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EU leaders tackle discord over Russia sanctions, Ukraine aid

2022-12-15T14:46:47Z

European Union leaders tried at a summit on Thursday to resolve disagreements standing in the way of deals on a major aid package for Ukraine and new sanctions against Russia.

At the end of a year when the EU closed ranks to support Ukraine after Russia’s invasion with unprecedented sanctions, but often struggled to agree how much pressure to put on Moscow, leaders were held up on several fronts.

For one, Poland was holding up a deal on a minimum corporate tax and, by extension, an 18 billion euro loan to Ukraine.

Member states had previously agreed this would be part of the same package but Polish Prime Minister Mateusz Morawiecki, who worries about the impact of the minimum tax, said bundling it up with the Ukraine aid, which he supports, was “blackmail.”

Ukrainian President Volodymyr Zelenskiy, speaking to the leaders by video link, urged them to approve the aid his country needs nearly 10 months into the war.

“I am asking you very much to ensure that our struggle for peace for Ukraine and for the whole of Europe does not depend on misunderstandings and controversies between some EU member states,” he said.

Leaders were also set to make another push at agreeing on a ninth package of Russia sanctions.

Any decision requires unanimity and the EU’s Russia hawks Poland and Lithuania have warned proposed exceptions for food security might in fact benefit Russian oligarchs in the fertilizer business.

Lithuanian President Gitanas Nauseda said it was important to keep the sanctions as strong as possible. “We are a little bit concerned with attempts to weaken the sanctions under the cover of food security,” he said.

The leaders were not expected to hold in-depth talks on the EU’s struggle to agree a natural gas price cap, but rather ask their ministers to “urgently finalise” the work when they meet again on Monday, the draft of the summit conclusions said.

Meanwhile, with the heating restricted to 19 degrees in EU buildings – and 16 degrees in the atrium where the media covering the summit work – as part of measures to save energy, some EU leaders were seen shivering as they arrived and a number of journalists worked wearing coats.

EU leaders also turned to seeking a joint response to the U.S. Inflation Reduction Act (IRA) – $430 billion worth of tax breaks for green energy.

Poorer EU countries want a coordinated response and warned richer member states like Germany against supporting their industries without showing solidarity with the rest of the bloc.

“Today we see that too often countries are trying to install schemes on their own. It looks a bit like a game of the deepest pocket,” Belgian Prime Minister Alexander De Croo said.

No deal is expected on Thursday, but the leaders are set to ask the EU’s executive Commission to make proposals early next year to prop up the bloc’s industry.

Commission President Ursula von der Leyen, who proposed loosening state aid restrictions in renewable energy and clean-tech because the IRA could lead to unfair U.S. competition, said: “We need to give our answer, our European IRA.”

The summit was also overshadowed by a corruption scandal rocking the European Parliament.

After Belgian prosecutors charged Eva Kaili, a Greek member of the EU chamber, and three others for accepting bribes from World Cup host Qatar, European Parliament chief Roberta Metsola said the assembly “is not for sale“.

She said the house would have an in-depth review of how it deals with third countries and would reinforce whistleblower systems. Qatar and Kaili have denied any wrongdoing.

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