Latest post

Germany: G7 rejects Russia’s request to pay for ruble gas

Berlin (AP) — A group of seven major economies agreed on Monday to reject Moscow’s request to pay for Russia’s natural gas exports in the ruble...

German energy minister Robert Habeck told reporters about the natural gas used in the heating, electricity and electricity industries of homes, “this is (this) a one-sided and clear breach of existing contracts entirely. I agreed. ” ..

Energy Ministers from France, Germany, Italy, Japan, the United States, the United Kingdom and Canada, and the Energy Commissioner of the European Union met at a video conference to reaffirm that the contract “must be respected”. Euro or dollar, G-7 statement said.

“Payments in the ruble are unacceptable. We urge affected companies not to comply with Putin’s request,” Habeck said.

President Putin announced last week that Russia would require “unfriendly” countries to pay for natural gas only in Russian currency, instructing the central bank to develop procedures for acquiring rubles in Russia. In concern, it could signal a cutoff of natural gas, which could disrupt the European economy and hurt Russia’s finances.

Economists said the move seems to be designed to help the ruble.Has collapsed against other currencies since Putin invaded Ukraine On February 24, Western nations imposed widespread sanctions on Moscow, but some analysts questioned whether it would work.

Dmitry Peskov, a Kremlin spokesman, asked reporters on Monday whether Russia could cut its natural gas supply to European customers if it refused to pay in the ruble.

“In our situation, doing philanthropy for Europe is almost impossible and not feasible,” Peskov said.

When asked what would happen if Russia now shuts down water, Germany’s energy minister said, “We are prepared for all scenarios.”

“Putin’s request to convert the contract into a ruble (that is, he stands with his back to the wall at that point), otherwise he would not have made that request,” Habeck said, Russia. Added that he needed a ruble to fund the war in the country. , Payment to the army, etc.

The European government has avoided banning energy imports from Russia, fearing its impact on the economy.Europe has acquired 40% of gas and 25% of oil from Russia and has proposed to reduce its dependence since the war... Russia is similarly dependent on Europe, with oil and gas the dominant sector, paying the government.

Estimates of the impact of gas boycotts or embargoes on Europe vary, but in most cases significant losses in economic production, especially as the war and the associated soaring energy and raw material prices already weigh heavily on the European economy. Accompanied by. US sanctions allow payment exceptions. Regarding oil and gas, Russia’s energy imports themselves are banned.

Putin’s ruble payment proposal has led the German utility association BDEW to call on the government to declare an “early warning” of an energy emergency.

A spokeswoman said Monday that the government is not aware of the need for an early warning declaration at this time.

German Chancellor Olaf Scholz said when pressed by reporters, “The contracts we know set the euro as the payment currency, and companies pay according to the signed contract.” ..

Robin Brooks, chief economist at the Institute of International Finance, the world’s banking industry group, said it “doesn’t really matter” which currency is used to buy Russia’s energy.

“The important thing is that energy exports give Russia purchasing power and convert it into commodities from abroad,” she said.

Putin’s request for payment in the ruble “is mostly window dressing. The basic deal remains the same,” Brooks said. It is due to Western Europe and may increase the likelihood of import suspension. “


APEconomics writer Paul Wiseman contributed from Washington.


About the author


Leave a Comment