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EU Agrees Gradual Russian Oil Embargo, Gives Hungary Exemptions

High Representative of the European Union for Foreign Affairs and Security Policy Josep Borrell arrives for the second day of a European Union leaders summit as EU leaders attempt to agree on Russian oil sanctions in response to Russia's invasion of Ukraine, in Brussels, Belgium May 31, 2022. (Reuters)
High Representative of the European Union for Foreign Affairs and Security Policy Josep Borrell arrives for the second day of a European Union leaders summit as EU leaders attempt to agree on Russian oil sanctions in response to Russia's invasion of Ukraine, in Brussels, Belgium May 31, 2022. (Reuters)
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EU Agrees Gradual Russian Oil Embargo, Gives Hungary Exemptions

High Representative of the European Union for Foreign Affairs and Security Policy Josep Borrell arrives for the second day of a European Union leaders summit as EU leaders attempt to agree on Russian oil sanctions in response to Russia's invasion of Ukraine, in Brussels, Belgium May 31, 2022. (Reuters)
High Representative of the European Union for Foreign Affairs and Security Policy Josep Borrell arrives for the second day of a European Union leaders summit as EU leaders attempt to agree on Russian oil sanctions in response to Russia's invasion of Ukraine, in Brussels, Belgium May 31, 2022. (Reuters)

European Union leaders have agreed an embargo on Russian crude oil imports that will take full effect by the end of the year, but Hungary and two other landlocked Central European states secured exemptions for the pipeline imports they rely on.

The ban, agreed overnight after weeks of wrangling, aims to halt 90% of Russia's crude imports into the 27-nation bloc by year-end, officials said.

It is the toughest sanction yet on Russia for its invasion of Ukraine, and one that will itself affect the EU, where energy prices have spiked and inflation is running at close to a double-digit clip.

Russia accounted for just over a quarter of EU oil imports in 2020, while Europe is the destination for nearly half of Russia's crude and petroleum product exports.

"The sanctions have one clear goal: To prompt Russia to end this war, to withdraw its troops, and to agree a sensible and fair peace with Ukraine," German Chancellor Olaf Scholz said.

Ukraine said they would deprive the "Russian military machine" of tens of billions of dollars.

French President Emmanuel Macron said nothing could be ruled out regarding further sanctions, although other leaders poured cold water on the idea of banning purchases of Russian gas, on which Europe heavily depends.

EU countries will have six months to stop imports of seaborne Russian crude and eight months for refined products, the European Commission said.

That timeline will start once the sanctions are formally adopted, which EU states aim to do this week.

Hungary exempt
The deal was reached only after the EU's other leaders agreed to give Hungary a free pass, having failed to win Prime Minister Victor Orban over in weeks of talks.

Two-thirds of the Russian oil imported by the EU comes by tanker and the rest through the Druzhba pipeline.

Poland and Germany are among the pipeline importers, but have pledged to stop buying Russian oil by the end of the year.

Landlocked Hungary, Slovakia and the Czech Republic all get their Russian oil from Druzhba and account for the 10% of imports temporarily exempted from the embargo.

Bulgarian Prime Minister Kiril Petkov said his country had also secured an exemption until the end of 2024, since its refinery is designed to receive only Russian crude.

Oil prices rose after the EU's agreement, adding fuel to inflation, which already hit a record 8.1% year-on-year in euro zone countries this month.

Gas next?
The oil embargo follows an earlier ban on Russian coal and allows the bloc to impose a sixth round of sanctions that includes cutting Russia's biggest bank, Sberbank, off from the SWIFT international transaction system.

Commission chief Ursula von der Leyen said the package would also ban EU firms from insuring or reinsuring ships carrying Russian oil.

Ukrainian President Volodymyr Zelenskiy welcomed the latest sanctions but criticized what he called an "unacceptable" delay of more than 50 days since the EU's previous package.

Several countries already want to start work on a seventh round, but Austrian Chancellor Karl Nehammer said it could not include Russian gas, which covers a third of EU needs.

"Russian oil is much easier to compensate for ... gas is completely different, which is why a gas embargo will not be an issue in the next sanctions package," Nehammer said.

Russian analysts and traders said the phasing-in of the embargo gave Moscow time to find new customers in Asia.

"Although the measures announced by the European Union look threatening, we don't see a crippling impact on the Russian oil sector - neither imminent, nor in six months," analysts at Sinara Investment Bank said.

Beyond the sanctions, EU leaders asked the bloc's executive to explore options to tackle soaring energy prices. These include "temporary import price caps", which should be explored with international partners, their conclusions said.

They also endorsed a Commission plan to wean the EU off all Russian fossil fuels within years through a faster rollout of renewable energy, improvements in saving energy, and more investments in energy infrastructure.

And they called for better EU-wide contingency planning in case of further gas supply shocks. Moscow on Tuesday cut gas supplies to the Netherlands for rejecting its gas-for-roubles scheme, having already cut off Poland, Bulgaria and Finland.

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French Vote Gives Leftists Most Seats over Far-Right, but Leaves Hung Parliament and Deadlock

Fireworks go off as people gather in front of "Le triomphe de la Republique" statue during an election night rally following the first results of the second round of France's legislative election at Republique Square in Paris on July 7, 2024. (AFP)
Fireworks go off as people gather in front of "Le triomphe de la Republique" statue during an election night rally following the first results of the second round of France's legislative election at Republique Square in Paris on July 7, 2024. (AFP)
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French Vote Gives Leftists Most Seats over Far-Right, but Leaves Hung Parliament and Deadlock

Fireworks go off as people gather in front of "Le triomphe de la Republique" statue during an election night rally following the first results of the second round of France's legislative election at Republique Square in Paris on July 7, 2024. (AFP)
Fireworks go off as people gather in front of "Le triomphe de la Republique" statue during an election night rally following the first results of the second round of France's legislative election at Republique Square in Paris on July 7, 2024. (AFP)

A coalition of the French left won the most seats in high-stakes legislative elections Sunday, according to near-final results, beating back a far-right surge but failing to win a majority. The outcome left France facing the stunning prospect of a hung parliament and threatened political paralysis in a pillar of the European Union and Olympic host country.

That could rattle markets and the French economy, the EU’s second-largest, and have far-ranging implications for the war in Ukraine, global diplomacy and Europe’s economic stability.

In calling the election on June 9, after the far-right surged in French voting for the European Parliament, Macron said sending voters back to the ballot boxes would provide "clarification."

On almost every level, that gamble appears to have backfired. Results so far showed France plunged into a political fog, with the three main blocs — a leftist coalition, the far-right National Rally and Macron's centrists — all falling well short of the 289 seats needed to control the 577-seat National Assembly.

French Prime Minister Gabriel Attal addresses the media after the announcement of the results of the second round of the legislative elections at Hotel Matignon in Paris, France, 07 July 2024. (EPA)

"Our country is facing an unprecedented political situation and is preparing to welcome the world in a few weeks," said Prime Minister Gabriel Attal, who plans to offer his resignation on Monday.

With the Olympics looming, he said he was ready to stay at his post "as long as duty demands." Macron has three years remaining on his presidential term.

Attal made clearer than ever his disapproval of Macron's shock decision to call the election, saying "I didn't choose this dissolution" of the outgoing National Assembly, where the president's centrist alliance used to be single biggest group, albeit without an absolute majority. Still, it was able to govern for two years, pulling in lawmakers from other camps to fight off efforts to bring it down.

The new legislature appears shorn of such stability. With most ballots counted, the leftist coalition was leading Macron’s centrist alliance, with the far-right in third. That confirms the picture also given by pollsters’ projections.

In Paris’ Stalingrad square, supporters on the left cheered and applauded as projections showing the alliance ahead flashed up on a giant screen. Cries of joy also rang out in Republique plaza in eastern Paris, with people spontaneously hugging strangers and several minutes of nonstop applause after the projections landed.

Marielle Castry, a medical secretary, was on the metro in Paris, when the projections were first announced.

"Everybody had their smartphones and were waiting for the results and then everybody was overjoyed," said the 55-year-old. "I had been stressed out since June 9 and the European elections. ... And now, I feel good. Relieved."

Protesters hold a banner as they march during a demonstration following the announcement of the first results of the second round of France's crunch legislative elections in Nantes, western France on July 7, 2024. (AFP)

A redrawn political map Even before votes were cast, the election redrew France's political map. It galvanized parties on the left to put differences aside and join together in a new alliance, the New Popular Front, behind pledges to roll back many of Macron's headline reforms, embark on a massively costly program of public spending and, in foreign policy, take a far tougher line against Israel because of the war with Hamas.

Macron described the left's coalition as "extreme" and warned that its economic program of many tens of billions of euros in public spending, partly financed by tax hikes for high earners and on wealth, could be ruinous for France, already criticized by EU watchdogs for its debt.

Yet, with the projections and then the near-final results showing the New Popular Front with the most seats, its leaders immediately pushed Macron to give the alliance the first chance to form a government and propose a prime minister to share power with the president.

The most prominent of the leftist coalition’s leaders, Jean-Luc Mélenchon, said it "is ready to govern."

Although the National Rally fell far short of its hopes of securing an absolute majority that would have given France its first far-right government since World War II, the anti-immigration party with historical links to antisemitism and racism was on track to have more seats than ever in the National Assembly.

After the party finished top of the first-round vote last weekend, its rivals worked together to dash its hopes of an outright victory in Sunday’s runoff, by strategically withdrawing candidates from many districts. That left many far-right candidates in head-to-head contests against just one opponent, making it harder for them to win.

Many voters decided that keeping the far-right from power was more important to them than anything else, backing its opponents in the second round, even if they weren’t from the political camp they usually support.

National Rally leader Marine Le Pen, thought to be eyeing what would be her forth run for the French presidency in 2027, said the elections laid the groundwork for "the victory of tomorrow."

"The tide is rising," she said. "It did not rise high enough this time."

"The reality is that our victory is only deferred," she added.

French far-right leader Marine Le Pen talks to journalists after partial results in the second round of the early French parliamentary elections, at the French far-right Rassemblement National (National Rally - RN) party venue in Paris, France, July 7, 2024. (Reuters)

Jordan Bardella, Le Pen’s 28-year-old protégé who’d been hoping to become prime minister, rued that the outcome of the vote "throws France into the arms of the extreme left."

In a statement from his office, Macron indicated that he wouldn’t be rushed into inviting a potential prime minister to form a government. It said he was watching as results come in and would wait for the new National Assembly to take shape before taking "the necessary decisions."

A hung parliament is unknown territory for modern France.

Unlike other countries in Europe that are more accustomed to coalition governments, France doesn’t have a tradition of lawmakers from rival political camps coming together to form a majority. France is also more centralized than many other European countries, with many more decisions made in Paris.

The president was hoping that with France’s fate in their hands, voters might shift from the far-right and left and return to mainstream parties closer to the center — where Macron found much of the support that won him the presidency in 2017 and again in 2022.

But rather than rally behind him, millions of voters seized on his surprise decision as an opportunity to vent their anger.

In last weekend’s first round of balloting, voters backed candidates from the National Rally, while the coalition of parties on the left took second and his centrist alliance was a distant third.

The sharp polarization of French politics – especially in this torrid and quick campaign – is sure to complicate any coalition-building effort. Racism and antisemitism marred the electoral campaign, along with Russian disinformation campaigns, and more than 50 candidates reported being physically attacked — highly unusual for France.