopo Barigazzi. The plan, presented Monday by the European Commission, comes amid a public feud between France and Italy over arriving migrants and the NGO boats that often rescue them at sea.
— General Affairs Council (Cohesion) begins at 10 a.m. Arrivals from 9 a.m., press conference expected 1:15 p.m. Watch.
— Meeting of the College of Commissioners.
— European Parliament plenary continues in Strasbourg. Highlights: Home Affairs Commissioner Ylva Johansson delivers opening and closing statements at session on resilience of critical entities (9 a.m.) … Commission President Ursula von der Leyen participates in ceremony commemorating 70th anniversary of the European Parliament, together with Commissioners Margrethe Vestager, Mariya Gabriel, Janusz Wojciechowski and Olivér Várhelyi, and French Prime Minister Elisabeth Borne, Belgian Prime Minister Alexander De Croo and Luxembourg’s PM Xavier Bettel (11:30 a.m.) … Plenary session on EU-China relations (6 p.m.) … Plenary session on the EU response to crackdown on protests in Iran (7:30 p.m.). Full agenda. Watch.
— European Parliament President Roberta Metsola meets with Minister for European Affairs of Sweden Jessika Roswall (9:15 a.m.) … French Prime Minister Elisabeth Borne (10 a.m.) … Belgian Prime Minister Alexander De Croo (10:30 a.m.) … Luxembourg’s PM Xavier Bettel (11 a.m.) … and the Speaker of the House of Representatives of Malta Angelo Farrugia (2:30 p.m.).
— Single Market Commissioner Thierry Breton in Paris; delivers keynote at the European Space Agency Ministerial Council meeting.
— EU-Turkmenistan conference on “Green energy and EU strategies for the use of hydrogen and the reduction of methane emissions.”
— European Council President Charles Michel in Ghana for a Conference on the Accra Initiative.
EMPTY CHAIRS: Budget Commissioner Johannes Hahn last night gave a speech about the benefits of joint EU borrowing on the bond markets in the European Parliament — but spoke to a virtually empty hemicycle. A picture tweeted from Hahn’s account showed him addressing mainly empty chairs.
BIRTHDAYS: European Commissioner for Economy Paolo Gentiloni; MEPs Sándor Rónai, Ska Keller and Olivier Chastel; Former MEP Sophie Montel; Austrian politician Elisabeth Köstinger; Katrina Murray from the Australian Department of Foreign Affairs and Trade; Lydie Polfer, mayor of Luxembourg City; European Parliament’s Stijn Teeuwen; BBC’s George Alagiah; Spotify’s Eleanor Baelus; U.S. Ambassador to the U.N. Linda Thomas-Greenfield; U.S. Ambassador to the Netherlands Shefali Razdan Duggal.
SOURCE: BY JAKOB HANKE VELA