Putin asks Europe to pay rubles in return for Russian gas

Last updated on March 25th, 2022 at 04:20 am

Russia will force Europe to pay for gas supplies in rubles, President Putin said Wednesday in a televised address.

“I have decided to go forth with a set of measures to transfer payments for our supplies of gas to unfriendly countries into Russian rubles,” he said. Putin ordered the changes to be stamped within a week.

Moscow deems all countries that have slapped it with sanctions following its intrusion of Ukraine as “unfriendly.”

It is pertinent to state that the measures are part of Putin’s response to the West’s unprecedented sanctions.

According to facts and figures, Europe imports around 40% of its gas from Russia, with contracts priced in euros. Moscow’s gas exports to “unfriendly” countries crossed the $50 billion mark in 2021.

“It doesn’t make sense to lend our goods to the EU or US. and get paid in dollars or euros,” Putin said.

However, the move was met with pushback from some of Russia’s key gas customers, including Austria, Germany, and Italy.

Berlin said Moscow’s demands constitute a breach of the agreement, while Vienna and Rome said they would pay for Russian gas in euros.

“The announcement of asking to get paid in rubles is an absolute breach of the contract. We will ponder with our European partners on how we would react to that,” German Economy Minister Robert Habeck said. Habeck’s country imported 55% of its natural gas from Putin’s Russia before Moscow invaded Ukraine.

Analysts see Russia’s measures as an attempt to pressure Europe over its sanctions. It is clear that Putin wants to turn the tables on the EU.

The West has frozen almost half of Moscow’s international reserves — a whopping $300 billion that Russia had deemed as its anti-sanctions insurance policy.

If Putin’s orders are implemented, the EU nations would have to pay hundreds of millions of euros for rubles every day to pay for its gas deliveries.