Russian President Vladimir Putin announced on Thursday that “unfriendly″ countries will have to purchase natural gas exports using rubles beginning on Friday.
Putin had announced the measure earlier this month, but did not say when it would begin being enforced.
“In order to purchase Russian natural gas, they must open ruble accounts in Russian banks. It is from these accounts that payments will be made for gas delivered starting from tomorrow,” Putin said in televised remarks, according to a report from Reuters. “If such payments are not made, we will consider this a default on the part of buyers, with all the ensuing consequences. Nobody sells us anything for free, and we are not going to do charity either – that is, existing contracts will be stopped.”
A number of Western nations have said that they will not comply — but Russia currently supplies about 1/3 of Europe’s gas.
Nations that do not comply will be subject to having their contracts halted.
“Western companies and governments have rejected the move as a breach of existing contracts, which are set in euros or dollars. France’s economy minister said France and Germany were preparing for a possible scenario that Russian gas flows could be halted – something that would plunge Europe into a full-blown energy crisis,” Reuters reports.
France has said that they will not budge, even if it means their flow of gas is disrupted.
“The contracts are in euros and must be paid in euros and will be paid in euros,” French finance minister Bruno Le Maire said during a joint press conference with his German counterpart Robert Habeck, according to a report from CNN Business. “We will not accept the method of payment for [Russian] gas in any other currency than stated in the contract,” Le Maire added.
German Chancellor Olaf Scholz has also stated that they are only willing to make payments in euros.
“We have looked at the contracts on gas delivery and other deliveries. [The contracts state] that payments are to be made in euros, sometimes in US dollars, but mostly in euros. And I made clear in my conversation with the Russian president that this will remain as it is,” Scholz told reporters.
Gas buyers will be able to transfer foreign funds to a Russian bank and have it exchanged for rubles to make their payments.
The ruble had fallen in value under heavy sanctions from the West over the military operation in Ukraine, but has since bounced back.
“The ruble’s rebound would seem to indicate that U.S. sanctions haven’t effectively crippled Russia’s economy, which is the price Putin should have to pay for his war,” said Sen. Pat Toomey, according to a report from PBS.