EU leaders hold crisis talks after Russian gas cuts

EU leaders hold crisis talks after Russian gas cuts. 

European Union energy ministers will meet in an emergency meeting on Monday to try to come up with a united response to Moscow’s demand that European buyers pay for Russian gas in roubles or risk having their supply cut off.

Last week, Russia cut off gas supplies to Bulgaria and Poland after they failed to comply with its demand that they pay in roubles.

These countries had already intended to stop using Russian gas this year and claimed they would be able to manage. 

Still, it has sparked fears that other EU countries, especially Germany, Europe’s gas-dependent economic powerhouse, could follow suit.

MORE: Britain claims Russia plans for long-term control of Ukraine’s Kherson.

It has also threatened to splinter the EU’s united front against Russia, citing differences of opinion on the best course of action.

With many European companies facing gas payment deadlines later this month, EU nations must quickly determine whether companies can continue to buy the fuel without violating EU sanctions imposed in response to Russia’s invasion of Ukraine.

Foreign gas buyers must deposit euros or dollars in an account with Gazprombank, a privately held Russian bank, which will convert them to roubles.

The European Commission has warned countries cooperating with Russia’s program could violate EU sanctions and suggested that sanctions-compliant transfers could be made provided the payment is declared complete in euros before being converted into roubles.

Brussels is developing more instructions after Bulgaria, Denmark, Greece, Poland, Slovakia, and others called for more precise information last week.

Russia claimed on Friday that the regulation, which considers the buyer’s commitment to be completed only after the hard currency has been converted to roubles, is without flaws.

While Bulgaria and Poland have refused to participate in Moscow’s scheme, Germany has underlined the Commission’s workaround to allow corporations to pay. 

In contrast, Hungary has stated that buyers are welcome to participate in Russia’s scheme. find out more

Payments in roubles can assist Russia’s economy in withstanding the effects of sanctions, while fuel profits can be used to fund a “special military operation.”

According to the Center for Research on Energy and Clean Air, since Russia invaded Ukraine on February 24, EU countries have paid Russia more than 45 billion euros ($47.43 billion) for gas and oil.

Russia provides 40% of the EU’s gas and 26% of its oil imports, a reliance that has led Germany and others to resist calls for an immediate halt to Russian fuel shipments for fear of economic harm.

After talks between the Commission and EU members over the weekend ahead of meetings this week, officials say the EU is edging closer to a ban on Russian oil imports by the end of the year.

At a meeting on Wednesday, ambassadors will examine the Commission’s proposal of the sixth package of EU penalties against Moscow.

Ministers will meet on Monday to discuss the urgent need to secure non-Russian gas supplies and replenish reserves as countries prepare for supply disruptions.

Dependence on Russian gas varies by country, but analysts have predicted that a complete shutdown would send many countries, including Germany, into recession, necessitating emergency measures such as industry closures.

Diplomats stated Austria, Hungary, Italy, and Slovakia expressed doubts about an oil embargo over the weekend.