Europe faces Russian demands to pay for natural gas in rubles. Prices are soaring, and some fear an interruption in supplies of the fuel used to heat homes and generate electricity. Here's what you need to know about the standoff.
The Kremlin offered what could be seen as a loophole. Importers would simply have to establish an account in dollars or euros at a designated bank, then a second account in rubles. The importer would pay the gas bill in euros or dollars and direct the bank to exchange the money for rubles.
German officials wouldn’t discuss the impact of Putin’s decree other than to say they were examining it. Economy Ministry spokeswoman Beate Baron noted that Russia’s Gazprombank has been given 10 days to explain the procedure, “and of course we will in turn look carefully at that.” “Russia is not interested in stopping gas, but it wants a kind of political victory,” Meister said. “It wants to show that Putin dictates the conditions under which it exports gas.”
Another motive could be to protect the designated bank, Gazprombank, from being hit by sanctions because it would be the conduit for the payments that keep gas flowing, Meister said. It is the third-largest bank in Russia, and like Sberbank, the largest, it has not been cut off from the international SWIFT payment system.Coordinated U.S. and European Union sanctions exempt payments for oil and gas.
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