The Group of Seven major economies has agreed to reject Moscow’s request to pay for Russian gas exports in rubles, the German energy minister said on Monday. Robert Habeck told reporters that “all G7 ministers fully agreed that this (would be) a one-sided and clear breach of existing conventions” on gas, which is used to heat homes, generate electricity and industry. electric power. He said officials from France, Germany, Italy, Japan, the United States, the United Kingdom and Canada met on Friday to coordinate the physical and that representatives of the European Union were also present. Habeck said that “the payment in rubles is not acceptable and we will urge the affected companies not to follow the request of (Russian President Vladimir) Putin.” Putin announced last week that Russia would now require “unfriendly” countries to pay for gas only in Russian currency, instructing the central bank to work out a procedure for buyers to acquire rubles in Russia. Demand has pushed up already high gas prices amid fears that it could be a prelude to a gas cut, which could upset Europe’s economy and hurt Russia’s economy. Economists said the move seemed designed to try to support the ruble, which has collapsed against other currencies since Putin invaded Ukraine on February 24 and Western countries have responded with extensive sanctions against Moscow. However, some analysts have expressed doubts that it will work. Asked by reporters earlier Monday whether Russia could cut gas supplies to European customers if they rejected the demand for rubles, Kremlin spokesman Dmitry Peshkov told a news conference that “obviously we are not going to supply them for free.” “In our case, it is almost impossible and feasible to participate in a charity for Europe,” Peshkov said. Asked what would happen if Russia turned off the taps now, the German energy minister said: “We are prepared for all scenarios.” “Putin’s demand to convert contracts into rubles (means that he stands with his back to the wall in that sense, otherwise he would not have that demand,” Habeck said, adding that Russia needed rubles to finance the war.) its inside. , such as payments to troops. European governments have avoided imposing a ban on energy imports from Russia for fear of impact on the economy. Europe gets 40% of its gas and 25% of its oil from Russia, and after the war, tries to make proposals to reduce its dependence. Russia is equally dependent on Europe, with oil and gas dominating its sector and paying for the government. Estimates of the impact of a boycott or gas embargo on Europe vary, but most imply a significant loss of economic output, especially since the war and the consequent rise in energy and raw material prices are already weighing on the European economy. US sanctions allow for exemptions for oil and gas payments, even though it has banned imports of Russian energy. Putin’s proposal to pay the ruble has prompted the German utility association, BDEW, to call on the government to issue an “early warning” of an energy emergency. A spokeswoman said Monday that the government does not see the need for early warning at this time. When pressured by reporters to make the statement, German Chancellor Olaf Solz said that “the contracts we know of set the euro as the currency of payment and companies will pay according to the contracts they have signed.” The currency used to buy Russian energy “does not matter much,” said Robin Brooks, chief economist at the Institute of International Finance, a trading group for the world’s banks. “What matters is that energy exports give Russia purchasing power, which it can turn into goods from abroad,” he said. “Putin’s demand for payment in rubles” is mainly a showcase. It does not change the underlying transactions, “Brooks said. “On the sidelines, I would call it another ‘own goal’ by Putin, as it increases the focus on gas markets in Western Europe and could potentially increase imports.” —— AP Economics author Paul Wiseman contributed from Washington
