GERMAN Foreign Minister Annalena Baerbock said she expects the European Union to impose sanctions on Russian oil within the next few days, while Russian President Vladimir Putin warned of a response to the push by Sweden and Finland to join Nato (North Atlantic Treaty Organisation).  

EU members have been discussing the details of a 6th sanctions package for more than 2 weeks, with Hungary holding up progress as it seeks guarantees over its energy supplies. “I’m very confident that we’ll come to a conclusion in the coming days,” Baerbock told reporters in Brussels as she arrived at a meeting of EU foreign ministers on Monday (May 16). 

At the same time, the EU is preparing new guidance on how companies can pay for Russian gas without breaching sanctions in order to keep supplies flowing, sending European gas prices lower on Monday. Finland and Sweden are preparing to deliver their formal applications to join Nato after announcing their plans over the weekend. 

Sweden and Finland joining Nato isn’t in itself a threat to Russia, which has no problems with either country, Putin said, in his first public comment on their likely accession to the military alliance.

“But the expansion of military infrastructure to this territory will produce our response,” he told a televised Kremlin summit of leaders of former Soviet states in a Moscow-led defence grouping. “We’ll decide what that will be, based upon the threats created for us” by the two countries’ entry into Nato, he said.

In what the Kremlin called a “frank” phone call on Saturday, Putin warned Finnish President Sauli Niinisto that it would be a “mistake” to abandon Finland’s neutral status and join Nato, adding it would have a negative impact on relations.

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Ukrainian Foreign Minister Dmytro Kuleba said that he hopes his country will be accepted as an official candidate for membership by the European Union when leaders gather next month, arguing that public opinion in the EU would back such a move. 

“This is the moment,” he said in a Bloomberg TV interview in Brussels. “The post-war Ukraine will make the European Union stronger.” He also warned of the consequences if the EU refuses to advance Ukraine’s candidacy. “It will be a moral failure which will be judged by history,” he said. 

Some EU leaders have been concerned about raising expectations that Ukraine could be granted a fast-track route to membership. The country would need extensive reform of its institutions before meeting EU standards, and any suggestion of special treatment risks aggravating other candidate countries in the Western Balkans. EU membership is typically a lengthy process that takes 5 years or more,

The euro area’s economic rebound from the Covid-19 pandemic would almost grind to a halt and inflation would surge if there were serious disruptions to natural-gas supplies from Russia, according to new projections from the European Commission.

Under a severe scenario, the currency bloc’s economy would expand by just 0.2 per cent this year, with inflation topping 9 per cent, as governments struggled to replace the imports, it said. The base case in the first EU forecasts since Russia invaded Ukraine projects gross domestic product will advance 2.7 per cent this year and 2.3 per cent in 2023, down from February’s 4 per cent and 2.7 per cent.

BLOOMBERG