On Wednesday, European Union ambassadors are set to meet in hopes of reaching a compromise with Greece regarding the adoption of the 21st sanctions package against Russia. This information comes from multiple European diplomats speaking to Reuters.
The new sanctions package targets the Russian banking sector, aiming to apply pressure on Moscow’s financial system during a critical period of vulnerability.
However, Greece has emerged as a significant obstacle to the adoption of these sanctions, as it seeks to ease EU restrictions on Russian liquefied natural gas (LNG) deliveries. Last week, Athens argued that a potential ban on transporting Russian LNG would merely shift market share away from Europe without impacting Russia’s revenues.
As a dominant player in the European LNG shipping market, Greece competes with major global players such as Japan, China, and the United States.
EU diplomats had hoped that the recent departure of Viktor Orban from Hungary, who had consistently delayed assistance to Ukraine and sanctions against Russia, would enable a smoother adoption of upcoming measures. However, new fractures have surfaced within the bloc as the European Commission strives to close remaining loopholes for Russian businesses and intensify pressure on Russia’s critical energy revenues.
Russia Faces Potential “Explosive” Banking Crisis
The major Russian banks were disconnected from SWIFT, a secure global payment instructions system, in 2022 due to Western sanctions. Despite this, Russian companies have managed to maintain trade and financial flows through smaller regional credit institutions and cryptocurrency networks.
The new sanctions package includes approximately 215 individuals and entities, comprising 94 financial institutions. Nearly 90 of these are banks, raising the total number of sanctioned banks to over 100, which accounts for more than half of the 213 Russian credit institutions linked to the international network.
A report from an intelligence agency of a European state, reviewed by Reuters, warned in June that Russia risks facing an “explosive” banking crisis, and that a new sanctions package targeting banks could trigger an economic shock. Russian authorities have dismissed warnings about an impending crisis.
EU diplomatic sources indicated that the aim of including these entities on the sanctions list is to deter third countries from conducting business with these Russian credit institutions, as ties with the EU have now diminished or are nonexistent.
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