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Putin signs decree mandating EU to pay for gas in rubles

The new rules come into force on April 1.

Putin signs decree mandating EU to pay for gas in rubles

The President of the Russian Federation, Vladimir Putin, signed a decree on the ruble payments for the gas supply for “unfriendly countries.” New rules come into force on April 1. Gazprombank is appointed the authorized bank. 

In the case of the refusals to pay for gas in rubles, Putin threatens to cut off the gas supply to Europe. The contracts for purchasing Russian gas will be suspended, BBC reports. The rules for selling gas for rubles, which Putin has established, envision that: 

-companies from the list of “unfriendly countries” (for example, U.S. and EU countries) have to pay for gas in rubles; 

-Gazprombank will open the accounts for these funds; 

-proposed scheme means that Gazprombank will open two accounts for foreign clients: one for foreign currency and one for rubles. So buyers will have to transfer money in euros to a foreign currency account (as they did before), and Gazprombank will then exchange them for rubles in auctions held by the Moscow Exchange and then transfer them to the ruble account.

If the countries included in the list will not start paying in rubles from April 1, Russia will consider it a breach of contract. The supply under these contracts will be stopped. 

In addition, the government's commission on foreign investment control will allow foreign buyers to pay for supplies without following the procedure introduced by the decree.

“Nobody sells us anything for free. And we also do not intend to provide charity. So the current contracts will be terminated,” RIA Novosti reports citing the Russian President. 

The price of gas on the stock exchange in Europe went up after the signing of Putin's decree and exceeded $1395 per thousand cubic meters.

The head of the French Ministry of Economy and Finance, Bruno Le Maire, announced that Germany and France do not intend to pay in rubles. 

The Head of the Ukrainian President’s Office, Andriy Yermak, stated that Putin had declared a gas war on Europe. 

“After the EU and G7 countries refused to pay for gas in rubles, Russia is trying to go all-in,” the head of the President’s Office believes. 

Yermak emphasized that Russians violate all market conditions and logic to save the ruble. In his opinion, the West must now respond as harshly as possible - by abandoning Russia's energy resources.

“Some can not do it rapidly, but there is no other chance for the future. The embargo on the Russian gas and oil should become a priority for everyone,” the head of the President’s Office said. 

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