Pay In Roubles Or We’ll Shut Off Your Gas, Putin Tells Europe

BERLIN/LONDON — Russian President Vladimir Putin is demanding that international buyers pay for Russian gas in roubles starting Friday or face having their supply shut off, a demand that European countries have slammed as “blackmail” by Germany.

Europe could lose more than a third of its gas supply as a result of Putin’s directive on Thursday. Germany, Europe’s largest economy, has already launched an emergency plan that might lead to rationing.

 

As he tries to respond against sweeping Western sanctions imposed on Russian banks, corporations, businessmen, and Kremlin connections in reaction to Russia’s invasion of Ukraine, energy exports are Putin’s most potent tool. Moscow refers to its intervention in Ukraine as a “special military operation.”

 

Putin said buyers of Russian gas “must open rouble accounts in Russian banks. It is from these accounts that payments will be made for gas delivered starting from tomorrow,” or April 1.

 

“If such payments are not made, we will consider this a default on the part of buyers, with all the ensuing consequences. Nobody sells us anything for free, and we are not going to do charity either – that is, existing contracts will be stopped,”  he stated on national television.

It was unclear if, in practice, foreign firms could continue to pay without using roubles, which the European Union and Group of Seven have ruled out.

 

Italy said it was in contact with its European partners to give Russia a firm answer, and that its own gas supplies would allow economic activity to continue even if disruptions occurred.

 

Meanwhile, German energy companies said they were in close negotiations with Berlin about how to respond to potential supply interruptions and develop a plan for what to do if Russia stopped exporting gas.

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