The following article discusses the issues surrounding Russia’s insistence that in future it be paid in rubles for any natural gas it ships to Europe. The writer points out that a major problem for Russia is that it effectively received no payment whatsoever for past shipments, due to the freezing of the bank accounts involved. When its accounts were frozen, it lost the money it received for gas that had already been delivered, meaning that the EU essentially got the gas for free.
Many thanks to Hellequin GB for translating this article from Anti-Spiegel:
The intricacies of the gas dispute with Russia: “Germany wants to get Russian gas for free”
There are nuances in the dispute over Russian gas supplies that are not mentioned in Western media. So I want to do this here.
In the dispute over Russian gas supplies to Europe, there are some details that the Western media are hiding. Politicians and the media in the West have been upset for four weeks that Russia is now demanding payment for Russian gas in rubles. First of all, that’s not worded correctly, and secondly, the EU provoked it itself. We will now take a closer look at this.
Ruble payments for gas
The new regulation primarily stipulates that European importers will have to make payments to special Gazprombank accounts in Russia, and payments to accounts in Europe will no longer be accepted, but will be returned. However, payments can be made in euros or dollars, as stipulated in the contracts. However, the gas is considered paid for only when the bank converts the money into rubles and transfers it to a Gazprom account.
Russia introduced this rule for two reasons. The first and most important reason was that the EU sanctioned and froze various Russian banks and various Russian accounts in the EU. Among them were accounts that previously received payments for Russian gas. In plain language, this means that Russia supplied the gas, that the importers paid for it, but that Russia was then denied access to this money. Or to put it even more clearly: In fact, Russia supplied some of its gas free of charge. For this reason, Russia has decided that from now on payments must be transferred to accounts in Russia, because they cannot be frozen by the EU.
The second reason for this arrangement is that it supports the Russian ruble. The West imposed sanctions with the aim of weakening the Russian currency and causing the Russian economy to collapse. However, this failed completely, because after the ruble initially plummeted, it quickly recovered and is now worth even more than before the start of the intervention in Ukraine and the sanctions imposed as a result.
This annoys Western politicians. Their anger about the so-called ruble payments for Russian gas has nothing to do with the new regulation itself, but rather that they can no longer freeze the funds, and that the Russian economy or the Russian state budget have not been significantly weakened.
That’s what the current excitement is all about.
The supply contracts
And something else is not discussed in the West. It is about the long-term supply contracts that Gazprom has concluded with European importers. In the contracts, Gazprom undertakes to deliver a certain amount of gas within a specified period, and the importers also undertake to purchase and pay for this amount. In plain language, this means that if the EU stopped importing gas tomorrow, the importers would still have to pay for the agreed amount of gas, even if they didn’t buy it.
Gazprom will probably not be able to sue to enforce this in any court, since in the prevailing anti-Russian hysteria no judge in Europe would rule in Gazprom’s favour, but that doesn’t change the fact that it is the case.
There was an example of this being the case only recently: when the Turk Stream pipeline was completed, it was cheaper for Gazprom to pump gas through the modern pipeline to southern Europe than through the ailing Ukrainian pipeline through which the gas had previously flowed. According to current transit contracts, Gazprom must pump a certain amount of gas through Ukraine and pay a transit fee for it. Gazprom paid this fee even though it did not pump gas through Ukraine.
President Putin then instructed Gazprom to pump the relevant gas through Ukraine anyway, even if it was more expensive, because Putin is always keen on Russia fulfilling all of its contracts. Russia is doing this even now, supplying gas to Europe, even though the EU has declared all-out economic war on Russia and even frozen some of the gas payments it has made.
Incidentally, this is causing more and more irritation in Russia, and more and more experts are openly speaking in the media in favor of Russia’s stopping gas exports to the EU. After all, the Russian gas keeps the economy in Europe running, which makes the economic war against Russia (and also the arms deliveries to Ukraine) possible in the first place. Yes, this will surprise many, but in the alleged Russian dictatorship, experts can openly criticize the president on state television. And that’s what a lot of people do on this subject.
“Germany wants Russian gas for free”
Russian television dedicated a brief article to the current developments, which I have translated to show how differently the topic is reported on in Germany.
Start of translation:
Germany wants to get Russian gas for free
Germany will not pay for Russian gas in rubles and is doing everything possible to become independent of Russian energy resources as soon as possible, according to German Finance Minister Christian Lindner on Twitter.
By the way, the West got Russian gas for free by freezing Russia’s foreign exchange accounts, President Vladimir Putin said.
“We delivered our resources, in this case gas, to European consumers and they received it. They paid us in euros, which they themselves then froze. In other words, we delivered part of the gas to Europe for free,” Putin said.
All of this went on for many years and made the development of Germany and the EU possible. “Of course, it can’t go on like this. Especially if the gas supplies continue and are paid for in the current way, and the new incoming payments in euros or dollars can be blocked,” Putin stressed.
On March 31, the President signed a decree establishing a new procedure for buyers from unfriendly countries paying for Russian gas, starting April 1.
These countries have to transfer the foreign currency to Gazprombank, which buys rubles on the stock exchange and transfers these rubles to Gazprom.
At the same time, Russia will continue to supply gas in the quantities and at the prices stipulated in the contracts.
end of translation
Afterword from the translator:
I don’t know about you, but to me this seems outright criminal. I’m pretty sure that if I receive goods from a supplier I’m at loggerheads with personally, and then “pay” for those goods into an account I know is “invalid”, the sheriff of the court will come knocking at my door fairly soon.