Netherlands’ Admin Capital Is First City To Seek “Temporary Exemption” From EU Sanctions Against Russia

Remember when Europe showed Putin who’s boss when it demonstrated virtue-shattering solidarity with Ukraine by committing economic suicide and imposing sanctions on most Russian energy exports?

Well, a little over six months later, Europe is facing a historic economic and social catastrophe thanks to energy hyperinflation which has been unleashed just as the ECB is set to hike rates into a frigid winter recession. Worse, not only have western sanctions have been an unmitigated disaster, the pain has been compounded by the fact that Russia is enjoying a new Golden Age for its oil exports (as the WSJ describes in “Russia Confounds the West by Recapturing Its Oil Riches“).

So having realized just how meaningless and futile the sanctions were, Europe’s “virtue-shattering solidarity” is starting to shatter, and one by one, participants in the unbreakable alliance are quietly hoping to sail away from the European Titanic before it loses all power.

Take the Dutch city of The Hague – the country’s administrative and royal capital – which last Thursday said it would ask for a “temporary” exemption of EU sanctions against Russia, as it struggles to find a replacement for its contract with Russian gas supplier Gazprom in time, according to Reuters.

The Hague, which lost its existing access to Russian gas after the Ukraine invasion, has to find a new supplier of gas to replace its existing agreement with Gazprom. The city said it held an EU-wide tender in June and July, but failed to attract any bids from potential suppliers. Spoiler alert: it will find suppliers… it will just have to pay a lot more, something which apparently nobody in Europe realized back in February when everyone threw themselves off the sanctions cliff.

Individual talks with suppliers were certain to lead to an agreement, alderman Saskia Bruines wrote in a letter to the city council, but not before the Oct. 10 deadline.

“We will ask for an exemption for our current arrangement until Jan. 1 2023 to guarantee the safety of supply and to facilitate negotiations,” she said, adding that she was confident the delay would be granted, as The Hague had fulfilled the condition of holding a timely tender without a positive result.

However, she added that any new contract set to enter into effect on Jan. 1 would be significantly costlier than the city’s current arrangement with Gazprom. In other words, despite going back to square one, the Dutch metropolis will now have to spend order of magnitude more.

The Hague is one of many Dutch municipalities that have an energy contract with Gazprom, but is the first to indicate it will ask for an exemption to the sanctions. If granted what it seeks, expect every single other European municipality to follow suit.