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Putin balks over rubles-for-gas threat – POLITICO

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Vladimir Putin blinked.

The Russian president insisted final week that “unfriendly countries” should pay for Russian gasoline in rubles. He reiterated that demand on Thursday, however there’s a enormous loophole — the measure will not apply to Russia’s European gasoline prospects, though they’re included within the so-called “unfriendly country” grouping that has punished Russia for its invasion of Ukraine.

The Kremlin’s speak about gasoline contracts was very fierce on Thursday.

“In order to purchase Russian natural gas, [buyers] must open ruble accounts in Russian banks. It is from these accounts that payments will be made for gas delivered starting tomorrow,” Putin stated in a televised deal with after signing a decree on gasoline gross sales to unfriendly nations.

Anyone who would not pay on this method will not get gasoline, he warned.

“If such payments are not made, we will consider this a default on the part of buyers with all the ensuing consequences,” Putin stated. “No one is selling us anything for free, and we will not do charity work either. That is, the existing contracts will be stopped.”

But European prospects will not be certain by the brand new system, in accordance with the leaders of Germany and Italy.

“Existing contracts remain in force,” Italy’s Prime Minister Mario Draghi stated on Thursday, describing the result of a Wednesday name with Putin.

“European companies — and [Putin] has repeatedly pointed out that this is a concession, a regulation that applies only to European member countries — will continue to pay in euros or dollars,” Draghi stated, including: “The conversion from cost in euros or {dollars} to rubles is an inner matter for the Russian Federation. That’s what I understood.

“The feeling is that it is not at all easy to change the payment currency without changing the contracts,” he stated.

Russia provides about 40 p.c of Europe’s pure gasoline, and the money it earns from these gross sales is essential to the nation’s funds. The ruble menace is seen as a method for Moscow to spice up demand for the ruble and so buttress its worth. It had sagged because of the wide-ranging Western sanctions imposed towards Russia for attacking Ukraine, however in latest days has regained a lot of its worth.

Officials in Berlin indicated they acquired the identical message as Draghi in regards to the European loophole, after Chancellor Olaf Scholz additionally talked with Putin on Wednesday.

According to a German authorities readout, Putin instructed the German chief that gasoline deliveries must be settled in rubles as of April 1, however that “nothing would change for European contract partners.”

Payments would proceed in euros or {dollars} after which Gazprom Bank — the middleman for a lot of Europe’s gasoline funds to Russia — would convert the cash into rubles.

“In any case, corporations need, can and can pay in euros … I additionally made it clear within the dialog with the Russian president that this can stay the case,” Scholz stated on Thursday.

“It is important for us not to give a signal of letting ourselves be blackmailed by Putin. And what they do with the money, as long as the banks are not subject to sanctions, is largely their business,” stated Germany’s Economy and Climate Minister Robert Habeck.

The level was underlined by his French counterpart Bruno Le Maire, who made it clear that European prospects wouldn’t bow to Putin’s demand.

“We do not accept paying gas contracts in a different currency than is foreseen in the contracts,” he stated. “Contracts are contracts, and contracts must be strictly observed.”

America Hernandez, Hans von der Burchard, Zia Weise and Hannah Roberts contributed reporting.

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