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Russian President Vladimir Putin has sparked reactions after signing a decree stating that some foreign buyers must pay in rubles for Russian gas from April 1 and warning that contracts will be suspended if this is not followed.
Hydrocarbon exports are Vladimir Putin’s most powerful tool in his bid to strike back at sweeping Western sanctions imposed on the Kremlin, its allies and Russian companies in response to the invasion of Ukraine.
If from this Friday the countries that Russia considers “unfriendly” do not pay in rubles for the gas they buy from this nation, the supply contracts will be suspended, President Putin warned.
The measure, embodied in a decree that will come into force this Friday, April 1, leaves Europe facing the possibility of losing more than a third of its gas supply and further strains the Kremlin’s relations with the West, in the framework of the war with Ukraine.
In televised remarks, Putin said that buyers of Russian gas “must open ruble accounts in Russian banks. It is from these accounts that payments will be made for the gas delivered starting tomorrow.”
The president added that “if such payments are not made, we will consider it a breach by the buyers, with all the consequences that this entails. Nobody sells us anything for free and we are not going to do charity work either, that is, existing contracts They will be arrested.”
“The announcement is clear, harsh, and gives the feeling that in the medium term (in Europe) they are going to face the dilemma of paying in rubles or giving up Russian gas and right now there are many European countries that are not prepared for it” , explained from Moscow the correspondent of France 24 in Spanish, Xavier Colás.
The order signed by Putin creates a mechanism for payments to be made through special accounts in foreign currency and rubles at Gazprombank and foreign money will be converted into rubles through currency auctions on the Moscow stock exchange.
Putin assured that this change in the rules of the game would strengthen Russia’s sovereignty, since Western countries “used” the financial system as a weapon.
“What is really happening? We have supplied European consumers with our resources, in this case gas. They received it, they paid us in euros, which they then froze. In this sense, there is every reason to believe that we delivered part of the supplied gas. to Europe practically for free,” Putin added.
Germany calls Russia’s move “blackmail”
Vladimir Putin’s statements took some European countries by surprise, which already took for granted that they could continue to make their payments in euros or dollars. Like Germany, whose chancellor Olaf Scholz had agreed with his Russian counterpart the night before that the payment method would not change.
“What is Putin intending, we will analyze it, but what is in force for companies is that they can pay in euros and they will do so,” the German leader explained this Thursday at a press conference.
Die Zahlung Russischer #Gaslieferungen findet entsprechend der bestehenden Verträge in Euro und Dollar statt. Das ist so, das wird auch so bleiben, und das habe ich gestern in meinem Gespräch mit Präsident Putin auch deutlich gemacht.
— Bundeskanzler Olaf Scholz (@Bundeskanzler) March 31, 2022
Germany, one of the countries most dependent on Russia for energy, has already activated an emergency plan that could lead to rationing in Europe’s largest economy.
Its economy minister, Robert Habeck, said the Western allies were determined not to be “blackmailed” by Russia, joining other Western companies and governments in immediately expressing their rejection.
With Reuters and AP
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