The Wall Street Journal reports European Foreign Ministers Push Hungary to Back Russian Oil Ban
Hungary is particularly dependent on Russian oil. It gets 65% of its oil via the Druzhba pipeline from Russia.
In addition to Hungary's refusal to cooperate, Slovakia, the Czech Republic and Bulgaria have all sought more time to transition away from Russian oil.
Let's investigate how the EU functions.
Two Things the EU Wants
- Phasing out imports of Russian crude oil within six months
- Phase out refined products by year-end.
The EU is willing to give Hungary and Slovakia until the end of 2024 to stop importing Russian oil.
Hungary has a few of demands of its own.
Three Things Hungary Demands
- A guarantee of cooperation from the EU to meet it's oil needs
- Investment including refitting refineries, oil-storage facilities
- Extension of pipelines that would require agreement and investment by neighboring countries.
Refineries cannot just take any oil. They are built to handle a particular grade of oil.
Given its extreme dependency on Russian oil and no ability us use oil from the rest of the EU, (or a guarantee to get it) Hungary would be crazy to go along with the EU nannycrats.
Hungary’s Foreign Minister Peter Szijjarto said the cost of the refinery upgrades would be the equivalent of $729 million.
That's a lot of money for Hungary, but what about the EU?
EU vs US GDP
The United States and European Union are the two largest economies globally in nominal terms.
As of 2021, both together share 42.4% and 30.7% of the entire global GDP in nominal and PPP terms, respectively, according to Statistics Times.
“This is how we will be remembered: either the Union who managed to…send a very clear message to Russia or [the Union] who got stuck,” Lithuanian Foreign Minister Gabrielius Landsbergis said Monday. “The whole Union is being held hostage by one member state…who cannot help us find consensus.”
Regardless of what one thinks of Hungary's demands, (I find them more than reasonable), Repeatedly the EU is held hostage by one nation demanding something,
At times it is Hungary. Other times it is Poland.
Belgium held up a comprehensive free trade agreement between Canada and the EU for a decade.
Work on the Comprehensive Economic and Trade Agreement CETA began in 2008.
CETA finally passed in 2017 but in 2019 Belgium then challenged the deal in the European Court of Justices (ECJ).
There were protests over the trade agreement in a number of countries.
In 2019 the CETA case was finally closed when the ECJ upheld the deal.
In the US, it took a matter of days, not decades for agreement on sending $40 billion in military aid to Ukraine. US News reports McConnell Sees Wednesday U.S. Senate Vote on $40 Billion Ukraine Aid Bill.
Hoot of the Day
EU GDP is 72% of the size of the US, but it cannot come up with a lousy $729 million to support Hungary.
Nor does the EU have a comprehensive plan to upgrade pipelines or refineries, a requirement to actually phase off Russian oil.
Meanwhile, the US can come up with $40 billion in a flash, without even a close look at the details.
Finally, I am quite certain that Germany does not really want to block Russian oil. Rather, Germany gets to pretend that it supports an oil ban because Hungary alone can save the day.
This post originated at MishTalk.Com.
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