Europe will not give in to Vladimir Putin’s “blackmail” attempt in demanding Russia be paid in rubles for its gas, said the European Commission head. A requirement of ruble payments would be a breach of contract, European Commission President Ursula von der Leyen said Thursday. On Friday, the US detailed an agreement to boost liquefied natural gas supplies to Europe. Loading Something is loading.
The European Union will not meet Russian President Vladimir Putin’s call for Europe to pay for gas supplies using rubles, leaders in the trading bloc said as they worked to reduce dependence on Russia for energy following its invasion of Ukraine.
Putin on Wednesday said Russia is working on requiring “unfriendly countries” to pay for the gas it produces by using the country’s currency and gave his officials one week to work out how to take those payments in rubles. His remarks were seen as aimed at the EU, the US, and other countries that have imposed sanctions against Russia for launching a war against Ukraine last month.
“This would be a unilateral decision and a clear breach of contract, and it would be an attempt to circumvent the sanctions,” European Commission President Ursula von der Leyen was quoted as saying Thursday by Radio Free Europe/Radio Liberty. She spoke at the EU summit in Brussels.
“We will not allow our sanctions to be circumvented…the time when energy could be used to blackmail us is over,” she added.
Other European leaders also rejected Russia’s demand and came as the US unveiled a deal to boost liquefied natural gas supplies to Europe.
“I don’t think anybody in Europe really know how rubles look like,” said Prime Minister Janez Jansa of Slovenia, according to the Associated Press. “Nobody will pay in rubles.”
“This is basically a breach of contract, this is important to understand,” Italian Prime Minister Mario Draghi – and the former head of the European Central Bank – reportedly said.
The head of the International Energy Agency, Fatih Birol, this week called Putin’s payment demand a “security threat” and said the group’s member countries are committed to cutting their reliance on Russian oil and gas. The IEA recently published a 10-point plan aimed at immediately reducing global oil demand amid a supply shortage potentially made worse by Russia’s war.
Russian gas makes up about 40% of Europe’s total consumption, and sales contracts traditionally were priced in dollars or euros.
Payment in rubles would require European importers of Russia gas to buy hundreds of millions of euros’ worth of rubles each day to pay for gas deliveries, The Moscow Times reported this week. Such a move would bring in hard currency needed by Moscow after sanctions cut it off from billions of dollars in foreign currency reserves.
The ruble spiked against the US dollar after Putin’s remarks Wednesday and was on course Friday to gain about 7% for the week against the greenback. The ruble plunged below a penny after Russia invaded Ukraine on February 24.
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