Versailles summit debates Ukraine membership and EU energy independence

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A breakthrough in Versailles it was not. EU leaders still differ on whether and how fast Ukraine should join the bloc and on how to tackle surging energy prices (here, the European Central Bank said yesterday it would scale back its bond-buying stimulus plan).

Nor did the first direct talks between the Russian and Ukrainian foreign ministers yield anything other than yet more concerns over Moscow’s plans, which the US said might include the use of biological or chemical weapons. Here’s the Financial Times’s take on how the conflict may play out.

The German government’s resistance to emulating the US oil embargo has meanwhile come under fire domestically, including from a former president and otherwise non-critical academia. We’ll look at the arguments on both sides and why calculations may only paint part of the picture.

And in lighter news, we’ll explore why several cities across Europe are renaming the streets where the Russian embassies to their countries happen to reside.

No divisions, except some

Don’t look for divisions in the EU, because they aren’t there to be found, declared Josep Borrell, the bloc’s foreign policy chief, as he joined EU leaders in the baroque splendour of Versailles for an informal summit yesterday evening, write Sam Fleming and Victor Mallet in Versailles.

And the union has indeed stuck together in response to the Russian invasion of Ukraine — most obviously by agreeing the hard-hitting sanctions in multiple packages in the past weeks.

But as the summit revealed, the reality is still rather more complicated than Borrell insisted. One of the main dividing lines — and by no means the only one — is the question of how to handle Ukraine’s aspirations to become an EU member.

The country’s foreign minister, Dmytro Kuleba, writing in the FT on the eve of the summit, said a green light for EU membership would give an “enormous injection of hope” to the Ukrainian people.

That is a view shared by some member states, including Poland and the Baltic nations, which want to see Ukraine put on an accelerated process towards becoming a candidate for EU membership.

But a number of member states, including France, Germany and the Netherlands, are far more cautious. Emmanuel Macron, the French president and host of the summit, said: “Is it possible to open an accession process to a country which is in a war? I don’t think so.” However, he also cautioned against “closing the door” for ever. “That would be unjust,” Macron said.

Mark Rutte, the Dutch prime minister, was more blunt: “There’s no such thing as a fast-tracking of accession.” That doesn’t mean that the EU cannot do more for Ukraine in the short term, including offering access to some EU programmes such as the Erasmus student scheme, said one senior EU diplomat.

But joining the EU is something that takes years and requires a candidate country to fulfil formidably demanding accession criteria. “We have worked out a very serious procedure on EU membership — this is a very long avenue,” the diplomat added. Even Finland, which had the fastest accession to the bloc, took nearly three years from the moment it applied for membership until it actually joined, in 1995.

EU leaders affirmed in a joint declaration issued in the early hours of Friday that Ukraine belongs in “our European family” — but they did not offer the country a shortcut to membership. 

Heading into the summit another point of difference was over Macron’s typically ambitious idea of emulating the EU’s €800bn Covid-19 pandemic recovery plan in a new “resilience” scheme to finance investments in renewable energy and other ways of reducing dependence on imported Russian gas, and even in defence projects.

The neuralgic reaction of “frugal” northern Europeans to the idea of a new version of NextGenerationEU — particularly the notion that it might be financed by common EU debt — suggests that this will not get off the ground rapidly. “Some countries always find new arguments why they shouldn’t pay their expenses,” said Magdalena Andersson, the Swedish prime minister. Rutte, her Dutch counterpart, said the debt-financed Covid plan was a “one-off” and the idea of more of the same was not on the table.

Among the other topics EU leaders differ on is how soon to seek to wean the continent off Russian oil and gas (the commission is aiming for 2027), and how hard-hitting future sets of sanctions should be — including the question of whether to join the US embargo on Russian gas.

But to be fair to Borrell, the summit reflected an EU that is still managing to present an impressively united front on some of the key questions being asked. That is a reflection of the gravity of the security threat the continent now faces from Russia’s war on Ukraine.

Chart du jour: China to the rescue

China as of today will double the permitted trading range between its currency and the embattled Russian rouble, in order to support trade between the two countries, as Beijing so far has refrained from hitting Moscow with any sanctions for its invasion of Ukraine. Russia is a key supplier of oil and natural gas to China. (More here)

Freezing for freedom

From Swift sanctions to weapons deliveries, Germany has destroyed a lot of its policy third rails in response to Russia’s invasion of Ukraine — and a hefty dose of pressure from allies, writes Erika Solomon in Berlin.

There is one red line, however, it insists it cannot cross: imports of Russian fossil fuels. Germans, they argue, simply could not bear the cost. Yet, according to two studies released this week, it turns out they actually can.

A policy brief released this week by Econtribute, a joint project by the universities of Bonn and Cologne, argues the effects of the move would be “substantial, but manageable”. Meanwhile, Leopoldina, Germany’s national academy of the sciences, similarly concluded the impact would be “manageable”.

These statements are important, because German academia is usually cautious in coming out against the government. Their studies are piling on the public pressure after Berlin led the way on the EU’s opposition to a ban on Russian oil such as the US and the UK introduced this week.

Ukraine’s ambassador to Berlin said that the German position is “morally unacceptable” and Germany’s former president, Joachim Gauck, argued that Germans should accept a loss of prosperity.

“We can also freeze for freedom for once,” Gauck said.

The picture economists have painted so far is not quite that dire.

Econtribute predicted a loss in gross domestic product of between 0.5 and 3 per cent — less than the 4.5 per cent drop the country sustained in 2020 at the start of the pandemic. Robert Habeck, Germany’s vice-chancellor, has argued, however, that the drop could reach 5 per cent.

Within the EU, Germany is particularly dependent: it gets 55 per cent of its gas, 50 per cent of its coal and 35 per cent of its oil from Russia. Politicians have warned of catastrophic economic costs and the possibility of social unrest, should they forgo Russian energy.

Habeck, a Green politician who is responsible for energy and economics in Olaf Scholz’s government, says gas prices have risen by 100 per cent and coal by 200 per cent. “We can only adopt measures that I know will not cause economic damage in Germany,” he told state broadcaster ZDF on Wednesday.

That has led to a derisive response as a growing portion of Germany’s media and policy circles argue that the country will have to take a hit.

“It can help someone who has been hit by sanctions to know you mean business if the punishment also hurts the one imposing it,” Der Spiegel wrote in its report on Habeck’s comments, calling them “remarkable”.

It’s important to note that many other European countries have similar positions to Berlin’s when it comes to an embargo but are likely to be hiding behind the clout of Europe’s biggest economy. How well they can sustain the challenge of an embargo is an entirely different question.

Should the EU follow the US and ban Russian oil imports? Tell us what you think and click here to take the poll.

Street naming and shaming

Russian embassies across the continent may soon have to get used to being located on roads renamed to honour Ukraine, writes Jude Webber in Dublin.

Tirana, the capital of Albania, has already renamed the stretch of road that is home to the Ukrainian and Russian diplomatic missions, as well as those of Serbia and Kosovo, as Free Ukraine Street. As its mayor, Erion Veliaj, wrote on Twitter: “The Serbia war on Kosovo and the Russian war on Ukraine have defined our generation. This street will define our city.” 

In the Lithuanian capital, Vilnius, the Russian embassy’s new address will be Ukrainian Heroes Street. “From now on, the business card of every Russian embassy employee will have to honour Ukrainian heroes. And everyone who writes a letter to the embassy will have to think about the victims of Russian aggression and the heroes of Ukraine,” mayor Remigijus Šimašius wrote on Facebook.

In London, the Liberal Democrat party is urging the royal borough of Kensington and Chelsea to rename the swanky Kensington Palace Gardens as Zelensky Avenue in honour of the Ukrainian president, Volodymyr Zelensky. The street is also home to Chelsea football club owner Roman Abramovich, who was put under sanctions by the UK yesterday.

In Oslo, the Russian embassy will now be located on the newly renamed Ukraine Square.

And given Russia’s backlash on reporting of what it terms “fake news” of its invasion of Ukraine, councillors in Dublin are pushing to rename Orwell Road, home in the Irish capital to the Russian embassy (and reportedly to a large number of spies), Independent Ukraine Road.

What to watch today

1. EU leaders meet for the final day of the Versailles informal summit

2. US vice-president Kamala Harris meets Romanian president Klaus Iohannis in Bucharest

Smart reads

• No to no-fly zone: A no-fly zone enforced by western allies in Ukraine would be “ineffective, dangerous and a gift to Putin”, as it would require western pilots to deliberately kill (and risk being killed by) large numbers of Russian military personnel, including beyond Ukraine’s borders, according to this analysis by the Royal United Services Institute (Rusi).

• Draghi’s choices: Italy’s recent “divorce from Russia” is causing serious economic challenges at home, particularly for the energy sector, writes the European Council on Foreign Relations. Rome’s position is that it will take between 24 and 30 months to become independent from Russian gas.

• Asian option: This CEPS Policy Insights paper calculates that if Europe and Asia are considered as one interconnected energy market, high gas prices might, on their own, bring about the necessary reduction in gas demand to free up enough resources for Europe. This could be achieved even over a period as short as nine to 12 months, without having to rely on Russian gas.

• Inching westwards: In his tightrope act between Russia and Ukraine, President Recep Tayyip Erdogan of Turkey is moving cautiously toward the west, not just by blocking the passage of Russian warships into the Black Sea but also by expressing support for Ukraine to join the EU and Kosovo to join Nato. (More in this SWP piece)