By Geoffrey Smith
Investing.com — The European Union’s plans to impose an oil embargo on Russia appeared on the verge of collapse on Monday, ahead of a summit meeting of member states’ leaders later in the day.
The EU had hoped to finalize plans to stop buying Russian crude oil and refined products by the end of the year. However, the new package of sanctions, the sixth proposed by the EU since Russia invaded Ukraine in February, needs the unanimous backing of member states to come into effect and has been resisted by Hungary and, to a lesser extent, Czechia and Slovakia. The three landlocked countries all have a historical dependence on oil delivered by Soviet-era pipelines.
Germany’s Vice-Chancellor Robert Habeck warned at a press conference on Sunday that European unity is “starting to crumble and crumble again,” after negotiations between diplomats failed to overcome Hungarian resistance, despite proposals for the embargo to be delayed for the three central European states.
The failure to agree on oil has also led to the package being weakened in other respects, according to various reports. A proposal to ban Russian investment in European real estate has also been dropped from the draft package.
The EU’s top diplomat Josep Borrell was, nonetheless, still optimistic on Monday that a deal could be struck.
“I think that this afternoon, we will be able to offer to the heads of the member states an agreement,” Borrell told French radio station France Info.
European purchases of Russian oil and gas generate around $1 billion a day in revenue for the Kremlin and are the biggest single source of hard currency for Russia. According to Finance Ministry data, Russian defense spending more than doubled to $300 million a day in April as a result of the war.