The EU and Russia disagree on paying for gas in rubles. Neither side seems willing to be flexible, and Putin’s back threat is threatening tomorrow, Thursday.
The EU and Russia are deadlocked over Russian gas payment methods.
President of Russia Vladimir Putin ruled last week that all gas sold by Gazprom should be paid in rubles.
Putin gave the government, central bank and gas supplier Gazprom time until Thursday to prepare the necessary documents for the changeover to the ruble. More than half of Russia’s long-term gas contracts are paid in euros.
The European Union is trying to break out of Russian gas and reduce its dependence on it by two-thirds this year. In this way, EU energy companies will also be in breach of their agreements if they buy less gas from Gazprom than agreed.
Is the situation escalating so that gas supplies may be cut off as early as Thursday?
At least Germany seems to be preparing for that. It said on Wednesday it would launch an emergency program to prepare for the closure of gas taps. An emergency program could lead to gas regulation in the country.
The threat is exacerbated
Minister of Economic Affairs Robert Habeck launched an “early warning phase” on Wednesday under the Gas Emergency Act. The law is enacted to deal with a sudden shortage of energy. A crisis group will also be set up within the German Ministry of Finance to monitor the situation on the gas market.
The federal government is concerned that Russia may cut off supplies to both Germany and its neighbors.
In addition to such an early warning phase, the German Emergency Act has two other phases: first an alert phase and finally an emergency phase. The federal government would only have to intervene in the market and regulate consumption in the final emergency phase.
– The situation should worsen dramatically before we are in these stages. Then we would practically need a change in the supply lines, and we should react accordingly, Habeck said.
Consumption must be reduced
From now on, every German gas consumer, from companies to households, will have to reduce their consumption as much as possible, according to the Minister for Economic Affairs.
From now on, gas suppliers and gas pipeline operators are obliged to assess the situation regularly for the federal government. The authorities intend to consult with both gas importers and large users on how to prioritize the different uses of gas.
55% of the gas used by Germany comes from Russia.
You can discuss the topic until 11pm on Thursday.