German Chancellor Olaf Scholz refused Russian President Vladimir Putin’s request to have Germany pay for Russian fuel deliveries with rubles.
At a Group of Seven (G7) press convention in Brussels on Thursday, Scholz stated it’s because “there are fastened contracts” that specify the funds have to be made in euros or {dollars} “and that is what counts,” Politico reported.
Putin’s request got here seemingly as an try and return some worth to the ruble, which dramatically fell after Russia invaded Ukraine and western international locations unleashed a flood of sanctions towards the nation.
In a televised authorities assembly, Putin stated he would solely require the funds in rubles for “so-called unfriendly international locations,” as belief within the euro and the greenback has been “compromised.” Following his announcement, the ruble’s worth rose, because the European Fee reported that Russia gives about 45 % of the European Union’s fuel imports.
Nevertheless, Scholz stated Germany won’t heed this requirement, as “there are fastened contracts in every single place, which embrace the foreign money by which funds are made.” Although the nation has not banned Russian power imports outright, it dealt a blow to the Russian economic system in delaying the Nord Stream 2 pipeline.
Scholz has stated a direct ban on Russian power imports would have a unfavorable impact on German residents, in keeping with Politico.Germany makes use of Russian fuel to cowl half of its power wants, and if the Nord Stream 2 pipeline was accomplished, it might warmth about 26 million German houses.
On the G7 (a political group made up of Germany, america, the UK, Italy, Japan, France and Canada) convention, Scholz stated the group will “react with additional sanctions ought to this turn into obligatory,” although he didn’t specify what sorts of conditions would make extra sanctions obligatory.
“We comply with hold sanctions in place for so long as obligatory and to watch their effectiveness,” Scholz stated.
Marcel Salikhov, president of the Institute for Power and Finance in Moscow, informed NPR that Putin’s request for making funds in rubles for power was a “symbolic counter-sanction” of western nations.
“It is tough, given the present financial state of affairs, for Russian authorities to desert gross sales of oil and fuel to the western international locations,” Salikhov stated. “You may say, ‘We don’t belief euros or {dollars},’ however economically it is the identical operation. Cash is cash.”
The worth of the ruble plummeted following the implementation of sanctions brought on by the invasion of Ukraine, with Newsweek reporting final month that it value 4,500 rubles to fill a 12-gallon tank of fuel. An economist assessed that Putin has made “Russia like poisonous waste” for international buyers.
Newsweek reached out to Russia’s Ministry of Overseas Affairs for remark.
Replace 03/24/22, 2:20 p.m. ET: This story was up to date with extra info.
Replace 03/24/22, 1:32 p.m. ET: This story was up to date with extra info.