Germany and France Respond to Gas-for-Rubles Russian Demand

Bruno Le Maire, French Finance Minister, alongside Robert Habeck, German Economy Minister, announced on Thursday that their countries would not buy Russian gas in rubles. They requested for observation of the gas contract in euro.

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During a press conference in Berlin, the German minister said that the EU would not be "blackmailed" by Russia into using rubles to buy gas, in light of the earlier announcement made by the Russian President, Vladimir Putin,  which indicated that the EU's common currency would be converted to rubles upon arrival in Russia.  

The Russian President said that by Friday, those countries that have imposed sanctions on the Russian central bank as a response to the special military operation launched in Ukraine last February (unfriendly countries) would have to pay in rubles in exchange for Russian gas; otherwise, their correspondent supply will be cut off.

Habeck called for observation of gas contracts between European countries and Russia, as they were negotiated in euro. In a statement from the Group of Seven major economies, He said: "We will under no circumstances accept paying for gas deliveries in a currency other than the contractually agreed currency."

The Russian President, German Chancellor, and French President held a phone conversation on Wednesday. The Russian leader proposed a system whereby both countries would continue to pay in euros, which would be converted to rubles by Russia's Gazprombank. According to a German official, the German Chancellor "Olaf Scholz did not agree to this procedure in the conversation, but asked for written information to better understand the procedure," The French side said, "France is against paying in rubles."

It is unknown if the persistence from Habeck and Le Maire on the accomplishment of the original contracts in euros represents a complete rejection of the euros-to-rubles deal proposed by Putin on Wednesday. German Economy Minister said that the country is prepared to face a potential cutting off the flow of Russian gas if there is no deal reached.

Moscow announced that it would cut off the gas supply to those European countries which refused to pay in rubles. On Thursday, Kommersant, a Russian newspaper, reported that energy Gazprom company is "considering the possibility of a complete halt in gas supplies … and is assessing the consequences of such a step."