Brussels Playbook: Pipeline attacks — Sanctions scoop — EU-Israel reset (2023)

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Brussels Playbook: Pipeline attacks — Sanctions scoop — EU-Israel reset (1)

By JAKOB HANKE VELA

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Brussels Playbook: Pipeline attacks — Sanctions scoop — EU-Israel reset (2)

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DRIVING THE DAY: PIPELINE ATTACKS

ENERGY WAR GETS HOT: European countries are scrambling to protect critical infrastructure from sabotage, after three Russia-to-Germany gas pipelines were attacked, as Playbook reported Tuesday morning.

Over the course of the day, more and more leaders came to the same conclusion as Denmark’s Prime Minister Mette Frederiksenwho saidthat these were “deliberate actions. It is not an accident.” Scandinavian seismic stations detected explosions in the area around the time the leaks began.

The attacks sent gas prices up again in Europe, as markets and officials worried whether other pipelines or LNG terminals could be next.

“The situation is as serious as it gets,” Frederiksen warned. Her Foreign Affairs Minister Jeppe Kofod said “the explosions and gas leakage in the Baltic Sea are a matter of deep concern to the Danish government and our allies. This is an international matter, and it is critical that we keep in close contact to find out what caused the incident.”

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Will the EU react? European Commission President Ursula von der Leyen vowed that “any deliberate disruption of active European energy infrastructure is unacceptable and will lead to the strongest possible response.”

In the past, European leaders have been all too willing to ignore attacks by foreign governments on their own territory — think of the repeated explosions in arms depots in Bulgaria, the murder in broad daylight in Berlin’s Tiergarten park in 2019, which a court said was ordered by the Russian state, or the Polonium and Novichok poisonings in the U.K., which all were followed by little more than a slap on the wrist. Not exactly discouraging to any hostile nation that wants to cause havoc in Europe.

… and can the EU react? Even if the EU found out who was responsible, there is little the bloc could do in response to such sabotage, other than impose (more) economic sanctions. Officials told Playbook the main action was now with national governments and their security agencies.

For a union with some 450 million inhabitants and one of the world’s largest economies, it’s a testament to its weakness that when it is attacked, it has no way of investigating let alone retaliating, but instead has to rely on its national members. As my colleagues asked this week, put simply: When will Europe learn to defend itself?

Scramble to secure infrastructure: Countries across Europe are now scrambling to secure their pipelines, cables, drilling platforms and LNG terminals, with officials warning that unidentified drones had been detected over Norwegian oil and gas platforms. Norway raised the security alert level around its platforms.

In another reminder of what’s at risk, the explosions happened just ahead of the official inauguration Tuesday of a new pipeline connecting Norway to Poland through the Baltic Sea.

Uncertainty: Officials from countries directly affected by the leaks told Playbook there was not yet any hard evidence to tell who was responsible for the attacks, as they happened deep underwater, with one saying authorities would “maybe never” know with certainty.

One thing is clear. The energy war just got hot.

FURTHER READING: If undersea energy and communications infrastructure are now a Russian target, Western navies will have to take rapid action, write Charlie Cooper and Charlie Duxbury.

NEW RUSSIA SANCTIONS

COMMISSION TO PROPOSE OIL PRICE CAP, OTHER RUSSIA SANCTIONS: EU ambassadors will today at 2:30 p.m. be briefed by the Commission on a new sanctions package on Russia, senior officials and diplomats told Playbook.

As Playbook can report, the Commission will also propose a price cap on Russian oil.

How it works: Shipping companies and insurance firms will be banned from transporting or insuring Russian oil, if the price at which it is sold is above a certain limit. That limit will be the price at which Russian oil is currently being sold in Asia, about 30 percent cheaper than current prices in Europe.

Global effect: Other G7 allies, in particular the U.K., where most tankers are insured, will also impose the same sanctions. The idea is that even if they don’t officially subscribe to the cap, countries such as China and India would have no incentive to pay more for the Russian oil.

Cyprus and Greece … had long been the sticking point, as their powerful shipping industries make a lot of money transporting Russian oil. Athens, Nicosia and Valletta have in previous sanctions rounds opposed measures that affect oil tankers. However, officials told Playbook a tentative solution had been agreed under which Greece, Cyprus and Malta will be compensated.

Sanctions sacrifice: Under the deal, the EU will soften its sanctions on other products, effectively removing the shipping ban on Russian fertilizers, cement and other products, officials tell Playbook. “It is do ut des,” one official said.

UKRAINE PRESSURES EU:Ukraine is tightening the screws on Brussels, just as EU ambassadorsdiscussthe country at their meeting today and are waiting for the European Commission’s proposal on the next sanctions package.

Message from Kyiv:Ukraine is putting pressure on the EU to include not just an oil price cap, but also an embargo on Russian gas and its nuclear industry in its upcoming sanctions package. “While you’re counting pennies, we are counting lives,” Oleg Ustenko, economic adviser to Ukrainian President Volodymyr Zelenskyy, told POLITICO in a virtual interview.

Reminder: The EU and the U.S. hope to have the price-capping mechanism for Russian oil exports in place by December 5, when EU sanctions banningseaborne imports of Russian crudecome into force, according to diplomats.

No loopholes:Ustenko stressed the package has to include a ban on insuring ships transporting Russian oil in both the EU and the U.K., he said. As noted, this is sensitive, especially among Mediterranean countries like Greece and Cyprus. More here.

Brussels Playbook: Pipeline attacks — Sanctions scoop — EU-Israel reset (3)

GAS PRICE CAP

COMMISSION MULLS DYNAMIC GAS PRICE CAP: Commissioners meeting this morning at their weekly College meeting will discuss a proposal to impose a “dynamic cap” on gas purchases and imports, senior officials told Playbook.

What’s next: If signed off on by the commissioners, the Commission will propose such a cap to EU energy ministers who are meeting Friday.

Recap: The goal of such a cap is to calm markets, which have been commanding irrationally high prices (up to ten times the price in the U.S. and more than double the price in Asia). The cap would be “dynamic,” meaning it would follow market trends to make sure it is higher than what other major importers pay, but much lower than current prices in the EU. Refresh your memory here on how such a “dynamic cap” would work.

What do we want? — Price cap! Energy ministers from 15 EU countries have called on Brussels in no uncertain terms to finally propose such a cap.

“This cap is the priority,” reads a letter signed by the ministers of Belgium, Bulgaria, Croatia, France, Greece, Italy, Latvia, Lithuania, Malta, Poland, Portugal, Romania, Slovakia, Slovenia and Spain, obtained by my colleague Victor Jack and which you can read here.

When do we want it? — Now! After waiting months for Energy Commissioner Kadri Simson to come forward with such a proposal, patience is running low among diplomats from those 15 countries that together would form a qualified majority if the Presidency joins.

Energy ministers have now set Simson a deadline of September 30 to do her job — propose legislation that EU countries call for.

Reality check: Chances of the cap actually being adopted are still low, as long as heavyweight Germany (for unclear reasons) and gas producers such as Denmark and the Netherlands (for understandable reasons) remain opposed to paying less for gas imports.

IN OTHER NEWS

QATARI SPORTS MOGUL ON THE FUTURE OF FOOTBALL: In a rare interview, with POLITICO’s Ali Walker, Qatari businessman and president of Paris Saint-Germain football club Nasser al-Khelaifi said he was not worried about the Super League’s case against UEFA at the European Court of Justice. And he’ll “never” join, even if the promoters come back with a revamped product.

Rivalries: Al-Khelaifi also slammed FC Barcelona’s commercial asset sale, arguing the Catalan club’s financial maneuvering was dangerous for the future of football.

Drive to survive: The Qatari executive also wants European football to take a page out of Formula One’s book, leveraging its premiere matches to create a multi-day “holiday destination,” complete with music and conferences as part of a wider entertainment product. Read all about it here.

GERMANY TO KEEP NUCLEAR POWER PLANTS ON: Germany will “probably” extend the runtime of two of its three remaining nuclear power plants until April, Economy Minister Robert Habeck said Tuesday, blaming energy supply issues in France for the decision. Read more.

EU-ISRAEL MEETING: The first EU Israel Association Council in a decade is due to take place next Monday afternoon, report Ilya Gridneff and Suzanne Lynch. Israeli Prime Minister Yair Lapid, who also holds the foreign minister role, is expected to attend. But while the meeting is a sign of rapprochement between the EU and Israel, several member countries will use the occasion to voice their concerns about Israel’s stance on Palestine, particularly the raid on Palestinian NGOs this summer. Read more here.

NORTHERN IRELAND PROTOCOL LATEST:British Foreign Secretary James Cleverly andEuropeanCommission Vice President MarošŠefčovič will speak over the phone Friday afternoon for the first time since Cleverly assumed his new role.

The big question: Will political talks on the Northern Ireland protocol resume this month after being paused at the end of February? In a bid to manage expectations, a U.K. government official told my POLITICO colleague Cristina Gallardo this call will just be a friendly first chat — the sort of congratulatory conversation that should have taken place immediately after Cleverly’s appointment, but was delayed due to Queen Elizabeth’s death. Wait for an actual in-person meeting for evidence of things actually moving forward.

HURRY IT UP: Senior officials in the Biden administration have voiced frustration at Brussels over the slow disbursement of European financial aid to Ukraine, the FT reports.

DIRE SITUATION: Slovakia’s prime minister told the FT that soaring electricity costs had left his country’s economy at risk of “collapse.”

AGENDA

— College of Commissioners meets

— College readout and press conference by Commissioners Didier Reynders and Thierry Breton on the Artificial Intelligence directive and a review of the product liability directive

— Press conference with Commissioners Valdis Dombrovskis and Nicolas Schmit on the social pillar, 1 p.m.

Roberta Metsola, EP president, meets with Yulia Navalnaya and Leonid Volkov, Alexei Navalny’s chief of staff and chairman of the Anti-Corruption Foundation. 11 a.m.

BRUSSELS CORNER

SPOTTED: At Elcano Institute’s event and drinks last night — Commission EVP Valdis Dombrovskis … Spanish Foreign Minister José Manuel Albares … Paraguay’s Ambassador to the EU Rigoberto Gauto … Spanish Ambassador to Belgium Beatriz Larrotcha Palma and Ambassador to the EU Marcos Alonso … Centre for European Reform’s Camino Mortera-Martinez … Bloomberg’s Jorge Valero … European Commission’s Mirzha de Manuel … Spanish Perm Rep’s Ana Belén Vázquez González … Spanish Embassy to Belgium and NATO’s Carlos Gallego.

ALSO SPOTTED:At theSoiréeSuisse,Les Jeux d’Hiver in the Bois de la Cambre — Swiss Ambassador to the EU Rita Adam … Swiss Ambassador to Belgium Philippe Brandt … MEPReinhard Bütikofer … European Commission’sBarbara Herbolzheimer,Sofia Asteriadi, Signe Ratso … French spokesmanJean-Noël LadoisCarole Ensch of the Luxembourg Permanent Representation.

BIRTHDAYS: Bulgarian diplomat Dimiter Tzantchev; MEP Tineke Strik; Les Echos’ Hortense Goulard; U.K. Department for Work and Pensions’ Robert Eagleton; Département du Nord’s Jeanne Duhem; Miloš Zeman, president of the Czech Republic; Ana Brnabić, Serbian PM; French actress Brigitte Bardot; Author Simon Winchester; Sheikh Hasina Wazed, prime minister of Bangladesh.

THANKS to Barbara Moens, Cristina Gallardo, Ali Walker and producer Grace Stranger.

**A message from Martens Centre: The European View is the open access policy journal of the Martens Centre that provides a platform for politicians, opinion makers and academics to discuss contemporary themes of European politics. The varied backgrounds of its guest authors enables the European View to offer better perspectives of any given topic, and by tackling a specific theme in each issue, the journal contributes to both timely debates and long-term policy considerations. Our latest issue, titled 'The changing realities of EU defence cooperation' focuses on the future of EU defence policy at a critical inflexion point. Want to know more? Visit our website to download the journal or read individual articles!**

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