Europe relies on Russia for a third of natural gas
Refusal to pay in rubles such as Germany and France
Russian President Vlamidir Putin has signed a decree stating that from April 1, if foreign companies do not pay for Russian gas in rubles, the contract will be terminated, Reuters and other foreign media reported. President Putin’s announcement today is a direct overturn of the previous day’s assurances that Germany and Italy could continue to pay gas payments in euros.
“To buy Russian natural gas, you need to open an account in rubles at a Russian bank,” Putin said in a speech on state television. Starting tomorrow, gas will be delivered only when payment is made through a Russian account. Nothing is free in the world and we will not do any charity work. Therefore (in case of non-payment of the ruble payment), the current contract will be terminated.”
Russia accounts for about a third of Europe’s natural gas market, and energy is being used as the most important leverage for Putin to counter economic sanctions in Europe and the West. Russia has been demanding that gas be paid in rubles after the economic sanctions from the West, but European countries have rejected this request as it is a violation of the current contract, which is stipulated in euros or dollars. Immediately after Putin’s announcement of the decree on the same day, Germany and France reaffirmed that they still do not intend to trade gas prices in rubles.
Germany’s economy minister, Robert Havek, said at a press conference that Germany had rejected Putin’s proposal, saying Germany was ready for all scenarios, including a cut in gas supply to Russia. France’s finance minister, Bruno Le Marie, also stressed that France and Germany were rejecting Russia’s demand for payment in rubles.
Reporter Im Bo-mi bom@donga.com
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