Europe on Edge: Germany Braces for Gas Rationing, Triggering Emergency Plan to Manage Energy Supplies
Germany triggered an emergency plan to manage gas supplies on Wednesday (March 30) under which Europe’s largest economy could ration power if a standoff over a Russian demand to pay for fuel with rubles disrupts or halts supplies.
Moscow’s insistence on ruble payments for the Russian gas that meets a third of Europe’s annual energy needs has galvanized others in Europe: Greece called an emergency meeting of suppliers, the Dutch government said it would urge consumers to use less gas and the French energy regulator told consumers not to panic.
The demand for rubles, which has been rejected by Group of Seven nations, is in retaliation for crippling Western sanctions on Russia following its invasion of Ukraine.
Russia’s most senior lawmaker said on Wednesday that Moscow could demand ruble payments also for other commodities including oil, grain, fertilizers, coal and metals, raising the risk of recession in Europe and the United States.
Moscow is expected to make public its plans for ruble payments on Thursday (March 31), although it said it would not immediately demand that buyers pay for gas exports in the currency.
Putin told German Chancellor Olaf Scholz by phone on Wednesday that nothing would change for European partners and payments would still be made in euros and transferred to Gazprom bank, a German spokesperson said.
Germany Will Continue Paying for Russian Gas in Euros/Dollars After Scholz-Putin Call
Germany will continue to pay for Russian gas in euros or dollars, a government spokesman said, adding that Putin had told the German chancellor nothing would change for European partners despite his plan for ruble payments.
Russia has said that because of Western financial sanctions over Ukraine, it plans to require payment for its energy exports—especially the gas that Germany depends on—in rubles rather than the usual euros or dollars from April 1.
In a phone call between the leaders, Putin told German Chancellor Olaf Scholz that nothing would change for European partners and payments would be made in euros and transferred to Gazprom bank, which would convert the money into rubles, the German spokesperson said.