Russia cuts off gas to Poland, Bulgaria is “blackmail”, said the head of the EU

The EU chief executive on Wednesday called Russian giant Gazprom’s move to cut off supplies to some European customers “blackmail” but said the bloc was working on a coordinated response to Moscow’s escalation.

Gazprom said it stopped deliveries to Poland and Bulgaria due to non-payment for gas in rubles, which was Moscow’s toughest response to sanctions imposed by the West in connection with the conflict in Ukraine.

“Gazprom’s announcement that it is unilaterally cutting off gas supplies to consumers in Europe is yet another attempt by Russia to use gas as a blackmail tool,” European Commission President Ursula von der Leyen said in a statement.

“This is unreasonable and unacceptable. And this once again shows the unreliability of Russia as a gas supplier,” the statement says.

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Von der Leyen said the EU is ready for such a scenario and will continue its work to secure alternative gas supplies and fill gas storage facilities. EU rules require all countries to have a contingency plan in place to deal with a gas supply crisis. EU gas storage facilities are currently 32% full.

The EU has been working on a coordinated response to the Russian escalation, and the bloc’s “gas coordination group” made up of national governments and the gas industry met on Wednesday morning, von der Leyen said.

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Poland’s climate ministry said on Tuesday its energy supply is secure and there is no need to restrict supplies to consumers.

Brussels has been seeking a common EU response to Russia’s demand for ruble payments after Moscow issued a decree in March asking energy buyers to open accounts with Gazprombank to make payments in euros or dollars, which are then converted into rubles.

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The commission said companies must continue to pay in the currency agreed in their contracts with Gazprom (97% of which are denominated in euros or dollars), and that paying in rubles could violate EU sanctions against Russia.

However, Brussels said that EU companies could be able to legally pay for gas under a Russian decree, for example, if companies can confirm that their contractual obligations have been met when they deposit euros into Gazprombank, and not later, after how Russia converted the payment into rubles.

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Austrian Chancellor Karl Nehammer said on Wednesday that Poland and Bulgaria had refused to use the payment system set out in the Russian decree to deposit euros through Gazprombank.

Analysts say the issue of ruble payments could lead to a split in the bloc’s united front against Russia over its invasion of Ukraine if some countries are willing to pay in rubles.

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It was also not immediately clear whether companies sending euros to Gazprombank to be converted into rubles received confirmation that their euro deposit would signify the completion of the transaction, as the EU intended.

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“The EU should collectively refuse to play the Russian game,” Phuc-Vinh Nguyen, an energy expert at the Jacques Delors Institute, said, adding that if one country sent rubles, others could follow in an attempt to avoid cutting off gas supplies.

“The biggest risk I see right now is the fragmentation of the EU if some buyers comply with the Russian request, while others do not,” Simone Tagliapietra, senior fellow at the Brussels think tank Bruegel.

Nguyen said European countries should focus on urgent measures to curb gas use, such as cutting back on heating and air conditioning to conserve stocks ahead of winter.