Greece's LNG veto on Russia sanctions stalls EU deal

Created at 21 Jul · 5:11 AM1 source↑ Market-relevant

IN SHORT

Greece is blocking the EU's latest sanctions package against Russia due to a ban on liquefied natural gas (LNG) set to take full effect in 2027. Athens wants the legal text revised to allow continued transport of Russian LNG, potentially impacting Europe's maritime industry and employment.

Key Numbers

€6 billionEU purchases from Yamal LNG in H1

136 cargoesRussian LNG shipments to EU in H1

9.97 million metric tonsRussian LNG volume to EU in H1

Who's Involved

Kyriakos Mitsotakis

Greek Prime Minister

George Prokopiou

Greek billionaire and owner of Dynagas

Dynagas

Company specializing in LNG shipping, chartered vessels to Russia's Yamal LNG

European Commission

Preparing economic analysis to counter Greek arguments

Vladyslav Vlasiuk

Ukrainian president's commissioner for sanctions policy

Greece's LNG veto on Russia sanctions stalls EU deal

↳ Why This Matters

Greece's veto on new Russia sanctions over LNG transport threatens to undermine the EU's unified stance against Moscow and could weaken the effectiveness of energy sanctions, potentially impacting global energy markets and geopolitical relations.

Key facts

Greece is obstructing the EU's newest sanctions against Russia.
The dispute concerns a ban on Russian liquefied natural gas (LNG) transport, set to fully take effect in 2027.
Athens wants to revise the ban to allow continued transport of Russian LNG, citing potential damage to its maritime industry.
The European Commission is preparing an economic analysis to counter Greece's arguments.
Possible solutions include delaying the ban, granting an exemption, or waiting for Greece to drop its veto.

Greece is currently blocking the European Union's latest sanctions package against Russia, specifically due to a ban on liquefied natural gas (LNG) that is slated to be fully implemented in 2027. Athens is advocating for a revision of the legal text to permit the continued transport of Russian LNG, arguing that the current ban would negatively impact Europe's maritime services industry, lead to job losses, empower foreign competitors, and ultimately fail to significantly weaken Russia's war economy.

The European Commission and other member states are reportedly frustrated with Greece's position, fearing that revisiting a decision unanimously agreed upon last year could set a dangerous precedent and weaken the overall sanctions regime. The Commission plans to circulate an economic analysis to counter the Greek government's claims, asserting that banning LNG transport would indeed have a detrimental effect on Russia's war economy.

Several potential resolutions are being considered to break the deadlock. One approach is to maintain pressure on Greece, hoping Athens will eventually relent and drop its veto. Another option involves a brief delay in the transport ban's implementation, while leaving the import ban intact, which would provide Greece with more time to adjust and allow it to save face. The most controversial solution would be to grant Greece a specific exemption, amending the legal text to indefinitely permit the transport of Russian LNG to non-EU clients, a move that has drawn concern from Ukraine about the message it would send.

Greece's preferred option is a tailor-made exemption that would allow its shipping companies, such as Dynagas, to continue transporting LNG, particularly to Asian markets via the Northern Sea Route. However, Brussels has a history of contentious derogations, such as those granted to Hungary and Slovakia for Russian crude oil imports, which have previously led to similar impasses.

Frequently asked questions

Greece is blocking the sanctions due to a proposed ban on the transport of Russian liquefied natural gas (LNG), which it argues will harm its significant maritime services industry.

Greece is concerned about the impact on its large merchant fleet, potential job losses, and the empowerment of foreign competitors if the ban on transporting Russian LNG is fully implemented.

Possible solutions include waiting for Greece to drop its veto, briefly delaying the transport ban, or granting Greece a specific exemption.

The European Commission is standing firm on the ban and plans to provide an economic analysis to counter Greece's arguments, aiming to show that the ban would indeed hurt Russia's war economy.

What Happens Next

01The European Commission will circulate an economic analysis to counter Greek arguments.

02Member states may offer a compromise, such as delaying the transport ban's entry into force.

03Greece may eventually drop its veto if it feels increasingly isolated.

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How It Developed

Greece is blocking the EU's latest sanctions package against Russia.

The impasse centers on a ban on Russian liquefied natural gas (LNG) scheduled for full implementation in 2027.

Greece seeks to revise the legal text to permit the transport of Russian LNG beyond the cut-off date.

The Greek government argues the ban will harm its maritime services industry and empower foreign competitors.

The European Commission plans to circulate an economic analysis to counter Greek arguments.

A potential compromise involves briefly delaying the transport ban's entry into force.

Another option is to grant Greece a specific exemption to permit LNG transport to non-EU clients.

Ukraine expressed concern that such a concession would send the wrong message.

Sources

Three possible ways to lift the Greek veto on new Russia sanctionsEuronews