Page 14 - FSUOGM Week 15 2022

FSUOGM POLICY FSUOGM

Putin insists on gas-for-rubles as

EU warns of sanction busting

RUSSIA RUSSIA’S President Vladimir Putin continues to two accounts, one in a foreign currency and one
insist on his gas-for-ruble scheme and urged the in rubles, with Gazprom-affiliated and Gaz-
The EU says the move local currency market to prepare for process- prombank responsible for converting the foreign
would violate sanctions. ing oil and gas exports in “national currencies”, currency into rubles and transferring the ruble
which he sees as a “strategic goal”, RBC business payment to Gazprom.
portal and Kommersant daily reported citing Reportedly, the EC concluded that Putin’s
Putin’s April 14 meeting with the representatives decree substantially alters the payment proce-
of the oil and gas industry. dure and creates a new legal situation. As such,
Putin also ordered companies to start prepar- it would hand over total control to the Russian
ing to reroute energy exports from the West to state through its central bank in terms of when
Southern and Eastern markets. the transaction is completed and at what point
In the meantime, the European Union has the buyer is released from the obligation. It
warned the member states that Putin’s gas- would also give Russia control over the applica-
for-rubles scheme would violate sanctions ble exchange rate, which Moscow could manip-
imposed on Moscow following its military ulate to its benefit.
invasion of Ukraine, Bloomberg reported The analysis warned that this new method
citing unnamed sources familiar with the could introduce new costs to the buyer, since the
analysis of Putin’s decree by the European transaction would be completely controlled by
Commission. Russia, sources told Bloomberg.
As covered in detail by bne IntelliNews, aim- The Dutch government is said to have backed
ing to blow a hole in sanctions on the Russian the EU analysis and said it won’t allow its compa-
financial system, on March 23 Putin told Russia’s nies to follow through with the Russian payment
customers in “unfriendly” countries that they demand. Germany also reiterated on April 13
could only pay for their gas imports using the that it was opposed to Russia’s demands. Hun-
Russian national currency. gary has broken ranks with the EU, suggesting it
Putin’s decree, which caused much confu- may be willing to purchase Russian gas in rubles
sion, stipulates that European gas buyers open instead of euros. ™

Hungary says willing to pay for Russian

gas in rubles

HUNGARY HUNGARY has broken ranks with the EU, sug- Hungarian Foreign Minister Peter Szijjarto
gesting it may be willing to purchase Russian gas earlier said EU authorities had “no role” to play
Hungary is breaking in rubles instead of euros, in line with the Krem- in the country’s gas supply deal with Russia,
ranks with the EU. lin’s demand. which was reached between units of Hungary’s
The country relies on Gazprom for around state-owned MVM and Gazprom. And on April
fourth fifths of its natural gas supply, making it 9, government spokesperson Zoltan Kovacs
one of states most dependent on Russian gas in said paying in rubles would not be a violation of
the EU. Furthermore, Hungarian Prime Minis- sanctions.
ter Viktor Orban has traditionally maintained “The EU has no common procurement of gas
warm ties with Moscow, and while supporting and oil for European countries. So as we speak,
the EU’s sanctions regime against Russia, he has we still go alongside those contracts we have with
urged against increasing the restrictions even the Russians regarding gas and oil, and accord-
further. ing to those contracts, it is a technical issue, in
In a news conference on April 7, Orban said what currency we have to pay,” he said in an
Hungary would pay for gas in rubles if Russia interview with CNN.
requested it. This prompted a rebuke from Euro- Demonstrating his lingering close ties with
pean Commissioner Ursula von der Leyen, who Russian counterpart Vladimir Putin, Orban has
said that giving into Moscow’s demand would be even proposed that peace talks be held in Buda-
a violation of sanctions. pest between Russia and Ukraine. ™

P14 www. NEWSBASE .com Week 15 15•April•2022