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Putin further increases troubles for the EU

Vladimir Putin has said buyers of Russian gas from Ukraine will have to pay in rubles from Friday or face "consequences".

After signing a decree, the Russian leader announced on television, "They will have to open accounts in Russian banks in rubles and from these accounts pay for the gas delivered to them and tomorrow." If he declined, Putin said, "existing contracts will be put on hold".

"If payments are not made in rubles, it will be considered a breach of obligations on the part of the buyer and shall be paid for."

Moscow published a list of "unfriendly" countries in early March, including the United States, members of the European Union, the United Kingdom, Canada, Japan, Switzerland, Taiwan, South Korea, Norway and Australia.

Russian gas is vital to the European Union, intensifying its quest to abandon its dependence and find alternative energy sources since the Russian invasion.

About 60% of Europe's gas imports are currently being paid for in euros, and the rest in dollars. Putin wants to change this by requiring foreign gas importers to buy the ruble and use it to pay state-owned supplier Gazprom.

Putin's decree, signed and published by state news agency RIA Novosti, says that a designated bank will open two accounts for each buyer, one in foreign currency and one in the ruble.

The buyer will pay in foreign currency and authorize the bank to sell that currency for rubles, which is kept in another account where the gas is formally purchased.

Importers have to find a bank that can convert euros and dollars into rubles. Some Russian banks have been blocked or disconnected from the SWIFT messaging system that facilitates international payments.

But other Russian banks have not been shut down, and for now, sanctions barring bank transactions by the US Treasury include the exception of energy payments – a concession to European allies dependent on Russian oil and gas.

After talking to Putin this week, some European leaders were left in a dilemma. Italian Premier Mario Draghi said he had received assurances from Russia's leader that Europe would not have to pay in rubles for natural gas.

On Wednesday, the German government said Putin had also told Olaf Scholz that Berlin could continue to pay Gazprom bank in euros, converting the currency to the ruble.

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