Von der Leyen Proposes New Russian Sanctions and Oil Ban, Plans for Ukraine Reconstruction

European Commission President Ursula von der Leyen said on May 4 that the commission planned a sixth round of punishing sanctions against Russia and an oil ban, while urging the European Union to invest in rebuilding Ukraine.

Speaking at the European Parliament, von der Leyen announced new sanctions against Russian high-ranking military officers she said were responsible for war crimes in Bucha and the “siege of Mariupol.”

Furthermore, she said there were plans to “de-Swift,” or remove Russia’s largest bank, Sberbank, and two others from the international financial transaction system. Von der Leyen called the institutions “systemically critical to the Russian financial system and [Russian President Vladimir] Putin’s ability to wage destruction” in Ukraine.

Three Russian broadcasters will be banned from the European Union, including online, she said, and European “accountants, consultants, and spin doctors” will be prohibited from providing services to Russian companies.

She said the commission would “propose a ban on all Russian oil from Europe,” moving away from crude oil imports within six months and refined products by the end of the year.

Von der Leyen also proposed that European Union member states begin working on a significant reconstruction package to help the country rebuild.

Such investment in the country would “pave the way for Ukraine’s future inside the European Union,” she said.

Ukrainian Prime Minister Volodymyr Zelensky said in April that reconstruction costs could easily top $600 billion (€570 billion). Credit: Ursula von der Leyen via Storyful

Video transcript

URSULA VON DER LEYEN: Thank you, Madam President [INAUDIBLE] Roberta, Madam [INAUDIBLE] Honorable members, next week, we will mark Europe Day. It is the 72nd birthday of our union. And on this Europe Day, we will talk about, of course, the future of our union, how we make it stronger, more resilient, closer to the people.

But the answer to all these questions we cannot give alone in these days. The answer is also given in Ukraine. It is given in Kharkiv, where Ukrainian first responders venture into the combat zone to help those wounded by Russian attacks. It is given in the small town of Bhucha, where survivors are coping with the atrocities committed against civilians by Russian soldiers.

And it is given these days in Mariupol, where Ukrainians are resisting a Russian force, which greatly outnumbers them because they are fighting to reaffirm basic ideas that they are the master of their future and not a foreign leader, that it is the international law that counts and not the right of might, and that Putin must pay a price, a high price for his brutal aggression.

Thus, the future of our European Union is also written in Ukraine. And therefore, today I would like to speak about two topics. First, about sanctions. And second, about relief and reconstruction for Ukraine. Today, we are presenting our sixth package of sanctions.

First, we are listing high ranking military officers and individuals who committed war crimes in Bhucha and those who are responsible for the inhuman siege of the city of Mariupol. This sends another important signal to all perpetrators of the Kremlin. We know who you are. We will hold you accountable.

You're not getting away with this. Second, we finally de-SWIFT Sberbank. Sberbank is one of the-- is the largest Russian bank. It holds around about 37% of the whole banking sector. And we will also de-SWIFT two other major banks in Russia. By that, we hit banks that are systemically critical to the Russian financial system and Putin's ability to wage destruction.

This will solidify the complete isolation of the Russian financial sector from the global system. Third, we're banning three big Russian state-owned broadcasters from our airwaves. They will not be allowed to distribute their content anymore in the European Union in whatever shape, or form, be it on cable, via satellite, on the internet, or via smartphone apps.

We have identified these TV channels as mouthpieces that amplify Putin's lies and propaganda aggressively. And we should not give them a stage anymore to spread these lies. Fourth, the Kremlin relies on accountants, consultants, and spin doctors from Europe. And this will now stop.

We are banning those services from being provided in Russian, to Russian companies. And my final point, number five, on sanctions, is oil. When the leaders met in Versailles, they agreed to phase out our dependency on Russian fossil fuels. And the last sanction package, as you know, we started with coal.

Today, we are addressing our dependency on Russian oil. And let us be clear. It will not be easy because some member states are strongly dependent on Russian oil. But we simply have to do it. So today, we will propose to ban all Russian oil from Europe. This will be--

[APPLAUSE]

This will be a complete import ban on all Russian oil, seaborne and pipeline, crude and refined. We will make sure that we phase out Russian oil in an orderly fashion. So in a way that allows us and our partners to secure alternative supply routes and, at the same time, be very careful that we minimize the impact on the global market.

And this is why we will phase out Russian supply of crude oil within six months and refined products by the end of the year. Thus, we maximize the pressure on Russia. While, at the same time, and this is important, we minimize the collateral damage to us and our partners around the globe, because to help Ukraine, we have to make sure that our economy remains strong.

Honorable members, with all these steps, we are depriving the Russian economy from its ability to diversify and to modernize. Putin wanted to wipe out Ukraine from the map. And he will clearly not succeed. On the contrary, Ukraine has risen in bravery and in unity.

And it is his own country, Russia, that Putin is sinking. Honorable members, we want Ukraine to win this war. But we also want to set the conditions for Ukraine's success in the aftermath of the war. And this is my second point, relief and reconstruction. The first step is immediate relief.

This is about short term economic support to help Ukraine's cope with the fallout of the war. We have done a lot already. Let me remind you our macro-financial assistance package or the direct support to the Ukrainian budget. In addition, we recently proposed to suspend all import duties on Ukrainian exports to our union for one year.

And I am sure that the European Parliament will put its weight behind this idea in this proposal. But we all know this is not enough for the short term relief. Ukraine's GDP is expected to fall by 35% to 50% this year alone. And the IMF estimates that from May on, Ukraine needs 5 billion euros per month plain and simply to keep the country running, so to pay pensions, to pay salaries, to provide for basic services.

We have to support them. But I also know that we cannot do this alone. So I very much welcome that the United States announced massive budgetary support. And we, as team Europe, we have to do our share, too.

[APPLAUSE]

But then in a second phase, there's the wider reconstruction effort. And you all know that the scale of the destruction is staggering, hospitals and schools, houses, roads, bridges, railroads, theaters, factories, you just name it. So much has to be rebuilt.

Of course, in the fog of war, it is difficult to come up with a precise estimate. But economists are talking about several hundred billion euros. And here, honorable members, I think Europe has a very special responsibility towards Ukraine with our support and, of course, with the help of the international financial institutions, and other global partners.

Ukraine can rebuild their country for the next generation. And this is why today I propose to you that we start working on an ambitious recovery package for our Ukrainian friends. If we do it right, this package should bring massive investments to meet the needs and the necessary reforms in parallel. So it should address the existing weaknesses of the Ukrainian economy and lay the foundation for sustainable long term growth.

It could set a system of milestones and targets to make sure that the European money truly delivers to the people of Ukraine and is spent in accordance with European rules. It could help fight corruption. We have to do that.

It could align the legal environment with European standards and radically upgrade Ukraine's productive capacity. And this will bring the stability and the certainty that is needed to make Ukraine an attractive destination for foreign direct investment. And eventually, honorable members, it will pave the way for Ukraine's future inside the European Union. [UKRAINIAN]. Long Europe.

[APPLAUSE]

- Thank you very much. Commission President, I now give the floor--

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