Buyers in 48 countries, including the EU, will be required to open a bank account in both foreign currency and rubles at Gazprombank in Russia, according to a decree issued Thursday. The targets are countries that have imposed sanctions on the Russian economy, government and business elite for invading Ukraine. Vladimir Putin said on Thursday that Russia was establishing a “clear and transparent plan” for these foreign customers. “If such payments are not made, we will consider it a bankruptcy on the part of the buyers – with all the consequent consequences,” he added during a speech to the Kremlin. The decision and the threat of a power outage, largely proposed by the Russian president last week, have caused concern in European countries that rely heavily on Russian gas. Germany announced on Wednesday that it was preparing for the energy bulletin. Putin gave the central bank, customs authorities and the government 10 days to implement the new system. A similar change in payments for other commodities, such as oil, metals and fertilizers, is also being considered. German Chancellor Olaf Solz said on Thursday he had told Putin that his country had checked its gas contracts with Russia and would continue to pay for them in euros and sometimes dollars. Speaking at a news conference with his German counterpart Robert Habeck, French Finance Minister Bruno Lemerre said France and Germany were preparing for all scenarios, including the cessation of gas supplies from Russia to Europe. Both also opposed the payment for gas supplies in rubles. “Contracts contain provisions that define the currency in which they must be settled, and therefore contracts must be settled in that currency,” Le Maire said. An official from the French Ministry of Finance later said that in his analysis the contracts would be paid in euros to Gazprom, which would then convert the payment into rubles. “Given the uncertainties, we are preparing contingency plans for gas supplies.” The German Association of Eastern Enterprises, which promotes trade relations with Eastern European countries, called on Russia to “respect existing gas supply contracts without change.” “By making unilateral changes, Russia is endangering decades of energy relations with Germany and the EU and accelerating the collapse of this business model,” he added. The reason for the change in ruble payments was the arming of the Western financial system, Putin said. “When companies from these countries refuse to fulfill contracts with Russian banks, companies, individuals, when they freeze assets in dollars and euros, it makes no sense to use the currencies of these countries,” he added. “The transfer of payments for Russian gas supplies to Russian rubles is an important step towards strengthening our financial and economic sovereignty.” Russia will try to use its currency as payment for other exports, Putin added. “We will continue to move consistently and systematically in this direction as part of a long-term plan to increase the share of foreign trade arrangements in the national currency and currencies of countries that are reliable partners.” Additional references by Harry Dempsey and Olaf Storbeck
