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international news

GERMANY GIRDS FOR GAS RATIONING,

EUROPE ON EDGE IN RUSSIAN STANDOFF

FREDERIC LEGRAND - COMEO / SHUTTERSTOCK.COM

RUSSIAN PRESIDENT VLADIMIR PUTIN

GERMANY HAS TRIGGERED an euros and dollars. a prospect that has driven commodity
emergency plan to manage gas supplies The EU has no easy substitutes if prices higher.
under which Europe’s largest economy supplies are disrupted, but at the same It would also blunt the impact of
could ration power if a standoff over time, Russia is making €400 million Western curbs on Moscow’s access
a Russian demand to pay for fuel with (£340 million) per day from gas sales to to its foreign exchange reserves and
roubles disrupts or halts supplies. the bloc and it has very few options for bolster its currency.
Moscow’s insistence on rouble rerouting this supply to other markets, The EU is preparing more sanctions
payments for the Russian gas that meets according to the BBC. against the Kremlin, sources told Reuters,
a third of Europe’s annual energy needs Russia’s most senior lawmaker said with their scope depending on Moscow’s
has galvanised others in Europe: Greece Russia could demand rouble payments stance on gas payments in roubles.
called an emergency meeting of suppliers, for other commodities including oil, Europe faced an energy crunch even
the Dutch government said it would urge grain, fertilisers, coal and metals, before Russian troops entered Ukraine
consumers to use less gas and the French raising the risk of recession in Europe in February, with EU gas storage levels
energy regulator told consumers not to and the United States. at about 26 per cent of total capacity,
panic, according to Reuters. Moscow has said it would not below normal levels at this time of year.
The demand for roubles, which immediately demand that buyers pay The European Commission said it
has been rejected by G7 nations, is for gas exports in the currency and that would work closely with member states
in retaliation for crippling Western the decree would not affect shipments to prepare for any gas shortages and
sanctions on Russia following its which have already been paid for. has proposed legislation requiring
invasion of Ukraine. Two Russian sources told Reuters as countries to fill levels to at least 80 per
Moscow, which says it is conducting a one of the options for the switch, Russia cent by November. However, that would
“special military operation” there, calls planned to keep contract prices for be almost impossible without Russian
Western measures an “economic war”. gas exported to “unfriendly” countries supplies, reports Reuters.
Unlike the US and Canada, the EU but demand the payment be done in The 80 per cent target would not
has not placed bans on oil or gas, as its the rouble equivalent on a pre-agreed apply if the European Commission
member nations are heavily reliant on it. settlement day. declared an EU-wide or regional gas
Russia supplies the EU with about 40 Western countries have said payment supply emergency - which it can do
per cent of its gas and a third of its oil in roubles would breach contracts that if at least two countries declare an
imports, which are mainly paid for in can take months or more to renegotiate, emergency first.

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News.indd 6 21/04/2022 12:04