EU envoys on Wednesday, 8 June failed to reach a political agreement on the eleventh package of sanctions against Russia and are set to continue negotiations next week.

The primary reason for failure of an agreement is that Greece and Hungary still disagree with Ukraine's listing of some of their companies as "war financiers". Athens and Budapest want their companies to be removed from this list before they agree on a package of sanctions.

Meanwhile, several EU countries, including Germany and France, have expressed concern over the ban on sanctions circumvention, as they fear it could damage diplomatic relations.

The European Commission has softened its initial proposals to address these concerns, and one diplomat said that the issue seems to be one that can be resolved.

The European Commission presented another draft of the eleventh package proposal ahead of this Wednesday's meeting, but it fell short of an agreement. EU ambassadors will now discuss the proposal again at their meeting next Wednesday, 14 June, hoping to reach an agreement.

"We are getting closer [to agreeing on sanctions – ed.]," one diplomat commented, admitting that the European Council meeting in late June could be the final deadline for approving the decision.

In May, European Commission President Ursula von der Leyen said in Kyiv that the new sanctions would be aimed at combating the circumvention of trade restrictions already in place.

Media reports suggest that the European Union is also proposing to officially cut off Russian oil supplies to Germany and Poland.