Putin ask’s hostile countries aka Europe to open accounts in Russian banks for gas

A Kremlin decree released by state media on Thursday says “hostile countries” can continue to pay for natural gas in foreign currency through a Russian bank that will convert it to rubles.

But on a more bellicose note, President Vladimir Putin clarified that from Friday Russia will begin accepting ruble payments from “hostile countries” and contracts will be suspended if buyers do not agree to the new terms.

He said that to buy gas, customers “will have to open ruble accounts in Russian banks.”

“If those payments are not made, we will consider the buyer to be in default, with all the corresponding consequences,” Putin said.

The decree signed by Putin and published by the state news agency RIA Novosti says that a designated bank will open for each client two accounts, one in foreign currency and one in rubles. Buyers will pay in foreign currency and authorize the bank to buy rubles with that money, which will be deposited in the second account as formal payment for the gas.

Shortly after Putin’s announcement, German Chancellor Ola Scholz gave an evasive response. He stated that the current contracts state that payments are made mainly in euros and sometimes in dollars, and that he made it clear to Putin in a telephone conversation on Wednesday that he “will continue like this.”

“What are your ideas for making this happen we will now study carefully,” Scholz told reporters in Berlin. “But in any case, what matters for companies is that they want to and will be able to pay in euros.”

Earlier, Italian Prime Minister Mario Draghi said Putin had assured him that Europe would not be forced to pay for gas in rubles, allaying fears that Moscow would cut supplies of gas used for heating and electricity.

According to Draghi, Putin assured him during a 40-minute phone call on Wednesday that “existing contracts will remain in force… European companies will pay in dollars and euros.”