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ENERGY

What would Germany do if Russia cuts off the gas supply?

Germany and France are preparing for a cut in Russian gas deliveries, France's economy minister said Thursday, as Russian President Vladimir Putin warned Moscow will turn off the taps for those who refuse to pay in rubles.

German Economics Minister Robert Habeck and French Business Minister Bruno Le Maire
German Economics Minister Robert Habeck (Greens) and French Business Minister Bruno Le Maire meet in Berlin to discuss European energy policy on March 31st, 2022. Photo: picture alliance/dpa | Bernd von Jutrczenka

“On the sanctions against Russia, we will not accept the payment of gas in any other currency than stated in the contract,” said Bruno Le Maire following talks in Berlin with his German counterpart Robert Habeck.

“There could be a situation tomorrow in which … there is no longer any Russian gas. It’s up to us to prepare for these scenarios and we are preparing,” he said.

Separately, German Chancellor Olaf Scholz said on Thursday that Western countries would continue paying for Russian gas in euros or dollars despite the Kremlin’s threat to cut off supplies not paid for in rubles.

“We looked at the contracts for the gas deliveries,” Scholz told reporters in Berlin.

“They say that payments are made in euros, sometimes in dollars… and I made clear in my conversation with the Russian president that that will remain the case,” referring to a telephone call with Putin on Wednesday.

It came as Putin signed a decree that said buyers “must open ruble accounts in Russian banks” from Friday.

“Nobody sells us anything for free, and we are not going to do charity either – that is, existing contracts will be stopped,” he said.

The order signed by Putin means foreign buyers of Russian gas will have to open an account at Gazprom bank and transfer euros or US dollars into it, reported the BBC.

The bank will then use the currency to buy rubles which will then be used to make the payment for gas.

‘Emergency gas plan’

On Wednesday, Economy and Climate Minister Habeck said that Germany had triggered the first “early warning” alert level under its emergency gas plan. 

He said it was a precautionary measure to prepare for any supply restrictions.

READ ALSO: Germany activates emergency gas plan to secure supply

However, the government also urged households and businesses to cut back on gas as much as possible. 

Habeck said that if deliveries from Russia stopped there would be “serious” consequences although supplies would continue to flow. 

“We are in a situation where every kilowatt-hour saved helps,” Habeck said on Wednesday, urging consumers to limit gas usage.

“You’re helping Germany, you’re helping Ukraine when you reduce your use of gas, or energy in general.”

READ ALSO: Why Germany has urged households and businesses to cut back on gas

What happens if Russia stops energy supplies?

Germany’s Economy Affairs and Climate Action Ministry says that for the coming weeks and summer, thanks to the precautionary measures already taken, Germany could function without gas from Russia.

But in order to guarantee supplies in the coming winter, more measures will have to be taken. 

“The more that is consumed in spring and summer, the more difficult the situation will be in winter,” said the ministry.

“Conversely, the more energy we save now, the better we will get through the winter.”

The ministry said once again: “Therefore, every gas consumer is required to save as much energy as possible.”

Since the outbreak of the war, Germany has been trying to diversify its supplies and accelerating investments in renewable energy to get away from its heavy reliance on Russian gas. 

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ENERGY

Russia using energy ‘as weapon’, says Berlin

German Economy Minister Robert Habeck accused Russia on Thursday of using energy as "a weapon", after Moscow announced sanctions on Western energy firms and a key pipeline again saw lower gas deliveries to Europe.

Russia using energy 'as weapon', says Berlin

“It has to be said that the situation is coming to a head, in such a way that the use of energy as a weapon is now being realised in several areas,” Habeck told a press conference.

Ukrainian Foreign Minister Dmytro Kuleba, on a visit to the German capital, said Moscow had shown itself to be an unreliable supplier.

Kuleba urged Europe to end its heavy dependence on Russian gas that was helping to finance Moscow’s war machine.

“This energy oxygen for Russia must be turned off and that is especially important for Europe,” Kuleba said at a joint press conference with Habeck.

“Europe must get rid of this complete dependence on Russian gas, since Russia has shown… that it is not a reliable partner and Europe cannot afford that.”

Russia on Thursday said it would stop sending natural gas via the Polish section of the Yamal-Europe pipeline as part of retaliation for Western sanctions over its invasion of Ukraine.

The move comes a day after Russia issued a government decree imposing sanctions on 31 EU, US and Singaporean energy firms.

Most of the companies belong to the Gazprom Germania group of subsidiaries of Russian energy giant Gazprom.

The sanctions include a ban on transactions and the entry into Russian ports of vessels linked to the affected companies.

Meanwhile, operators on Thursday reported a drop in gas supplies from Russia via Ukraine for a second day, after Kyiv said it would suspend flows through a key eastern transit pipeline called Sokhranivka because the area wasno longer under Ukrainian control.

But Gazprom has denied there was a case for the Ukrainian side to declare “force majeure” and said it was impossible to reroute all the supplies through another Ukrainian pipeline.

‘Blackmail’ fears

Gazprom told the Interfax news agency that supplies transiting Ukraine on Thursday were at 50.6 million cubic metres in total, compared to 72 million cubic metres the day before.

Germany, which is hugely reliant on Russian energy, said it had been able to make up the shortfall through gas imports from Norway and the Netherlands.

The head of Germany’s Federal Network Agency, Klaus Mueller, also noted that Russia had been very “surgical” about its pick on which companies to sanction, selecting only storage and trading companies, and “not the operators”.

This “very well-planned, precise decree allows it to keep doing business with Germany, but not on old contract conditions”, rather under new conditions that other gas dealers would then have to conclude with Russia, said Mueller.

Europe’s biggest economy is racing to wean itself off Russian energy and has already almost completely phased out Russian coal.

But ditching Russian oil and gas will be more difficult.

With fears growing that Russia could abruptly turn off the energy taps, Habeck said Germany was focusing on building up gas reserves to prepare for winter.

“The gas storage facilities must be full by winter or else we will be in a situation where we can easily be blackmailed,” he warned.

READ ALSO: Russian gas transit halt in Ukraine hits key pipeline’s inflow in Germany

By Michelle FITZPATRICK

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