Gas paid in rubles: Germany fears cuts and activates the first level of the emergency plan

Following the tensions on the gas supply, today the Federal Minister of Economy Robert Habeck (Verdi) declared active the first level of alert, the “Early”, of the gas emergency plan. This is a precautionary level and security of supply continues to be ensured. According to the contingency plan , there are three levels of crisis. In the event of an emergency, households would still be protected.

“There are currently no supply bottlenecks,” explained Habeck. "However, we need to step up the precautionary measures to be prepared for an escalation by Russia." With the proclamation of the early warning level, the specific crisis unit had met. “The crisis team analyzes and assesses the supply situation so that, if necessary, further measures can be taken to increase security of supply. The federal government is doing everything possible to continue to guarantee security of supply in Germany ”.

The overall supply of all German gas consumers is currently still guaranteed, according to the ministry. “However, from now on, every gas consumer – from the economy to private households – is also required to reduce their consumption as much as possible”.

According to the ministry, the level of early warning materializes in the fact that a crisis unit meets at the Ministry of Economic Affairs, which includes authorities and energy suppliers. In addition, gas suppliers and pipeline operators are required to regularly assess the situation for the federal government.

The state has not yet intervened. Gas traders and suppliers, transmission and distribution system operators are taking "market-based" measures to maintain gas supply: according to the ministry, these include the use of flexibility on the procurement side, the use of of gas storage facilities and the optimization of flows.

Recall that Russia remains uncompromising in its demand for payment of Russian gas supplies to Western Europe in rubles. By Thursday (March 31), by order of President Vladimir Putin, the payment arrangements will be worked out so that the system is "simple, understandable, transparent and actionable" for European and international gas buyers, the spokesman for the gas said on Tuesday. Kremlin Dmitry Peskov, according to the Interfax agency. " Nobody will provide gas for free and it can only be paid in rubles ," he stressed once again.

Putin announced last week that Russia would only supply gas to Germany and other "hostile states" for rubles. This would support the Russian currency under pressure. However, the G7 group of economic powers, including Germany, as well as the European Union as a whole, refuses payments in rubles for gas.

Habeck reiterated Wednesday that if Russia accepts payment for gas imports in rubles only, it would be a violation of private supply contracts. This is why the ministry has prepared the activation of the early warning plan. In this way the current situation of the gas network is carefully monitored and evaluated. According to the contingency plan, there are three levels of crisis. The early warning level means that there is "solid, serious and reliable evidence" that an event may occur that could lead to a significant deterioration in the gas supply situation – and likely to trigger the alarm and therefore the level of emergency. . In the event of a "significant interruption" of the gas supply, the maximum state of emergency would be activated. The state should intervene to ensure in particular the gas supply of "protected customers" – these are, for example, private homes, but also hospitals, firefighters and police. All industrial or non-strictly necessary supplies would be cut off, with enormous economic repercussions that we can easily imagine.

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This is a machine translation of a post published on Scenari Economici at the URL on Wed, 30 Mar 2022 12:13:43 +0000.