Brussels (AP) — President Vladimir Putin’s threat to pay Russia’s natural gas exports only in rubles to “unfriendly” countries was treated less friendly by European Union countries on Thursday.
“I don’t think anyone in Europe really knows what the ruble looks like,” said Slovenian Prime Minister Janez Jansa. “No one pays in rubles.”
If others didn’t say it frankly, it would be the same — Italian Chancellor Mario Draghi, who knows something about the currency as the former Prime Minister of the European Central Bank from German Chancellor Olaf Scholz. Until.
Earlier this week, President Putin announced the idea that Western sanctions targeting the Kremlin and the freezing of Russian assets would “virtually delineate the credibility of the currency and undermine it.”
Therefore, Putin wants the Russian ruble for Russian gas instead of the euro and the dollar.
Economists say the move aims to help the ruble collapsed against other currencies since Russia invaded Ukraine on February 24 and Western countries imposed widespread sanctions on Moscow. He said it seems to be.
However, making such a request would basically change contracts and invalidate them, some European leaders said on the first day of their EU summit.
“What we have learned so far is summarized in the fact that the currency in which payments are made is also ubiquitous in fixed-price contracts that are part of the contract. These are the starting points we need to tackle.”
Draghi simply said that if Putin pushed the plan forward, “it would be considered a breach of the existing contract.”
And given the soaring gas prices, Belgian Prime Minister Alexander de Crew even saw the possibility of a proposal, though not the kind Moscow intended.
“In any case, if one element of the contract changes, we can talk about any issues, including pricing,” DeCroo said.
Russia’s threat is strong, as the EU imports 90% of the natural gas used in the electricity generation, home heating and supply industries, and Russia supplies almost 40% of the block’s gas.
Putin will use any financial lift he can find, as the ruble is having problems due to severe sanctions. He instructed the country’s central bank to put in place procedures for natural gas buyers to acquire rubles in Russia.
However, some analysts have expressed doubts about whether it works.
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