Energy ministers from European Union countries are holding emergency talks on Monday as the bloc struggles to find a united response to Moscow’s demand that European buyers pay for Russian gas in rubles or risk to have the supply cut off.
Russia cut off gas supplies to Bulgaria and Poland last week after refusing to meet its demand to actually pay in roubles.
These countries have already planned to stop using Russian gas this year and say they can cope with the shutdown, but it has raised concerns that other EU countries, including the dependent European economic powerhouse gas, Germany, are next.
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He also threatened to smash the EU’s united front against Russia amid disagreement over the right course of action.
With many European companies facing gas payment delays later this month, EU states urgently need to clarify whether companies can continue to buy fuel without breaching EU sanctions against Russia for its invasion of Ukraine.
Moscow said buyers of foreign gas should deposit euros or dollars into an account at private Russian bank Gazprombank, which would convert them into rubles.
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The European Commission has told countries that complying with the Russian scheme could breach EU sanctions, while also suggesting that countries could make sanctions-compliant payments if they report the payment in full once it has been made. made in euros and before its conversion into rubles.
After Bulgaria, Denmark, Greece, Poland, Slovakia and others asked for clearer guidance last week, Brussels is drafting additional guidance.
Russia said on Friday it sees no problem with its decree, which considers the buyer’s obligation to be fulfilled only after the hard currency has been converted into rubles.
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While Bulgaria and Poland refused to commit to Moscow’s scheme, Germany echoed the Commission’s workaround to allow businesses to pay, and Hungary said buyers could s engage in the Russian mechanism. Read the full story
Ruble payments can help shield Russia’s economy from the impact of sanctions, while fuel revenues can help fund what she calls a special military operation.
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EU countries have paid more than 45 billion euros ($47.43 billion) to Russia for gas and oil since it invaded Ukraine on February 24, the organization has revealed. Research Energy and Clean Air Research Center.
Russia supplies 40% of the EU’s gas and 26% of its oil imports, a dependency that means Germany and others have so far resisted calls for an abrupt halt to Russian fuel imports by fear of economic damage.
The EU is heading for a ban on Russian oil imports by the end of the year, diplomats have said, after talks between the Commission and EU countries over the weekend ahead of meetings this week.
The ambassadors will discuss at a meeting on Wednesday a sixth EU sanctions package against Moscow being drawn up by the Commission.
Ministers will also discuss on Monday the need to urgently secure non-Russian gas supplies and fill storage, as countries brace for supply shocks.
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Dependence on Russian gas varies from country to country, but analysts have said an immediate total cut off of Russian gas would plunge countries, including Germany, into recession and require emergency measures such as closing factories to deal with it.
Austria, Hungary, Italy and Slovakia also expressed reservations over the weekend over the idea of an oil embargo, diplomats said.
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The Commission will unveil plans later this month to end Europe’s reliance on Russian fossil fuels by 2027, including developing renewables and retrofitting buildings to consume less.
($1 = 0.9488 euros)
(Editing by John Chalmers and Barbara Lewis)