The EU is drafting a plan to comply with the demands of the Russian president without violating sanctions, according to sources.
According to sources in attendance at a closed European Commission meeting on Friday, new guidance would allow importers of gas to open a Russian state-owned Gazprombank account and pay in euros or dollars, which would then be converted to rubles by the bank.
According to the sources, companies should make a clear statement that they consider their obligations fulfilled once they pay in euros or dollars, in line with existing contracts.
Putin wants unfriendly countries to pay for gas in Rubles to maintain the strength of a currency that is being propped up by strict capital controls and high interest rates, threatening to cut off a line that supplies 45% of the EU's gas imports.
The commission is trying to find a way to satisfy Putin without technically breaching sanctions, with an indication that paying into a Gazprombank account in euros or dollars would be legal.
Buyers have to set up two accounts, one in domestic and foreign currency. Sources said it was unclear if the updated guidance would change the situation, as paying in the domestic ruble would violate sanctions.
Sources previously said that 20 companies have set up accounts at the bank. The demands were described as blackmail and a clear violation of contract by the European Commission president.
According to one of the sources, Germany, Hungary, Italy, and France were in favor of the plan, while Poland said it didn't offer legal clarity, and others were confused by a lack of specific guidance.
Most EU countries have payment deadlines with Russia for gas imports at the end of the month, at which point failure to comply with Putin's demands could see the taps turned off, as was the case with Poland and Bulgaria in April.
A 195 billion euro plan to wean itself off of Russian fossil fuels is being prepared by the bloc, according to a draft document.
All Rights Reserved © 2024
