Lithuanian FM tells EU to resist lifting Russian oil sanctions - BNS INTERVIEW

VILNIUS - Lithuanian Foreign Minister Kestutis Budrys has criticized Hungary's proposal to lift sanctions on Russian oil, urging the European Union not to succumb to the temptation of lowering fuel prices through such measures.

"When we talk about our decisions that were made for Europe's long-term independence from Russia (...), we cannot review them just because we will have a short-term shock. We have already had those shocks related to energy prices, remember electricity prices in Lithuania a few years ago. And we survived. Europe will survive in the same way," Budrys told BNS in an interview.

Global oil prices have surged amid the ongoing conflict in the Middle East, with Iran blocking the Strait of Hormuz, a key route for oil supplies, and attacking oil refining infrastructure in Gulf countries.

In response to the situation, Hungarian Prime Minister Viktor Orban called on the European Union to suspend sanctions on Russian oil and gas in order to reduce soaring prices.

"Let's not reduce everything to today's costs; that is strategic shortsightedness," Budrys said.

Despite European Union sanctions, Hungary and Slovakia can still import Russian oil because the bloc has applied an exemption for the Druzhba pipeline. However, Russian fossil fuels cannot currently reach these countries as Ukraine is delaying the pipeline's reopening. Kyiv says the pipeline was damaged during a Russian attack in January and needs time for repairs.

The European Union aims to fully phase out Russian oil by the end of 2027.

OTHER INTERVIEW TOPICS:

* Talks about importing Russian oil into the European Union are inevitable, but they must be resisted.

* The war in Iran also reduces Lithuania's security - both directly and indirectly.

* Applying Ukraine's air defense experience in the war in Iran could help strengthen ties with the US.

* Europe invests too little in defense.

* The European Union could abandon the unanimity principle, and Lithuania's interests would not suffer.

* The risk that the bloc will not extend individual sanctions against Russia remains.

* Russians who fought in Ukraine will be barred from entering Europe.

- MINISTER, HAVE YOU ALREADY FELT THE INCREASED FUEL PRICES?

- Not yet, but I saw the prices at gas stations, drove a car, and calculated what would happen. I have my traditional distances that I drive, calculating fuel consumption, how much it costs me to drive a car. And already at the festive table in a wider family circle, commemorating March 11, we talked about whether we should change the vehicle in one place or another. I am convinced that in all families, that discussion either is happening or will be soon.

- THAT'S PRECISELY WHY I'M ASKING, BECAUSE FOR MOST PEOPLE - NOT ONLY IN LITHUANIA BUT ALSO ELSEWHERE IN EUROPE - THE FUEL ISSUE IS PARTICULARLY SENSITIVE. IT IS STILL UNCLEAR HOW LONG THE CONFLICT IN THE MIDDLE EAST WILL LAST AND HOW LONG PEOPLE WILL HAVE TO PAY MORE FOR FUEL. ULTIMATELY, THIS COULD ALSO LEAD TO AN INCREASE IN FOOD PRICES.

SOME COUNTRIES ARE ALREADY INTRODUCING PRICE CAPS, IN LITHUANIA THERE IS TALK OF A POSSIBLE REVIEW OF EXCISE DUTY, AND HUNGARY PROPOSES LIFTING SANCTIONS ON RUSSIAN OIL. HOW CAPABLE ARE LITHUANIA AND THE EUROPEAN UNION OF RESISTING SUCH A TEMPTATION?

- I think that all the consequences you mentioned will occur, regardless of the duration of the conflict. Of course, the longer the duration, the greater the impact on all prices, including inflation. Yes, this is a big challenge, but it is not a reason to change our strategic positions for short-term effects, especially regarding our relationship with Russia. I would point out that the price is still determined by the market. Yes, that market is distorted because there are oligopolistic structures - OPEC and similar, they agree on production volumes, export volumes, but it is still globally determined.

I do not see that we could get any more favorable prices from Russia for nothing. We see what the price of cheaper oil is in the case of individual states in the European Union - it is political autonomy, it is acting as an agent for Russia in certain situations. I would be ashamed to live and work for such a state that would do such things for a few dollars cheaper per barrel of oil, which I see others are forced to do.

- SO YOU DON'T SEE A RISK THAT THE WAR IN IRAN COULD AFFECT THE EUROPEAN UNION'S PLANS TO COMPLETELY ABANDON RUSSIAN OIL BY THE END OF 2027?

- Such talks will certainly happen, and such proposals will be made, which is natural. We should not be surprised that various ideas come, of course, from certain industries that are very sensitive to energy price changes. However, this should not be the basis of our decisions.

When we talk about our decisions that were made for Europe's long-term independence from Russia (due to Russia's long-term aggressive policy, which we also see in the future), we cannot review them just because we will have a short-term shock.

We have already had those shocks related to energy prices, remember electricity prices in Lithuania a few years ago. And we survived. Europe will survive in the same way.

I hear when people talk about losing competitiveness. In the sense that Europe may lose competitiveness if our conditions are completely different compared to other regions of the world. We are a geoeconomic unit that is under a lot of pressure from all sides. However, when it comes to oil and natural gas prices, which are related, it will affect us all equally.

Here I would see a reason to cooperate more with the United States and Israel, the states of the region, in seeking the fastest possible solutions and diplomatic resolutions in this situation. Let's not reduce everything to today's costs; that is strategic shortsightedness.

- FUEL PRICES ARE RISING, RUSSIAN OIL EXPORTS ARE GROWING, THUS FILLING THE BUDGET, THE US MILITARY EQUIPMENT ARSENAL IS BEING USED FOR ATTACKS AGAINST IRAN, NOT TO SUPPORT UKRAINE. MOREOVER, IF GULF COUNTRIES START ARMING THEMSELVES MORE ACTIVELY, IT WILL BECOME EVEN MORE DIFFICULT FOR EUROPE TO ACQUIRE MILITARY EQUIPMENT. FROM YOUR PERSPECTIVE, DOES THE WAR IN IRAN NOT REDUCE LITHUANIA'S SECURITY?

- Instability anywhere in the world, military conflict, of course, affects our security. Both directly and indirectly.

Directly through the situation of our citizens in the states of the region, which have become targets of Iranian attacks without any basis. It also directly affects because a NATO state was attacked - Turkey, missiles were shot down more than once. An EU member state, Cyprus - also. Of course, this is our direct neighborhood. After all, our relations with the states of the region are very important in terms of security. Iran's ballistic missile program is also directed against us. So the direct impact is obvious.

Indirectly - through reduced attention to the war against Ukraine, due to future reductions in the supply of various military equipment - yes, we also record that. It is difficult for anyone to see benefits from the mere fact that a war is happening, but we also cannot forget the tasks that the United States and Israel have set for themselves. We cannot allow the ayatollah regime to have nuclear weapons. We will simply have another situation that we will not be able to reverse, as happened with North Korea. With the same ballistic missiles - look at the extent to which all neighboring states are attacked - from Azerbaijan to Oman. It is obvious that if these actions have already begun, they must have a logical end: Iran must not have the ability to terrorize everyone in a row.

This drew our attention to another aspect - the state of air defense in the Gulf states and Europe. I really have many doubts about what our air defense would look like if we had received such a cloud of ballistic missiles in Europe. I spoke with almost all the foreign ministers of the Gulf states, also about their air defense. I am pleasantly surprised by the effectiveness of the measures they have. The number of casualties, compared to the number of missiles launched, is very small; these are mostly accidental debris.

It is obvious that those states that have withstood this blow, when the war ends, will further increase their reserves, and the demand for air defense in the world will grow exponentially. This is a big reminder to Europe where we are and what kind of first strike we would expect from Russia's air attacks, drones, missiles, and how we could stop all this.

- WHAT CAN EUROPE AND SPECIFICALLY LITHUANIA DO HERE? THERE IS A LOT OF TALK ABOUT THE NEED TO INVEST MORE IN AIR DEFENSE, TO ENSURE PRODUCTION LINES, BUT WHAT TANGIBLE STEPS CAN BE TAKEN TO GET THIS WHOLE TRAIN MOVING?

- One of the things is to show long-term demand to the market. Seeing how sluggishly the defense industry market reacts, we need to say not that we will only buy in three to four years, but that we will buy for decades to come. We have to do that, but equally, we have to think about increasing demand and creating weapon systems that would allow us to destroy launchers.

I would point out that American targets are also the places from which missiles fly, so that Iran cannot use them, because not all missile reserves can be easily reached. Similarly, thinking about a military conflict with Russia: if we only think about air defense and only take the blow, that is not the way to victory. We will need to immediately attack deep into the country from where they fly. We will need long-range, high-precision weaponry. Here, Europe is really lagging and should work on it. America's capabilities in this area are really much greater.

Another thing is that there is room to cooperate on a much broader and different scale with Ukraine. This is a great time for Ukrainians to share their expertise with the Gulf countries. It is also a reminder that we in Europe should involve Ukrainians much more in the design of our defense systems.

- YOU ARE TALKING ABOUT DECADE-LONG PLANS. PERHAPS EUROPEAN POLITICIANS SHOULD SIMPLY SIT DOWN, SIGN A DECLARATION, A PROMISE THAT A SPECIFIC AMOUNT OF MONEY WILL BE INVESTED OVER THE NEXT TEN YEARS, SO THAT IT WOULD BE A WRITTEN GUARANTEE FOR BUSINESSES TO OPEN NEW SUPPLY CHAINS, BUILD NEW FACTORIES?

- It's not that businesses don't believe our documents. By the way, some of them are unnecessarily classified, which is why I advocate that we should declassify some of them. All air defense needs, everything we need, is written in NATO capability targets. They are just marked with a high secrecy classification so that no one knows. If the citizens of NATO countries knew what their governments have committed to do in the near future, I am convinced that the pressure to increase defense spending would be greater. Because the question would arise: "Do we really have everything here?" No, you have nothing. You need to go, acquire, create, and work. That part, it seems to me, is known to the market.

What the market does not believe are the words of politicians. They understand that empty rhetoric has been seen many times before, and why should it be different this time? I very much hope that in the coming months until the Ankara summit, we will see real numbers from certain states that promised to reach 2 percent already in 2025. If not, then we will certainly have serious shocks both in our transatlantic relations and - we don't need an American whip every time - we won't be able to look each other in the eye.

I see that defense spending in Europe is not increasing. I see that there is a softening, a powdering of the situation, talk about political will to allegedly ensure autonomy, which is just enough. We need hard currency, we need to show needs to businesses, place orders. Then we will solve another problem - that businesses cannot produce fast enough because there are no production lines. These are big challenges, but the lack of desire to increase defense spending is the main fundamental problem.

- WHAT COULD MOVE THAT? A MISSILE FALLING ON EUROPE?

- I have tried almost everything from my repertoire - and those scenarios, how things might look: military, economic, financial. There are talks that a Russian tank will not cross the Iberian Peninsula. Yes, but a missile can. (...) I have tried all such arguments. All that's left is publicizing and shaming, nailing it like on a street bulletin board. Then we again come to the question of whether we, as allies with our commitments to each other, are strong. If we commit to dying for each other, how can we not fulfill the promise to ensure that it is not necessary? Because that is deterrence.

- MOVING ON TO THE UKRAINIAN DIMENSION IN THIS MIDDLE EAST CONFLICT. CAN THE KNOWLEDGE OF HOW TO SHOOT DOWN SHAHED DRONES, HOW TO ENSURE AIR DEFENSE, BECOME A BARGAINING CHIP IN PEACE TALKS WITH RUSSIA?

- Everything that brings Ukraine closer to the United States is good. And it still has benefits in the longer term; helping each other in more difficult situations, showing solidarity through practical actions, is an investment. I have no doubt about that.

That is why we do not miss this opportunity to strengthen our relations with the Gulf states. This is a reason for me to talk to ministers and not only express political solidarity but also to keep this topic high through the actions of the European Union.

I am convinced that we will also have economic and trade benefits when the war ends. It is also in Ukraine's interest to contribute its expertise in this situation with the idea that states become closer this way. Will the strategic picture change, in which peace talks are taking place, or let's say, peace talks are not taking place at the political level - I would like to be optimistic that yes, it will happen. But seeing Russia's behavior, that Russia is the main reason here, not the US why we do not have a result, it is unlikely. Because this situation is relatively beneficial for Russia.

- FINALLY, DIRECTLY ABOUT IRAN. EUROPEAN DIPLOMATS AND OFFICIALS UNOFFICIALLY AGREE THAT THE STRIKES ON TEHRAN BALANCE ON THE EDGE OF INTERNATIONAL LAW. DO YOU THINK THAT SUCH ACTIONS BY THE US AND ISRAEL ARE NOT A KIND OF GIFT TO RUSSIA, WHICH HAS LONG DEVELOPED THE NARRATIVE OF A PREVENTIVE OPERATION IN UKRAINE IN ITS PROPAGANDA?

- International law in its full scope has not worked anywhere and is not working at the moment. I mean, in no area, be it the prohibition of aggression, the observance of human rights, or other things, or the respect for the principle of sovereignty. It also does not work for it to work; it needs to be defended, sometimes it needs to be defended by force. Yes, I would very much like our world to be one for which the United Nations Charter was written and a series of rules were created, and states committed to abide by them. However, economic coercion works, military coercion works, violating those rules. Lithuania has been targeted many times by such behavior by China or Russia. We understand that it is not ideal, we understand that it is bad that negotiations on Iran's nuclear program and missile program failed.

However, we understand that Iran's behavior is completely outside the bounds of international law. The creation of terrorist organizations, the use of organized criminal groups for violent crimes in Europe, the creation of groups that undermine the territorial integrity of states in the region, constant blackmail with military means to disrupt free navigation, nuclear weapons programs and development...

I could list and list. I'm not even talking about human rights violations - thousands, tens of thousands of young Iranians were killed in protests in Iran less than a year ago. So when we talk about such an embodiment of evil and about what is being done in the region, we cannot impose the cleanest white glove standard on our side. Things don't happen that way. Or else we will not solve these situations, and they will only repeat and repeat.

International law must be defended, it must be followed, which is why the 27 EU states clearly expressed their concerns that there would be a return to the diplomatic path, that there would be a return to international law. But in this situation, when we talk about irreversible nuclear weapons production processes, then let's choose options. I'm not saying it's a dilemma every time, but some things need to be stopped. And I see the consequences when we, as the world community, did not stop those things. One of them is North Korea, where we understand that nuclear weapons are inviolable. And what will such states, which have envisioned, for example, the destruction of Israel as such in their state ideology, do with that inviolability?

- BUT IS THE MOST APPROPRIATE WAY TO RESPOND TO VIOLATIONS OF INTERNATIONAL LAW BY THE SAME MEANS? IN OTHER WORDS, IN YOUR OPINION, WERE ALL DIPLOMATIC MEANS EXHAUSTED IN RESOLVING THE SITUATION IN IRAN?

- Lawyers can give you a legal assessment, I can give a political assessment. The political assessment is - yes, they were exhausted, time was running out. I remember more than one Foreign Affairs Council meeting last spring, how it was discussed how many months Iran would reach the point of no return, speaking about the nuclear program. It was discussed what we do next. As you know, several countries appealed for sanctions against Iran and so on. We saw that those sanctions did not lead to a result because the regime needed to acquire capabilities with which it could deter everyone.

So yes, we can consider what would have changed after a month or two months. However, I would very much like to hear an answer, by what other means of this existing world, and not a non-existent world, can such behavior be stopped? Just as the cleanest, highest, and most impeccable standard should be applied in all cases to Ukraine, which faces absolutely brutal behavior, war crimes, kidnapping of people. In other words, when certain measures are applied at the brink of genocide, when there is talk of destroying civilian infrastructure, what do we then demand from the victim of attacks? That you adhere to this agreement, and that you adhere to that agreement? So for me, it's the same thing.

And after the attack against all neighboring states, after that rain of ballistic missiles on the heads of states where our citizens are also present - it seems to me that here everyone understands with whom we are dealing and what Iran is about. That is why we must sit down together and decide how we will achieve these goals with the lowest military costs, with the fewest casualties, and for diplomacy to engage as quickly as possible. Therefore, Iran, at our urging, at Lithuania's urging, contributing to the calls of European Union institutions, must stop these attacks and sit down at the negotiating table.

- LET'S MOVE ON TO UKRAINE, WHICH YOU MENTIONED. GIVEN THE OIL CRISIS CAUSED BY THE WAR IN IRAN, THE DISPUTE BETWEEN HUNGARY, SLOVAKIA, AND UKRAINE OVER THE DRUZHBA PIPELINE, AND BUDAPEST'S BLOCKING OF A 90 BILLION EURO LOAN TO KYIV, DOES THIS MEAN THAT THE ADOPTION OF THE 20TH SANCTIONS PACKAGE IS FROZEN INDEFINITELY?

- It is currently stuck. I know that considerable efforts are being made to lift that blocking. The difficult circumstance - but here also related to that is the expectation that the situation may change - is the internal political processes in Hungary and the ongoing elections, in which, to great regret, support for Ukraine, the war against Ukraine, has become an election topic. And that aggressive behavior - we saw the arrest of collectors, confiscation of property, now some kind of tourist expert delegations to Ukraine show that the Hungarian ruling party, it seems, likes to escalate this tension, increase Ukraine's negative image, and try to gather some votes that way.

This is completely unacceptable to me. Every time I look with disgust at what is happening. Well, and that is the expectation that when their internal political processes end, perhaps the situation will adjust somewhat. However, we should not put all our eggs in this basket of expectations, because I am convinced that such frequent repetition of such behavior recently programs us to see the same situations in the future.

And we must think about decision-making and about restricting voting rights for those states that clearly abuse the powers granted. Yes, unanimity was foreseen, but in the spirit of cooperation, there are certain provisions of solidarity in the European Union. And you have to seek agreement. And if you just veto everything because you can, you can destroy anything. So the question is, do we all really need to be in one European Union here? Maybe some other union, which also ends with EU (Eurasian Economic Union - BNS), would suit them better?

- DO I UNDERSTAND CORRECTLY - IT'S TIME FOR THE EUROPEAN UNION TO ABANDON THE UNANIMITY PRINCIPLE AND SWITCH TO QUALIFIED MAJORITY VOTING?

- Yes, I agree. (...) States, and especially small states, wanted unanimity, especially in common foreign and security policy, seeing how large states make certain decisions over their heads or disregarding the interests of small states. We certainly have those experiences, I will not list them all here now, when, despite us, they wanted to do things. Therefore, it seemed that when there are certain fundamental decisions, we must have the opportunity to say "No."

For us, these are relations with Russia, first of all, relations with Belarus, with these regimes. We have seen all sorts of ideological and badly founded policies, such as the belief that through deeper cooperation, openness, they will become better people and will no longer want to conquer us. So you must have tools to stop such ideological nonsense. Now when I see that we are geopolitically united and increasingly on the same page in terms of strategic assessment, and I see how someone abuses this granted right and turns our geopolitical actor into some kind of mud that cannot move forward, then I start to think that yes - we must expand the application of the qualified majority voting principle. To leave certain areas that will inevitably require unanimity.

- FOR EXAMPLE, THE BUDGET...

- And certain decisions on enlargement. (...) I asked my colleagues to prepare a list of topics and cases when Lithuania needed unanimity to defend its essential primary interests. There were actually very few such situations. Based on this, I believe that the future benefit of the European Union's speed and adequacy in world events will be greater than the harm if we cannot veto somewhere.

- SINCE BUDAPEST IS BLOCKING A 90 BILLION EURO EU LOAN TO KYIV, BRUSSELS IS ALREADY TALKING ABOUT AN ALTERNATIVE PREVIOUSLY CONSIDERED - BILATERAL LOANS. HOW LARGE A LOAN COULD LITHUANIA PROVIDE TO UKRAINE?

- I see these efforts to spread such ideas as very harmful and destructive, because it distracts attention. (...) I know that this idea of bilateral loans has been spread in certain circles and is already being warmed up. I think this is done to distract attention from the problem of why we cannot provide this loan. That is from Hungary. So, it seems to me, let's focus on that state, which had already agreed to allocate, which is not participating with any of its money, but is still blocking the provision of such a loan, and let's solve the issue fundamentally. In other words, by putting more pressure on Hungary.

The European Commission has enough tools. How much money does Hungary itself receive from the European Union? We cannot allow blackmail. (...) We already pay for everything. Every decision of theirs costs us a lot of money, effort, and we still have to give something. So we will soon write a new Treaty on European Union, which will have a separate section on what Hungary gets for each vote. Listen, this is not possible.

So we will not open that discussion about what we can lend bilaterally. Lithuania does a lot: 0.25 percent of GDP, participates in other measures, we contribute disproportionately strongly - and that's good, I'm proud of it - to Ukraine's preparation for EU membership through various programs. This is where we will work.

- STILL REMAINING A BIT ON EUROPEAN UNION AFFAIRS. ON MARCH 15, INDIVIDUAL SANCTIONS AGAINST RUSSIA EXPIRE, THE EXTENSION OF WHICH IS ALSO OPPOSED BY HUNGARY AND SLOVAKIA. WHAT WILL LITHUANIA DO IF THE SANCTIONS EXPIRE AND ARE NOT EXTENDED?

- I believe it will succeed. I don't know what the price will be. The process is not over, this is a question for this week. Yes, there is a risk that not only individual but also certain sectoral sanctions will fall. And here for me is an example of how Russia's agency works in making European Union decisions, aiming for objectives favorable to itself.

And here everything is in one picture for me: both those oligarchs, loved for some reason, whom they want to remove from the lists, and the desire to have slightly cheaper oil. Who can rule out that behind this are kickback schemes, that there is shadowy and dirty financing for ongoing processes? Based on what I have seen in Lithuania, what this leads to, I could say that it is very likely that the same schemes are applied in other European Union states.

- YOU MEAN HUNGARY?

- I mean not only there. Who participates in those schemes? Look, if intermediaries are involved, if there are some exceptional conditions with Russia - I can tell you: such things don't happen for nothing. And I see how it comes back later. And then, when I see certain oligarchs whom someone wants to remove, then the question arises for me: how many hundreds of millions does that cost? In other words, how do you collect that money?

- BUT WHAT IS LITHUANIA'S PLAN B?

- We are working on that right now in Brussels. I will certainly not provide my opponents in the European Union with tools here so that they can preempt it. Our representation is currently working intensively on this issue, I follow it daily myself.

- YOUR COLLEAGUE, INTERIOR MINISTER VLADISLAVSD KONDRATOVICIUS, SAYS THAT LITHUANIA IS ALREADY PREPARING TO INTRODUCE A BAN ON ENTRY FOR RUSSIANS WHO FOUGHT AGAINST UKRAINE. CAN YOU ELABORATE ON WHAT THAT WOULD LOOK LIKE? WOULD IT BE A NATIONAL RESTRICTION THAT ONLY LITHUANIA WOULD APPLY?

- We aim for it to be a Schengen restriction. We are working together with like-minded states, Estonia, first of all, preparing lists of persons whom we will include not only in our national restriction. Our goal is that a million, probably several million people who have participated in the war against Ukraine, never enter the European Union.

They will be able to travel around Siberia or somewhere else, but no resorts, no trips, no being among civilized people. For that, we need to include them not in national lists - we don't let them in anyway, we don't issue visas - but we need to include them in Schengen lists. This also requires a justification package, and the system itself needs to be able to adapt to it.

We have already prepared the first batches of such persons, in cooperation with Ukrainians. We want this to be done on a European scale. Some technical solutions are also needed, as the system is not adapted for such a quantity.

The scale of visa issuance (to Russians - BNS) increased in the European Union last year. (...) So we need to prevent at least bandits and war criminals from traveling.

- WHEN COULD THIS BE?

- This is a real-time process. We simply see that technically, the entire Schengen Information System needs to be prepared and justification packages need to be prepared. Therefore, it will take time. But that this is the aspiration with a very strong message to those fighting on the Russian side, that is unequivocal.

- THANK YOU FOR THE CONVERSATION.