© OLIVIER MATTHYS/EPA
The EU will not lift sanctions on Russia while its war against Ukraine continues, European Commission President Ursula von der Leyen and European Council President António Costa said on Friday. Their statements came ahead of discussions at the European Council, where leaders were due to consider further support for Ukraine and the needs of its critical infrastructure before winter. The assurances followed Washington’s move to ease sanctions pressure in connection with a deal involving Russian diesel supplies.
Von der Leyen said the EU had supported the energy truce announced by US President Donald Trump, but accused Russia of failing to observe it. “We have seen that Russia did not respect it. Not a single minute. Instead, Russia escalated. We have to increase the pressure on Russia,” she said. She added that the Commission was working on a 22nd sanctions package and that the bloc would not lift any sanctions unless Russia stopped the war.
Costa also rejected any reduction in pressure. “We will not cancel any sanctions until Russia stops the war,” he said, calling for stronger support for Ukraine and increased pressure on Moscow to secure a genuine ceasefire. The statements set out the position of the Commission and European Council presidents; they were not, in themselves, a new sanctions decision by EU member states.
The US and EU sanctions regimes are separate. Washington’s decision concerns US restrictions associated with Russian diesel exports, while EU measures are adopted by the member states. Moscow said it had resumed diesel exports under the arrangement with the Trump administration, a development that has prompted concern in Kyiv and European capitals. The reported resumption of Russian shipments has brought renewed attention to the effect of energy revenue on the Kremlin’s ability to finance its war.
The Commission describes EU sanctions as a means of reducing Russia’s capacity to fund the war, imposing costs on its political leadership and weakening its economic base. The measures cover energy, trade and finance, alongside listings of individuals, companies and organisations. The EU’s sanctions framework against Russia has been expanded through successive packages since the full-scale invasion of Ukraine.
The leaders’ statements came as Ukraine prepared for another winter of Russian attacks on energy infrastructure. The European Council meeting agenda included continued support for Ukraine and the operational needs of its critical infrastructure. Von der Leyen said the EU would continue to support Ukraine through the winter. She also referred to progress on Ukraine’s accession process, saying the remaining negotiation clusters should be opened by the end of the year.
The EU has recently added measures targeting Russia’s military-industrial sector. In October, it adopted a package of listings aimed at companies and individuals connected to the country’s war effort, as covered in EU Today’s report on the latest sanctions. The diesel arrangement has also followed earlier tensions over the use of sanctions and energy policy, including the US deal with Moscow.
The EU’s stated position is that its sanctions will remain in place until Russia ends the war. The Commission is preparing further measures, while any new package will require agreement among member states. Friday’s statements did not change the existing regime, but made clear that the US decision on Russian diesel would not, by itself, prompt Brussels to ease EU restrictions.
© OLIVIER HOSLET/EPA
The revised proposal, circulated ahead of the European Council meeting scheduled for 15–16 October, would reduce the planned 2028–2034 financial framework by approximately eight per cent to around €1.6 trillion, calculated in constant prices.
Despite the reduction, the proposed budget remains approximately 30 per cent larger than the current seven-year framework. Germany, Sweden, the Netherlands and other governments concerned about national contributions have nevertheless argued that further restraint is necessary.
The compromise, detailed in negotiations over the EU’s next financial framework, reduces proposed spending across several areas while largely protecting the Union’s established agricultural and regional development programmes. The distribution of those cuts is becoming as contentious as the overall size of the budget.
Under the Irish proposal, agricultural and regional development allocations would decline by approximately three per cent compared with the Commission’s initial plans. By contrast, funding intended for competitiveness and security would be reduced by around 13 per cent, while external action and development cooperation face cuts of approximately 17 per cent.
The difference raises questions about whether the next EU budget can support the strategic ambitions repeatedly endorsed by European leaders.
The Commission has presented industrial competitiveness, technological development, defence readiness and economic resilience as central priorities for the remainder of the decade. Yet these sectors would absorb proportionately larger reductions under the revised framework than agricultural and cohesion programmes.
The consequences could extend to investments in advanced technologies, European industrial supply chains, research programmes and cross-border defence cooperation. They could also constrain the Union’s capacity to fund external partnerships and development initiatives.
The debate is particularly sensitive because the EU’s responsibilities have changed considerably since the previous budget was negotiated. Russia’s invasion of Ukraine has increased defence requirements, while competition with China and the United States has intensified demands for industrial investment.
The central disagreement concerns how much additional expenditure European governments are willing to finance through the common budget. Germany and other major net contributors face domestic fiscal constraints, rising borrowing costs and demands to increase national defence spending.
For these governments, accepting a substantially larger EU budget would add to financial commitments already being made through national budgets.
The Irish compromise therefore faces opposition from two directions. Some governments consider the reductions insufficient, while others fear that the remaining cuts will weaken programmes essential to their national economies.
Traditional recipients of agricultural and regional funding have an interest in protecting established expenditure. Governments seeking stronger European investment in defence, innovation and industrial competitiveness have different priorities.
The European Parliament is another obstacle. Its consent will be required before the final financial framework can enter into force, giving MEPs considerable leverage in negotiations with national governments.
The proposal also envisages approximately €55 billion in additional annual financing through new or revised EU revenue sources, including customs revenues, emissions-related income and corporate contributions.
The Commission’s framework for the next long-term budget reflects a broader debate over the extent to which the Union should develop independent financing mechanisms rather than rely predominantly on national contributions.
Such mechanisms would potentially give Brussels a more predictable revenue base. However, they also raise questions about fiscal sovereignty, the distribution of costs among member states and the political accountability of European taxation.
National governments remain reluctant to surrender substantial authority over revenue collection, particularly when proposed resources could impose costs on domestic industries or consumers.
The negotiations will influence the Union’s ability to respond to future enlargement. Ukraine and several Western Balkan countries are pursuing accession, but the financial implications of bringing additional members into the Union remain substantial.
Existing arrangements for agricultural subsidies and regional development assistance would require reconsideration if large new beneficiaries entered the budgetary system.
At the same time, the EU faces pressure to support Ukraine financially and strengthen defence production without depending indefinitely on extraordinary borrowing or ad hoc national contributions. These responsibilities cannot be addressed simply by preserving the structure of earlier budgets.
European Council President António Costa will seek to narrow the divisions among the 27 leaders, but agreement on the financial framework requires unanimity. Any government can withhold its consent if it considers the final distribution of costs unacceptable.
The forthcoming summit is therefore likely to establish the parameters of further negotiations rather than eliminate the underlying disagreements. The immediate political question is whether member states can reconcile their commitment to greater European strategic capacity with their reluctance to finance it collectively.
© TOMS KALNINS/EPA
Login