Vladimir Putin only wanted to deliver gas for rubles. The EU has banned this with reference to the sanctions. In the meantime, both sides have agreed on a tricky system that, on the one hand, meets the mutual regulations and, on the other hand, ensures gas supplies.
Economy is never moral, but always practical. And sometimes she invents ways that politics would not have thought of. An example of this can be seen in how the energy supply companies deal with the sanctions that the EU has decided on against Russia.
When Russia invaded Ukraine, the EU states quickly agreed that the answer could only be harsh sanctions. Individual Russian business bosses were put on sanctions lists, money transfers to and from Russia were made more complicated, and energy supplies were gradually boycotted. Since then, these screws have been tightened several times – Germany, Austria and Italy are only very sensitive to one point: Gas should continue to flow, and of course the recipients also wanted to pay for it. Russian gas, it quickly became apparent, is the EU’s Achilles heel.
The Russian ruler Vladimir Putin recognized this and decreed that gas could only be paid for in rubles. That should help their own currency, which crashed when the war broke out. However, it did not correspond to what the EU demanded of companies in its member countries. Here an EU that wanted to bring Russia to its knees economically by all means, there a Russian ruler who could not allow that. That was the irreconcilable situation up until two weeks ago.
Then a transitional period ended, by which the regulation dictated by Putin was to come into force – and lo and behold: there is a solution. It looks like this: The gas continues to flow, the companies in Europe, especially the German suppliers, pay for it in euros or dollars, just as the EU sanctions do. However, the state-owned Gaszprom Bank, where the money ends up, has set up special accounts where the money is converted into rubles.
The mechanism is a bit more complex than before, but the main thing is that it works and everyone is happy. The EU continues to get gas and its companies are strictly adhering to the sanctions requirement not to pay in rubles. Russia continues to deliver, receives money that is urgently needed, especially in the war chest. “The fact that the Russians say we paid in rubles, we have to live with that,” said Uniper CEO Klaus-Dieter Maubach in an interview with the FAZ. The system is “consistent with the new payment mechanism,” the company says. Payment was made for the first time at the end of May. In this way, Uniper is acting in compliance with the sanctions and can continue to guarantee timely fulfillment of the contract. “The procedure was agreed in advance with the federal government and follows the relevant EU guidelines.” Germany’s largest electricity supplier RWE also stated that it had changed its payment method to the new specifications.
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However, not everyone participated in this solution. The Finnish state-owned energy supplier Gasum, for example, had no intention of going down this route – and took Gazprom to court for breach of contract. There was no other choice, said Gasum boss Mika Wiljanen. Payment in rubles is out of the question. As a result, Russia promptly stopped its gas supplies to Finland at the end of May.
The agreement on these payment modalities also creates the effect that Russia wants, that the ruble has risen to a seven-year high compared to the euro due to strong demand. The collapse of the ruble, as it became apparent after the outbreak of war, is history.
With this solution, morality takes a back seat, the feasible has come to the fore. Sometimes that helps people though.