BERLIN, March 31 (Reuters) – German Economy Minister Robert Habeck on Thursday rejected demands by Russia that European countries pay for its gas in roubles as an unacceptable breach of contract, adding that the manoeuvre amounted to “blackmail”.
Speaking during a joint news conference with his French counterpart, Habeck said he had not yet seen a new decree signed by President Vladimir Putin mandating gas payments in roubles.
“With regard to the threat, demand or consideration – one doesn’t know what to call it anymore – to be made to pay in roubles, it is crucial for us that the contracts are respected,” said Habeck. “It is important for us not to give a signal that we will be blackmailed by Putin.”
Separately, Chancellor Olaf Scholz said German companies would continue to pay for Russian gas using euros as stipulated in contracts.
“By all means, it remains the case that companies want, can and will pay in euros,” he told a joint news conference with his Austrian counterpart Karl Nehammer.
EMERGENCY PROCEDURE
Germany on Wednesday triggered an emergency procedure to monitor gas imports and storage capacity and urged consumers and manufacturers to reduce consumption in preparation for any Russian delivery stoppage.
The network regulator said on Thursday the situation was stable and that storage had risen slightly.
Habeck said he and French Finance and Economy Minister Bruno Le Maire discussed possible new punitive measures on Russia, declining to go into details.
“The last sanctions package must not and should not be the last. We spoke about what additional sanctions can prevent Putin from continuing the war in Ukraine,” Habeck said.
Scholz also raised the possibility of new sanctions on Russia over its invasion of Ukraine, adding that Germany was prepared for all scenarios, including a stoppage of Russian gas flows to Europe.
Scholz reiterated that Germany hoped to become independent of Russian oil and coal imports this year, but it would take longer to reduce its dependence on Russian gas.
UK is not looking to pay for Russian gas in roubles -PM’s spokesman
Britain does not plan to pay for Russian gas in roubles, Prime Minister Boris Johnson’s spokesman said on Thursday, adding that the government was monitoring the implications for the European market of President Vladimir Putin’s demand.
Putin said he had signed a decree saying foreign buyers must pay in roubles for Russian gas from April 1, and contracts would be halted if these payments were not made.
Asked if there were any circumstances in which Britain would pay in roubles for Russian gas, the spokesman told reporters: “That is not something we will be looking to do.”
Other Reactions
DUTCH GAS TRADING CORPORATION GASTERRA
“International agreements contain clauses about payments and currency. Sticking to the agreement remains our position.”
DUTCH ENERGY COMPANY ENECO
After Putin’s announcement, a spokesperson said there was no change to the following statement, which it made the previous day:
“Eneco has a long-term contract with Wingas, a German subsidiary of Gazprom, for delivery until 2030. Eneco expects its current contract with Wingas in euros to be honoured.”
POLISH GAS COMPANY PGNiG
“PGNiG doesn’t provide detailed comments on contractual clauses. The company remains in current contact with Gazprom,” the company press office said.
ANALYSTS AT FITCH SOLUTIONS
“Potentially, the Kremlin is acting from a fear that Gazprombank will soon be sanctioned too, amid a wider bid by the European Union to cut energy ties with Russia completely.”
“The long-term contracts for natural gas purchases from Russia are denominated in EUR (euros) and therefore, without contract renegotiation, there is no legal basis for Russia to enforce this demand.”
“Russia would have to physically halt gas flows to EU 27 (European Union member states) to force the issue, marking a major escalation not even performed at the height of the Cold War. It would mark another major financial blow to Russia’s coffers.”
