Gas in rubles: a sword in the water by Vladimir Putin

“I made the decision to implement a number of measures to switch our gas supplied to enemy countries to payment in rubles,” Vladimir Putin announced on March 23, to everyone’s surprise. But the will of the autocrat was immediately rejected by the European leadership. On March 28, G7 energy ministers rejected his request and “reaffirmed that the contracts signed for the supply of gas must be respected, provided that most of them expressly provide for payment in euros or dollars”.

Not enough to discourage Vladimir Putin, who decided to translate his political statement into a presidential decree three days after this G7 meeting, endorsing a new payments system with the intervention of the Central Bank of Russia. The maneuver only convinced Viktor Orban’s Hungary, Vladimir Putin’s last EU ally, to accept payment in rubles and provoked some ambiguous statements from the Slovak government. But apart from these two individual cases, European unification held its ground and forced the Russian government to postpone the deadline for its ultimatum to early May.

exit doors. It must be said that the presidential decree of March 31st, probably intentionally, is quite opaque in its implications, as the European Commission has not failed to do in its “guidelines” published on April 26th. If the new procedure recommended by the Kremlin is incompatible with European sanctions because it is “entirely in the hands of the Russian authorities”, the decree seems to offer European companies one or even two exit doors.

According to the Commission, these could be content to open an account with Gazprombank, pay the amounts due there in euros or dollars and let that bank do the conversion. European importers might even continue to pay their contractors directly in euros or dollars, with the latter being responsible for converting the amounts collected. These guidelines, unveiled by Reuters agency and then analyzed in a Bloomberg report, drew no reaction from the Russian side.

“Most upset about this story is Gazprom, which will probably have to stop building reserves in euros and dollars and pay all its employees in rubles.”

The ultimatum issued by Vladimir Putin appears to have had no other aim than to sow discord among the Twenty-Seven without relying on any serious threat to achieve it. “Some may have believed that paying in rubles should increase the price, but the effect would be exactly the same if Russian companies were forced to convert the collected amounts into rubles,” confirms Thierry Bros, a professor at Sciences Po and a specialist in geopolitics of energy. Most of all, this story bothers Gazprom, which will probably have to stop building reserves in euros and dollars and pay all its employees in rubles. »

The refusal of the Europeans to honor the payment in rubles would also be a very bad excuse to stop gas supplies to the EU. “Insofar as the contracts are concluded in dollars and euros, stopping their execution due to the refusal of Europeans to pay for them in rubles would certainly not put Gazprom in a good position with regard to the international arbitration that would certainly follow him expensively come to a stop,” concludes Thierry Bros.

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