Making good on its promise, Russia has shut off natural gas to Poland and Bulgaria for not paying in roubles, a clear sign of economic escalation towards the EU over the war in Ukraine.
“Gazprom has completely suspended gas supplies to Bulgargaz (Bulgaria) and PGNiG (PGN.WA) (Poland) due to [the] absence of payments in roubles,” Russian state-controlled gas company Gazprom said in a statement.
Russian President Vladimir Putin previously announced his plan to make the EU pay in roubles in March after the US and several EU countries began providing financial and military aid to Ukraine and sanctioning Russia.
“In order to purchase Russian natural gas, they must open rouble accounts in Russian banks. It is from these accounts that payments will be made for gas delivered starting from tomorrow,” Putin said at the time.
“If such payments are not made, we will consider this a default on the part of buyers, with all the ensuing consequences. Nobody sells us anything for free, and we are not going to do charity either – that is, existing contracts will be stopped.”
Economically, Putin’s retaliation seems to be working, as sanctions had previously decimated the Rouble, but now it’s bounced back to pre-war levels as more become willing to trade with Russian currency.
For their part, those at the EU said Russia’s actions are tantamount to blackmail, despite the mass sanctioning of Russia since the conflict began.
“The announcement by Gazprom that it is unilaterally stopping delivery of gas to customers in Europe is yet another attempt by Russia to use gas as an instrument of blackmail. This is unjustified and unacceptable,” European Commission President Ursula von der Leyen said in a statement.
While many EU countries are digging their heels in, refusing to abide by Putin’s new rouble rules, countries like Germany and Austria — which decimated their energy industries by shutting down nuclear power plants over climate change — aren’t in a strong bargaining position.