Malta blocks EU's new Russia sanctions over shipping sector fears
Measures would put Malta’s shipping industry at a disadvantage, sources say
Malta is currently blocking new EU sanctions against Russia over fears that a proposed price cap on Russian energy will disproportionately impact Malta’s shipping sector.
The new sanctions would, among other measures, cap the price of Russian energy exports at 15% below market value.
Diplomatic sources told Times of Malta that while Malta agrees with the cap in principle, it is worried about its unintended consequences and is pushing for the complex mechanism to be simplified.
Sources say that Malta is particularly concerned about a lack of coordination among G7 countries over the measure, with EU member states effectively forced to abide by the cap while others, such as the US, do not have the same obligations.
An initial price cap agreed upon by the G7 countries first came into force in late 2022, although the EU and the UK have been pushing for the cap to be lowered for several months, following recent drops in the price of oil.
The European Commission proposed the new cap in June, with EC President Ursula von der Leyen pledging to discuss the proposal at a G7 meeting held later in the same month.
The proposed sanctions must be approved by all member states before coming into effect. This would be the 18th sanctions package imposed on Russia since 2014.
A meeting of the EU Committee of Permanent Representatives (COREPER) held on Sunday reportedly dragged on for several hours, as diplomats attempted to iron out the issue.
According to Ukrainian reports, Greece and Cyprus are also believed to have expressed concerns over the price cap’s impact on their own shipping industries, although they have not taken as firm a position as Malta.
Meanwhile, Slovakia is currently also vetoing the sanctions, fearing the impact of their proposed phase-out of Russian fossil fuels by 2028 on the Slovakian economy.
Slovak PM Roberto Fico is reportedly also pushing for legal guarantees in case Russian energy giant Gazprom, which holds a contract to supply Slovakia with fossil fuels until 2034, claims a breach of contract.