EU splits over ‘blackmail’ as Putin halts gas supplies to Poland and Bulgaria

That EU was split yesterday Russian “Blackmail” to pay for gas in rubles after Moscow’s state-controlled energy giant halted supplies to two European countries.

Gazprom’s move to halt supplies to Poland and Bulgaria after eastern countries refused to pay for supplies in rubles raised fears of further disruptions across the bloc.

Warsaw and Sofia are said to have taken a principled stand and refused to make payments in Russian national currency as requested by Wladimir Putin.

But Hungary and Slovakia yesterday prepared to use a circumvention scheme that would allow them to pay for Russian gas in euros while still meeting Moscow’s demands.

Last month, Putin signed a decree splitting the EU, requiring all “enemy” countries to pay for their oil and gas imports in rubles and that contracts would be suspended if the payments were not made.

EU countries can, through a mechanism created by the European Commission, send euros to Russia’s third-largest bank, which then uses the funds to deposit rubles into Gazprom’s accounts in Moscow in exchange for gas supplies. Ursula von der Leyen, the President of the Commission, dodged the issue yesterday when asked about it.

She said that countries paying for gas in rubles would be violating the bloc’s sanctions against Moscow, but did not mention the circumvention scheme proposed by her officials. Her warning came as 10 European gas buyers, including Germany’s Uniper and Austria’s OMV, were reportedly preparing to meet Putin’s payment demands through the scheme.

Dmitry Peskov, the Russian president’s spokesman, said other countries could lose their supplies if they don’t follow suit.

German officials admitted the threat, widely seen as an attempt to arm Russia’s energy supply, had sparked concern in Berlin.

It later emerged that Commission officials had advised member states to open euro-denominated accounts with state-backed Gazprombank to make future payments without violating EU sanctions.

“If Gazprom takes payment in euros or dollars as contracted and delivers gas against payment, then they have fulfilled a contract, with no involvement between EU companies and the sanctioned Central Bank of Russia,” a source said.

“What they do with the money after that is their internal affair.”

Hungary and Slovakia were among those who confirmed they had struck deals with Russia’s third-largest bank to deposit rubles into Gazprom’s account in exchange for euros to pay for gas exports.

Sources said Poland and Bulgaria’s supplies of Russian gas were cut off after the countries refused to consider the Commission’s bypass solution. Mateusz Morawiecki, Poland’s prime minister, branded the Russian move a “direct attack” on his country.

“Poland will not need Russian gas at all from autumn,” he added. “We will deal with this blackmail, with this gun to our head, so that the Poles will not feel it.”

Ms von der Leyen condemned Moscow’s move but insisted the bloc was ready to ensure Warsaw and Sofia had adequate supplies.

She said: “Gazprom’s announcement that it would unilaterally stop gas supplies to certain EU member states is another provocation by the Kremlin. But it’s no surprise that the Kremlin is using fossil fuels to try to blackmail us.”

(© Telegraph Media Group Ltd. 2022)

Telegraph Media Group Limited [2022] EU splits over ‘blackmail’ as Putin halts gas supplies to Poland and Bulgaria

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