The "trade-off" for lifting the Greek veto on the 21st sanctions package against Russia was a special exemption allowing Greek shipping companies to continue transporting Russian LNG to third countries, with Dynagas, owned by shipowner Giorgos Prokopiou, being at the center of the negotiations.
The new sanctions package, which originally aimed for stricter restrictions on the Russian energy chain, ultimately passed after difficult political negotiation, revealing deep divisions within the EU: on one side, the effort to apply further economic pressure on Moscow, and on the other, the protection of critical European business interests.
Intense negotiations behind the final agreement
The governments of the European Union finally agreed on a significantly weakened sanctions package against Russia, following weeks of tough negotiations during which several countries sought exemptions to protect their national interests, with Greece at the center due to its reaction regarding shipping profits.
Ultimately, the ambassadors of the 27 member states approved the 21st EU sanctions package on Thursday morning, ending the impasse that began on June 9, when the European Commission presented its initial proposal.
However, the final decisions fall significantly short of the initial plan, as many of the most ambitious provisions were scaled back or removed.
Greece was the final hurdle in negotiations
Talks continued until the final hours, according to Euractiv, with Greece being the last state that had not agreed, as it requested exemptions to protect its shipping industry.
Athens demanded an exemption that would allow companies, including the Greek LNG transport company Dynagas, owned by Prokopiou, to continue transporting Russian liquefied natural gas to countries outside the European Union.
According to European diplomats, the compromise reached through the mediation of Ireland provides a renewable annual exemption for the transport of Russian LNG to third countries, annual reviews of the arrangement, and a 12-month freeze on any changes to the price cap on Russian oil imposed by the G7.
The Greek merchant fleet, numbering more than 5,000 ships, carries about one-fifth of global cargo by deadweight, more than any other country.
Furthermore, Greece possesses the largest fleet of LNG carriers in the world in terms of capacity.
The agreement, however, still requires formal approval from all 27 member states.
The oil price cap at the center of the dispute
European governments sought to break the deadlock before the expiration of the temporary freeze on the G7 price cap for Russian oil.
Last week, EU countries agreed to extend the deadline to allow time for an agreement, while exerting pressure on Greece to accept a longer duration of the freeze in exchange for continuing the transport of LNG.
The European Commission had originally proposed a six-month freeze, which prohibits European companies from providing services to Russian tankers carrying crude oil above a specific price.
Without an agreement, the cap risked automatically increasing to $58 per barrel, up from the current $44, which could provide significant additional revenue to the Kremlin through oil exports.
High ambitions were scaled back
The package, which was originally described by diplomats as one of the most ambitious by the EU, emerged from negotiations noticeably weakened.
The effort by the Baltic countries to ban entry to Russian soldiers into the EU was significantly curtailed following reactions from France, Italy, and Greece.
The final provision applies only to short-term entry visas and does not cover everyone who participated in the war, but only those directly involved in combat or military operations.
The Raiffeisen case and Russian assets
Negotiations were also delayed for weeks due to Austria's insistence on allowing Raiffeisen Bank International access to frozen Russian assets in order to offset losses from legal claims in Russia.
The issue was ultimately transferred to a special reference in the legal text, with member states agreeing to re-examine it at a later stage.
Retreat on Russian seafood
EU countries also abandoned plans for a gradual phase-out of Russian seafood imports following reactions from Germany, Poland, and Portugal.
At the same time, Bulgaria blocked the attempt to impose sanctions on Patriarch Kirill of Moscow, head of the Russian Orthodox Church, securing his removal from the sanctions list.
New sanctions on 250 individuals and entities
Despite significant concessions, the new package still provides for adding approximately 250 more individuals and organizations to the EU blacklist.
However, the final form of the package reflects deep disagreements within the European Union, as the effort to step up pressure on Moscow clashed with the differing economic and strategic interests of member states.
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