In the wake of Russia’s Vladimir Putin demanding for “unfriendly” countries to pay for Russian gas with rubles, multiple and mixed reactions emanated from the European Union and it’s member states, as the measure was squarely directed at them.
Hungary’s Prime Minister, Viktor Orban said his country will not turn off cheap Russian gas and buy expensive American energy, indicating his country’s willingness to adhere to the measure demanded by Putin.
Austria has also indicated that they will be paying for their Russian gas supplies in rubles, it has argued against an embargo on Russian gas.
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Poland, a strong advocate for sanctions on anything Russian, and Bulgaria on the other have seen their supply of Russian gas halted by Gazprom, as both countries vehemently refuses to pay for the gas in rubles.
The EU and the G7 also reacted to the announcement, with the EU saying that asking for payment for Russian gas in rubles would be a breach of contract, while the G7 dismissed the demand in its entirety.
On Sunday, Hungarian official Gergely Gulyas told public radio while multiple European leaders have publicly proclaimed they won’t buy Russian gas in rubles as Russian President Vladimir Putin has demanded, 10 EU countries are technically going along with Putin’s plan.
According to Gulyas, these countries’ leaders aren’t admitting this in order to be seen as “being a good European.”
Gulyas said that Hungary has opened a euro account with Russia’s Gazprombank, which then converts payments into rubles before transferring them to suppliers in Russia. This system allows European buyers to comply with Putin’s demand, made in late March, that “unfriendly” countries switch to Russia’s national currency to buy its natural gas.
“There are nine other countries using the same payment scheme, but because today the idea of being a good European also means that the leaders of those countries are not honest when speaking either in the international arena or to their own people, the other nine countries won’t say that they are doing the same thing,” said Gulyas, who serves as Prime Minister Viktor Orban’s chief of staff.
“There should be no doubt in anyone’s mind that countries importing raw materials from Russia use exactly the same method to pay for Russian gas,” he added.
RT reports that it is unclear which EU countries Guylas was referring to. A Bloomberg report last week stated, as Gulyas did, that 10 of the bloc’s member states have already set up accounts with Gazprombank, and four have actually paid for Russian gas using this mechanism.
Hungary depends on Russia for all of its gas imports, and has therefore opposed EU sanctions on this critical commodity. Gulyas reiterated this commitment to Russian energy and opposition to Brussels’ sanctions regime on Sunday.
“We mustn’t adopt sanctions with which we primarily penalize ourselves instead of those we want to sanction,” he said, referring to soaring energy costs throughout Europe. While the government in Budapest has condemned Russia’s military operation in Ukraine, Guylas said that it would “continue to buy our energy at the cheapest possible price” to offset any costs on the Hungarian people.
Four European countries have already made gas payments to Russia using Moscow’s new ruble-based mechanism, Bloomberg reported on Wednesday citing a source close to Russian gas exporter Gazprom.
Also, according to the publication, at least 10 countries have set up ruble accounts with Russia’s Gazprombank, through which the payments for the Russian commodity will be made from now on. This was done to facilitate payments due at the end of May.
Bloomberg’s source said that Russia is unlikely to halt supplies to any more European countries, should they refuse the new payment requirement, until then.
In total, Russia supplies pipeline gas to 23 European countries.
Russia introduced the new ruble-based payment mechanism for natural gas exports last month, after the EU and several other countries imposed sanctions on Moscow over its military operation in Ukraine. Under the new scheme, gas buyers from those countries are required to set up ruble accounts with Gazprombank.
They are allowed to make payments in their currency of choice, but through this account their payments will be converted into rubles to reach the gas provider.
Nnamdi Maduakor is a Writer, Investor and Entrepreneur
