Russian demand: G7 countries reject gas payments in rubles

The G7 countries have rejected Russian demands for gas bills to be paid in rubles. According to Economics Minister Habeck, the G7 energy ministers agree that this requirement represents a breach of the existing agreements.

The countries of the G7 group are not willing to pay Russian gas bills in rubles. This was confirmed by Federal Economics and Climate Protection Minister Robert Habeck after a virtual meeting with the G7 energy ministers.

The G7 ministers agreed that the Russian demands for payment in rubles were “a unilateral and clear breach of the existing treaties,” said Habeck. Concluded contracts are valid, affected companies have to be faithful to the contract. “So that means that payment in rubles is not acceptable.”

Germany currently chairs the group of states, which includes Germany, France, Italy, Japan, Canada, the USA and Great Britain. The EU also took part in the round, said Habeck.

Putin only wants payments in rubles

Russian President Vladimir Putin announced last week that gas deliveries to “unfriendly countries” would only be billed in rubles. This would support the troubled Russian currency as importing countries would have to procure roubles. The Russian central bank should introduce a new system “within a week”, said Putin. The affected countries include Germany and all other EU countries. So far, gas deliveries have been paid for in Germany, for example, in euros.

“Putin’s attempt to divide us is obvious,” said Habeck. But there is great unity. “We won’t let ourselves be divided, and the answer of the G7 countries is clear: the agreements will be observed.”

“Are prepared for all scenarios”

When asked about preparations in the event that Russia cuts off gas supplies, Habeck said: “We are prepared for all scenarios.” The federal government has been working on answers to scenarios since the turn of the year. Putin’s demand for a payment in rubles should be interpreted in such a way that he “is standing with his back to the wall, otherwise he would not have made this demand,” said Habeck.

Payments from the West for energy supplies are not decisive for the direct financing of the Russian war against Ukraine. Financing the army, supplying soldiers, supplying fuel for tanks or building weapons of war, Putin can largely do in his own country. “He needs rubles for that. He can print the rubles,” said Habeck. “As long as the Russian workers accept the ruble as a means of payment, he can finance the war from his own resources.”

However, the exchange of rubles in foreign currencies is extremely difficult due to sanctions against the central bank, said Habeck. Nevertheless, one must become independent of gas, coal and oil from Russia in order not to strengthen the Russian government or keep it alive. Russia is “an unreliable supplier” and its campaign has “significantly contributed to a global disruption of peace and order”.

Russia threatens to stop deliveries

So far, despite its war of aggression against Ukraine and Western sanctions, Russia has continued to supply gas to Europe unabated. Meanwhile, Moscow apparently wants to replace declining oil supplies to European countries with exports to Asia. There is also a market “in Southeast Asia, in the east,” said Kremlin spokesman Dmitry Peskov before Habeck’s announcement, according to the Interfax agency.

The world market is more diverse than just the European market. “Although, of course, the European market is premium,” admitted Russian President Vladimir Putin’s spokesman. Peskov underscored Russia’s demand that natural gas deliveries to European countries should in future be paid for in rubles. It is clear that if Russia refuses, it will not supply gas to Europe “for free”. In the current situation in Russia, that is “hardly possible or sensible.”

With his threat, Peskow reacted to Chancellor Olaf Scholz’s (SPD) announcement that Germany’s dependence on Russian energy imports would be eliminated “quite quickly.” In the ARD broadcast Anne Will Scholz said on Sunday that Germany could do it quickly with coal and oil.