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The European Union failed to adopt its 20th sanctions package against Russia after Hungary vetoed the measure, EU High Representative for Foreign Affairs and Security Policy Kaja Kallas said Monday.
"This is a setback and message we didn't want to send today, but the work continues," Kallas said after a meeting of EU foreign ministers in Brussels.
Hungarian Prime Minister Viktor Orban announced the veto on the social media platform X, saying Budapest would not stand by while the Druzhba oil pipeline remains shut down.
Orban outlined Hungary's countermeasures: "No diesel shipments from Hungary to Ukraine, military aid to Ukraine will be rejected, the EU's 20th sanctions package will not be accepted."
Hungarian Foreign Minister Peter Szijjarto said on Feb. 20 that Budapest would also block a €90 billion ($106 billion) EU credit to Ukraine until oil deliveries via the Druzhba pipeline resume.
The Druzhba pipeline, which crosses Ukrainian territory to deliver Russian oil to Slovakia and Hungary, was damaged on Jan. 27. Budapest and Bratislava accused Ukraine of using the disruption for political purposes. Both countries suspended diesel fuel deliveries to Ukraine in response.
German Foreign Minister Johann Wadephul said he was surprised by Hungary's position. "If Hungary betrays its own struggle for freedom and Europe's sovereignty, I do not think that would be right," Wadephul said ahead of the meeting.
Wadephul said Germany would present arguments in Budapest and Brussels to persuade Hungary to reconsider, stressing that Ukraine is defending not only its own freedom but the freedom and sovereignty of all of Europe.
Polish Foreign Minister Radoslaw Sikorski said, "The Hungarian government is once again blackmailing Ukraine. This has been met with widespread disapproval and arguments urging Hungary to step back."
Kallas said she was "very sorry" that no agreement was reached, noting that Tuesday marks the war's somber anniversary. She said EU Council President Antonio Costa and European Commission President Ursula von der Leyen will be in Kyiv on Tuesday and would raise the matter with Orban.
"For all countries, all leaders, to have made a decision at the EU Leaders' Summit and now to step back from it is really sad. This is really not in line with the principle of sincere cooperation enshrined in the treaties," Kallas said.
Asked whether the EU has a backup plan if Hungary refuses to lift its veto on the €90 billion package, Kallas said frozen Russian assets could be used as an alternative.
"We had a 'Plan A' on the agenda, and it was about the use of Russia's frozen assets. Now if there won't be a 'Plan B,' perhaps we need to work on that," Kallas said.
"If this doesn't work, we can always go back to the use of frozen assets. We can do it faster then," she added.
The 27-nation bloc has already imposed 19 rounds of sanctions on Moscow over its invasion of Ukraine. Brussels proposed banning shipping services for Russian crude oil as part of the latest package.
While the sanctions package stalled, Kallas announced she was limiting Russia's diplomatic mission to the EU to a maximum of 40 personnel.
"We will not tolerate abuse of diplomatic power," she said.
Kallas said she is also working with the European Commission to potentially deny Schengen visas to "hundreds of thousands" of former Russian soldiers who fought in Ukraine.
"We do not want war criminals and saboteurs to roam our streets," she said.
Kallas stressed that Russia, not Ukraine, remains the obstacle to peace.
"Moscow has achieved none of its strategic goals. Its army is bogged down. Its economy is deteriorating rapidly and Ukrainians are resisting and maintaining their resilience," she said.
"We need to reverse the pressure on Ukraine to surrender its territories and instead focus on what Russia needs to do to meet the basic requirements for a just and lasting peace," Kallas added.
She outlined minimum demands, including Russia's recognition of borders, an end to sabotage operations, payment of war reparations, and the return of kidnapped Ukrainian children.
"Before talking with Moscow, we must clarify what we want to discuss. Russia's maximalist demands cannot be met with a minimalist response," Kallas said.
Asked whether she shares U.S. optimism about a potential peace deal in Ukraine, Kallas said she does not.
"The Russian negotiators are not serious at all and are not willing to discuss any political issues. I am not very optimistic that we will see any results in the coming weeks and months," she said.
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