Russian President Vladimir Putin’s decree imposing a new payments system for gas supplies has placed the European Union and Russia at loggerheads, with Moscow demanding that EU companies open accounts in rubles.
Putin said that if payments aren’t made in rubles, then gas exports would be halted. Europe depends heavily on Russian gas to heat homes and power industry.When he announced his move, Putin said it was to protect Russia’s vital gas revenues from possible EU sanctions or seizure, as some member states had been proposing. By giving Gazprombank a central role in the payment mechanism, the Kremlin also could ensure the bank was protected from further sanctions.
German utility Uniper SE, a big buyer of Russian gas, has said it believes it can keep up purchases without breaching sanctions. And in Italy, another major client, Eni SpA is preparing to open ruble accounts at Gazprombank as a precautionary measure. Ursula von der Leyen, president of the European Commission, the EU’s executive arm, said on Apr 27 that"the request from the Russian side to pay in rubles is a unilateral decision and not according to the contracts".
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