European leaders approve second wave of sanctions against Russia

BRUSSELS – European leaders meeting in the early hours of Friday reached agreement on a new set of sanctions targeting the Russian economy more broadly and President Vladimir Putin himself, as his forces advance in the invasion of Ukraine.

Three EU diplomats and officials familiar with the EU sanctions draft said on Friday that one of the decisions was to freeze the assets of Russia’s Mr. Putin and his Foreign Minister Sergei Lavrov, but not to impose a travel ban on them.

The bloc’s 27 members managed to expel A First set of penalties On Wednesday in response to Mr. Putin’s recognition of separatist enclaves in Ukraine, they did so in record time.

But the second package of sanctions, which they described as unprecedented for the European Union in scale and scope, was difficult to reach consensus on, even with Russian forces. near Kiev, The capital of Ukraine and the war in Europe is no longer a theory, but a devastating reality.

The economies of Europe are closely linked to the Russian economy, and the more inclined the European Union is to Russian sanctions, the more pain its members will also feel. Even the most severe sanctions could derail the bloc’s temporary recovery from the recession caused by two years of the pandemic.

That’s why negotiators left the particularly difficult elements off the table – such as imposing sanctions on oil and gas companies or banning Russia from SWIFT, the platform used to conduct global financial transactions on commodities including Wheat.

EU officials have said one of the main reasons they are reluctant to cut off Russia’s access to the platform is that Europe is using it to pay for the gas it buys from Russia – a double whammy of dependency – and that disruption will cause major problems for the bloc.

Experts said the sanctions approved were harsh and the speed with which the EU was moving was impressive. But given how dramatic the developments in Ukraine are, some have criticized the leaders for not moving forward.

“This morning, we are defending our state alone,” he said. “Like yesterday, the most powerful powers of the world are watching from afar. Did yesterday’s sanctions convince Russia? We hear in our skies and see on our land that this was not enough.”

Ursula von der Leyen, President of the European Commission, the executive branch of the bloc that carried out the painstaking technical work behind the sanctions, said Friday morning that the sanctions would harm the ability of the Russian economy to function by depriving it of critical technology and access to finance.

“Now we have a moment. We will hold the Kremlin accountable. The massive and targeted package of sanctions that European leaders agreed tonight clearly shows,” Ms. von der Leyen said after the meeting, which began Thursday evening and lasted six hours.

“It will have the maximum impact on the Russian economy and political elite,” she added.

Its most ambitious elements were also the most technical: the European Union would ban the export of aircraft and spare parts for the maintenance of Russian fleets. Ms von der Leyen said three-quarters of the planes in Russia’s aviation fleet were made in the European Union, the United States or Canada, and those measures effectively meant many of them were grounded soon.

The bloc would also ban the export of specialized oil refining technology as well as semiconductors, and penalize more banks — though it would stop targeting VTB, Russia’s second-largest bank, which has already been crippled by US and British sanctions, according to a draft description of the sanctions seen by The New York Times.

The EU will target Russian elites further by cutting off diplomatic and passport holders’ access to EU visas, and by limiting the ability of Russian citizens to make new financial deposits over 100,000 euros (about $112,000) in European bank accounts.

The bloc’s leaders blessed the sanctions package at their meeting, but its details and legal language still need to be worked out on Friday by EU ambassadors and foreign ministers.

However, there were missing items that many European member states, as well as the United States and Ukraine itself, wished to include.

One such measure was to cut off Russia’s access to the SWIFT system, a step the United States and Canada were willing to take. Ukrainian Foreign Minister Dmytro Kuleba demanded this on Thursday during a meeting of European Union leaders, but the European Union refused.

President Biden said action was not on the table. “It’s always a choice,” he told reporters Thursday when asked why the United States did not isolate Russia from Swift as part of its sanctions package, but right now, that’s not the position the rest of Europe would like to take.

Dutch Prime Minister Mark Rutte, who has taken one of the toughest lines among EU leaders over imposing sanctions on Russia, said he and others have been pushing for Swift’s inclusion.

“Many colleagues have called for Swift, but we agreed that more work should be done to assess what it would mean if Russia was cut off from the Swift system,” he said.

While the bloc would impose sanctions on Mr. Putin and his foreign minister, Mr. Lavrov, and freeze their assets in the EU, the move was largely meant to be symbolic; Most prominent Russians use complex structures to hide their assets in closely regulated EU banks, and the beneficial owner of the assets and accounts is usually difficult to reach.

And while Britain took long-discussed steps to punish the oligarchy on Thursday, EU leaders, under pressure from allies to do the same, agreed instead to change the legal language in the sanctions package so they could take such a step in the future. .

The way European sanctions against Russia are taking shape has highlighted that some EU countries, most notably Germany and Italy, have favored a phased approach to punish Mr. Putin, in part to protect Europe’s fragile post-pandemic economic recovery.

On the other side, there were the neighboring countries of Russia and Ukraine, such as Poland, Estonia, Latvia and Lithuania, as well as the Nordic countries and the Netherlands. They would rather not break the sanctions into smaller packages, but rather hit Mr. Putin with crushing economic measures that really get the sting.

Polish Prime Minister Mateusz Morawiecki spoke on behalf of many of them in a candid statement as he arrived at the meeting in Brussels on Thursday night.

“Talking is cheap. Enough of this cheap talk, there is enough naivety around us, pettiness. “We buy like Europe and the European Union a lot of Russian gas and a lot of Russian oil. And President Putin takes money from us, we Europeans, and he turns this into aggression.”

Monica Bronczuk Contribute to the preparation of reports.