‘Solutions first, sanctions afterwards’ Hungary pushes back against EU’s Russian oil ban

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Hungarian Justice Minister Judit Varga proclaimed “solutions first, sanctions afterwards”, indicating that Budapest will need help from Brussels to wean itself off its dependency on Russian oil. Ms Varga’s comments come on the eve of fresh talks with the EU on a sixth round of sanctions against Russia following the Kremlin’s invasion of Ukraine.

Budapest has frequently clashed with other EU states and the European Commission, which has consistently advocated for tougher sanctions against Moscow.

Earlier this month, the Commission unveiled a sixth package of sanctions to cripple Russian President Vladimir Putin’s economy, including a six-month phase out of all Russian oil supplies in the EU.

However, opposition from Budapest has meant that the ban has yet to be confirmed as unanimous support is required from all 27 member states.

Several EU member states, such as the Czech Republic and Slovakia, have managed to secure a phase out period of two years rather than six months.

Budapest however is also hoping for an exemption for piped oil supplies or some sort of compensation.
In response, Germany’s Economy Minister Robert Habeck has hinted that Berlin could vote through a ban that excluded Hungary.

According to sources, France, Lithuania, Belgium and Ireland have called for a compromise during behind closed doors discussions involving EU diplomats last week.

Sources told Reuters that Sweden has suggested that the oil embargo could be dropped in order to press ahead with other sanctions if necessary. 

The new round of sanctions include excluding the Russian Sberbank from the SWIFT banking system as well as targeting individuals judged responsible for the war.

However, a full oil ban is arguably the most effective measure Brussels could take against Moscow, experts have suggested.

The EU is currently dependent on Russia for 25 percent of its oil supplies.

Hungary is heavily reliant on crude stocks from Russia. 

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Budapest has also revealed that it would need €750million (£637million) in short term investments to upgrade refineries and expand a pipeline in order to bring oil from Croatia.

It’s also estimated that in the long term the conversion of its economy away from reliance on Russian oil could cost as much as €18billion (£15.2 billion).

Last week the European Commission offered up to €2billion (£1.6billion) in order to support EU countries which are landlocked and reliant on Russian supplies.

They include Hungary, the Czech Republic and Slovakia.

It has also announced a €210billion (£178billion) plan to end the bloc’s dependency on Russian oil although it wasn’t revealed how this money would be shared among EU states.

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