Obligation to pay for gas in rubles? All the latest news from Putin
Putin said that, as of April 1, European countries will have to pay for Russian gas in rubles, otherwise supplies will be suspended. But in truth the mechanism will be the one explained by Draghi at the press conference. The point of the situation
Russian President Vladimir Putin announced today that, from 1 April, EU countries will need to open a ruble account with Russian banks if they want to continue to supply natural gas. Flows to buyers who fail to comply will be suspended.
HOW MUCH GAS MATTERS FOR EUROPE AND RUSSIA
Gas is as fundamental for the energy needs of the European Union – which purchases almost 40 per cent of the total it imports from Russia, on average – as it is for Russia's economic sustenance: every day European countries import hydrocarbons from Moscow to 1 billion euros, effectively financing the Kremlin war in Ukraine. Two of the members of the Union most linked to Russia for energy are Germany and Italy.
THE BACKGROUND
Last week Putin said that countries "hostile" to Russia – that is, those that have applied sanctions to the country after the invasion of Ukraine – could only pay for natural gas in rubles, despite the contracts being based on the euro. and on the dollar.
Yesterday, however, the spokesman of the Kremlin, Dmitry Peskov, had specified that the payment mechanism in Russian currency would take some time to be implemented, suggesting that banks have exceeded the March 31 deadline given by the president to comply with the directive.
THE WORDS OF THE KREMLIN
According to what was reported by the official Russian news agency TASS , taken up by ANSA , Putin said that “nobody sells us anything for free, and we will not even do charitable works. This means that existing contracts, in the event of non-payment of gas in rubles, will be terminated ”.
"The United States tries to solve its own problems at the expense of others," he added. Their errors in the economic field try to unload them on us. They are trying to push Europe to buy American gas, which is more expensive ”. In reality, it is not certain that the United States will be able to supply large volumes of liquefied gas to Europe, nor that the latter will be able to receive them given the shortage of plants . Furthermore, the White House cannot order private American companies to sell gas in one market rather than another.
After signing the decree on gas trade to hostile countries, Putin also stated that "illegitimate sanctions have been introduced for many years to weaken the productive and financial potential of our country, they are sanctions prepared previously and that would have been introduced. in any case, they are sanctions that undermine our freedom ”. The sanctions were introduced in 2014 in response to the Russian annexation of Crimea (formally Ukrainian territory) and then the large-scale invasion of the country, which began more than a month ago.
THE EXEMPTIONS
The TASS reports that the presidential decree provides for the possibility that some payments will not be made in Russian currency. Individual exemption cases will be established by the government commission that oversees foreign investment. At Putin's request, the authorization procedure for such permits will be approved within ten days.
THE EXPLANATION OF DRAGONS
In essence, the mechanism will be the one explained by the Prime Minister, Mario Draghi, at a press conference: countries will be able to pay for gas in dollars or euros, and then the Gazprom bank will convert non-Russian currencies into Russian rubles.
European companies will continue to pay in euros or dollars, Putin remarked several times that this is a concession to European companies, Draghi stressed.
( HERE THE WORDS OF DRAGHI IN THE PRESS CONFERENCE )
WHAT FRANCE AND GERMANY DO
French Economy Minister Bruno Le Maire, during a press conference with his German counterpart Robert Habeck, said that France and Germany are "preparing" for the possibility of Russia cutting off gas supplies.
WHAT ITALY AND GERMANY SAY
Only yesterday Italy and Germany claimed that Putin had told them that European countries could continue to pay for Russian gas in euros, and that the Russian state-owned bank Gazprombank would deal with the conversion of foreign currency into rubles.
HOW MUCH GAS THE PRICE GOES UP
In Amsterdam, where the hub of the European gas market is located, gas prices have risen to € 123 per megawatt hour (+1.5 per cent).
(article updated at 4.30 pm)
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/putin-gas-russo-rubli-1-aprile/ on Thu, 31 Mar 2022 14:33:23 +0000.