EU Prepares Alternative Measures to Maintain Russia Sanctions
The European Commission is developing contingency plans to preserve economic sanctions against Russia if Hungary vetoes their extension in July 2025.
These workarounds include employing capital controls and tariffs that would require only a majority approval rather than unanimity among EU members. Currently, sanctions include €200 billion in frozen Russian state assets and various import restrictions. The EU aims to maintain pressure on Moscow during peace negotiations with Ukraine, while Hungary's Prime Minister Viktor Orbán has repeatedly obstructed sanctions efforts.
A 17th package of sanctions targeting companies helping Russia evade restrictions is expected to be implemented soon, along with plans to phase out Russian gas by 2027 through legal mechanisms that bypass the traditional sanctions framework.
Forecast Scenarios
Realistic Possibility (45-55%): Legal Innovation Preserves Most Sanctions
The EU successfully develops alternative legal mechanisms that maintain approximately 70% of current sanctions against Russia, including the critical asset freezes and major import restrictions. Hungary exercises its veto on some traditional sanctions, but the patchwork of alternative measures largely maintains pressure on Moscow. Legal challenges emerge from affected Russian entities, but courts initially uphold the EU's authority to implement these measures. The approach creates some regulatory complexity but demonstrates the EU's ability to pursue foreign policy objectives despite internal disagreements.
Likely (55-75%): Sanctions Framework Fragments
The EU's sanctions regime against Russia transforms into a more complex, multi-tiered system with varying legal bases and implementation mechanisms. Some measures continue under traditional sanctions, while others shift to trade restrictions, capital controls, and bilateral agreements. This fragmentation creates enforcement challenges and regulatory inconsistencies across member states, with some implementing stricter measures than others. Russia exploits these gaps through third countries, necessitating ongoing adjustments by the EU. Despite these challenges, most economic pressure on Russia remains intact, though with reduced efficiency.
Unlikely (30-45%): Hungary Compromise Maintains Unity
Intensive diplomatic efforts lead to a compromise with Hungary that enables the extension of most sanctions under their original legal framework. This agreement likely involves concessions to Hungary in other policy areas, potentially including EU funding allocations or flexibility on rule of law requirements. The unified approach provides greater legal certainty but comes at the cost of some sanctions being weakened to secure Hungarian approval. This scenario maintains EU unity at the expense of optimal sanctions design, while establishing a concerning precedent for future negotiations.
