“Germany continues to pay in euros” – the federal government wants to examine Putin’s decree on gas payments
“In any case, companies can and will pay in euros”
In a first reaction to Putin’s demand for gas payments in rubles, Chancellor Olaf Scholz stated that the supply contracts state that payments will be made in euros. He told Putin that this will remain the case.
With the announcement that gas payments would only be accepted in rubles, Kremlin chief Vladimir Putin sparked concern in the West. A new regulation will come into effect this Friday. The German government wants to examine the decree thoroughly – “if it is available”.
DThe federal government wants to examine the latest demands by the Russian government for future payment of gas deliveries. “When we have the decree, the federal government will examine and evaluate it thoroughly,” said a spokeswoman for the Ministry of Economic Affairs and Climate Protection in Berlin on Thursday of the German Press Agency. “It is clear that Germany will continue to pay in euros. We will not change anything about that, the G7 decision applies.” The G7 group of leading economic powers and the European Union had already rejected calls for payment in rubles earlier in the week.
On Thursday afternoon, Russian President Vladimir Puti ordered western countries to open accounts with Gazprombank to continue receiving Russian gas, effective April 1. Otherwise, deliveries to the “unfriendly” countries would be halted, he said on Russian state television. According to a decree signed by Putin, payments can still be made in euros or dollars to the Russian account. Gazprombank converts the money into rubles and transfers the amount in Russian currency to Gazprom. In the absence of payments, deliveries would be stopped, Putin said. “We’re not involved in charity.”
Putin justified his ruble initiative with the fact that “in violation of the norms of international law, the foreign exchange reserves of the Bank of Russia were frozen by the member states of the European Union”. This was the EU’s reaction to Russia’s war against Ukraine. Putin had said that payments in euros and dollars were now of no value to the country.
Kremlin spokesman Dmitry Peskov had previously confirmed that Germany could probably continue to pay for gas supplies in euros as before. A payment system is being worked on, according to which the money will be paid in euros to Gazprombank, which is not affected by sanctions, then exchanged and transferred to Russia in rubles, Peskov said on Thursday afternoon, according to the Interfax agency. According to Italy’s Prime Minister Mario Draghi, in addition to Germany, all other countries in Europe can continue to pay for Russian gas in euros or dollars.
Scholz is relaxed
Chancellor Olaf Scholz (SPD) also emphasized again on Thursday that gas deliveries from Russia should be paid for in euros. “In any case, companies want, can and will pay in euros,” he said. We will now look closely at what Russian President Vladimir Putin is presenting.
A week ago, Putin announced that in future he would only sell Russian gas to “unfriendly” states for rubles. At the time, the head of the Kremlin instructed Gazprom and the central bank to work out appropriate modalities for switching payments from euros and dollars to rubles. Moscow justified its actions with an alleged “economic war” by the West.
Putin justified his ruble initiative with the fact that “in violation of the norms of international law, the foreign exchange reserves of the Bank of Russia were frozen by the member states of the European Union”. This was the EU’s reaction to Russia’s war against Ukraine. Putin had said that payments in euros and dollars were now of no value to the country.