In an escalating move aimed at bolstering European energy independence and cutting off funding for Russian military operations in Ukraine, the European Council has approved a package of stringent sanctions targeting Russian gas imports. Under the new decision, hefty fines will be imposed on entities that continue to purchase gas from Moscow starting in 2027, marking a radical shift in the continent's energy policies.
Details of fines and financial penalties
According to the Council's statement, the new rules impose a fine of 300% of the value of any gas deal concluded with Russia, or the equivalent of 3.5% of the total annual revenue of the offending European companies. The penalties are not limited to commercial entities; individuals also face fines of at least €2.5 million. For companies, the minimum fine has been set at €40 million, placing economic institutions at existential financial risk if they fail to comply.
Context of the shift away from Russian energy
This decision culminates years of efforts since the outbreak of the Russian-Ukrainian war in February 2022. Through its "REPowerEU" plan, the European Union has sought to gradually reduce its dependence on Russian fossil fuels. Members of the European Parliament recently approved a resolution banning all imports of Russian gas by the end of 2027 at the latest. The resolution stipulates a phased ban, starting with the most sensitive long-term contracts, with full implementation to take effect no later than November 1, 2027.
Legislative maneuvers and internal opposition
To ensure the passage of this sensitive decision, the European Commission resorted to a legal strategy based on submitting a legislative proposal requiring a qualified majority vote instead of unanimity. This move was primarily aimed at avoiding a veto by countries like Hungary and Slovakia, which remain heavily dependent on energy supplies from the East.
This move has sparked angry reactions, with Hungarian Prime Minister Viktor Orbán vowing to challenge the plan in the European Court of Justice, deeming it a threat to his country's energy security. Similarly, far-right MEP Thierry Mariani described the decision as a "historic break" that exposes companies and countries to serious legal and economic risks.
Exceptions and future challenges
Despite the stringent gas agreement, the current agreement does not include a complete ban on Russian oil or nuclear fuel, two sectors on which several European countries still rely to power their power plants and meet their industrial needs. Economists indicate that the coming years will see European companies racing against time to find sustainable alternatives, whether through liquefied natural gas (LNG) from the United States and Qatar, or by accelerating the transition to renewable energy to avoid the financial crisis that awaits them in 2027.
