EU caves to Putin's demand that Gazprom supplies must be paid for in rubles


Moscow stopped supplying Bulgaria and Poland for not paying in Russian currency on Tuesday, April 26, prompting panic across the bloc. Gazprom, Russia’s gas export monopoly, suspended gas supplies “due to absence of payments in rubles”, as President Putin scrambled to soften the impact of devastating sanctions from the West following his invasion of Ukraine.

After the president of the European Commission said Gazprom’s move was “yet another attempt by Russia to use gas as an instrument of blackmail”, EU member state ambassadors asked the executive for clearer guidance on whether sending euros breached sanctions.

Kremlin spokesperson Dmitry Peskov said Russia remained a reliable energy supplier and denied it was engaging in blackmail.

With so many EU members reliant on Russian energy, the European Commission has said the EU’s gas buyers can engage with Russia’s payment scheme provided certain conditions are met.

Germany’s main importer, Uniper, said it could pay without violations.

Austria and Hungary, among others, have also indicated they will take this route.

The EU scheme allows member states to send euros to Russia’s third-largest bank which then takes the funds to deposit rubles into Gazprom’s accounts.

Ex-Soviet satellites Bulgaria and Poland, who are now members of the EU and NATO, are the only two European countries with Gazprom contracts due to expire at the end of 2022, which meant their search for alternatives was under way.

Warsaw has been one of the Kremlin’s most vocal opponents over the war.

READ MORE: 20 Russian warships and submarines amassing in the Black Sea

Germany, the biggest buyer of Russian energy, hopes to stop importing Russian oil within days, but weaning itself off Russian gas is a far bigger challenge.

Economy Minister Robert Habeck said a Russian energy embargo or blockade would tip Germany, Europe’s largest economy, into recession.

A Russian economy ministry document indicated that Russia’s economy could shrink by as much as 12.4 percent this year.


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