According to a decree recently signed by Putin, from April 1, if Russia's 48 "unfriendly countries and regions" do not use rubles to pay for natural gas imports from Russia, the consequences will be borne by themselves.
Those facing choice include the United States and the 27 countries of the European Union.
After the promulgation of this decree, the EU wanted to reach an agreement on the matter by means of a vote to reject Putin's proposal, which was rejected by Hungary. This means that the EU cannot yet refuse to use rubles to settle gas in the name of the whole.
Previously, it was the United States and the European Union that banned Russia from using euros and dollars for trade payments, and as a result, Russia was also very "tough", you forbid me to use, then I will not use it at all.
Russia has the confidence, after all, "gas" is just needed.
Germany, Russia's biggest customer for gas, also worried about Russia's gas outage, directly launched the "early warning phase" of the existing gas contingency plan, and now also said that it would thoroughly review and evaluate Putin's decree.
Europe's largest economy could also face constrained power supply.
German Chancellor Schoelz himself has said that without Russian gas, Germany would soon fall into recession. But if it is really settled in rubles, then the sanctions imposed on Russia by European countries these days can only be counterproductive.
This trick is to treat others in the same way as others, and it really makes Europe very difficult.
On March 30, local time, Scholz attended a cabinet meeting in Berlin, Germany
The first problem at the moment is the way to trade.
At the beginning of the Russian-Ukrainian conflict, the United States, together with Europe, kicked some Russian banks out of the Global Interbank Financial Communications Association (SWIFT) payment system, and also froze Russia's euro and dollar assets.
So, the current situation is that there is no ruble in the banks of European countries, and the dollars and euros in russian banks are waste paper.
On March 30, the day before the deadline, Scholz specifically called Putin and asked Russia to provide a written document explaining how to switch payment methods. Russia also agreed that experts from both sides would hold further discussions.
Sounds like a real hassle.
In the view of professionals such as Gao Haihong, director of the International Finance Research Center, there are now at least three trading options:
First, Europe exchanged valuable items for rubles, such as gold.
The chances of Russia accepting this plan are slim. Russia sells natural gas and needs more dollar or euro hard currency.
Second, Europe first exports goods to Russia, earns rubles, and then uses the money it earns to buy natural gas.
This scheme, similar to the ancient barter method, is more difficult for Europe to accept. Because Europe has to sell goods before they can buy natural gas, it is too troublesome to operate.
Third, after the exchange of foreign currency in Europe, the purchase is made in rubles.
This plan is more likely to be accepted by both sides. On the evening of March 31, Putin signed a ruble trading decree, which is also the plan.
The decree says:
From April 1, unfriendly countries and regions should first open a ruble account with a Russian bank, and then pay for the purchased gas through this account.
How to understand, look at a detail - "opening a ruble account in a Russian bank".
The SWIFT sanctions of the United States and Europe only sanctioned some Russian financial institutions, combined with the version of the plan submitted to Putin by The Russian Presidential Press Secretary Peskov on the afternoon of the 31st, which mentioned the Gazprom Bank, which was not sanctioned.
On the streets of Moscow, the logo of a Gazprom Bank
With banks, the point of embarrassment in Germany is to pay in rubles.
Although Putin's decree must first open a ruble account, authoritative economic experts explain that this does not mean that Germany must pay for rubles itself.
"The money injected by Germany can be foreign exchange, and then the Russian bank completes the exchange action, puts the exchanged ruble in the ruble account opened in Germany, and finally pays."
In this way, Germany can say that it has met Russia's demands, bought gas, and paid in dollars and euros.
Lizi has it, and its face has been saved, how to choose it, it depends on Germany.
A 3D printed gas pipeline is placed in front of Gazprom's icon
The second question is whether European sanctions against Russia will continue.
Yesterday, Lord Tan saw a conversation and was very sad:
Macron, who is about to usher in the election, was questioned in front of the people while running for the election, you talk to me about Ukraine, but if tomorrow Putin decides to turn off the gas valve, what should we do?
Macron admits that there is no "magic answer" to solve the problem.
Germany, which imports about 55 percent of its natural gas from Russia and has little gas reserves, is even more problematic. German Deputy Chancellor and Minister of Economy and Climate Protection Harbeck warned that if heating demand rises during a cold weather, storage will soon bottom out.
In order to save energy, some German officials even called for German people to wear sweaters indoors to keep warm.
Before the deadline set by Putin, several German unions also held an emergency press conference, at which they said that if Russia cut off natural gas supply, Europe's industrial chain would collapse rapidly. After all, Germany is Europe's engine of development.
Europe is indeed inseparable from Russia.
Europe has a gas shortfall of at least 300 billion cubic meters per year, relying on imports, and Russia can supply about 150-200 billion cubic meters of natural gas to Europe every year.
Therefore, when European countries impose sanctions on Russia, they have specifically left a gap in energy.
Now, this flaw has been pinched by Russia - trading in rubles, this precedent, you European countries, can not open it.
You know, what European countries lack is not just "gas".
On March 30, the Russian Grain Exporters Union has asked the Russian Central Bank to allow foreign buyers to buy Russian grain in rubles.
At the end of March, 300 grain carriers stranded in the Black Sea had already made Europe particularly nervous, and European Commission President von der Leyen tweeted that it needed to be released as soon as possible.
The European Union has now issued a €2.5 billion grant to some regions to temporarily address the food crisis.
Von der Leyen wants Putin to release ships filled with wheat on the Black Sea
In addition to grain, Europe also relies on Russian exports of non-ferrous metals.
In the case of nickel and palladium, these key materials for the manufacture of electric vehicle batteries and renewable energy storage are very important for Europe, as the world's "environmental pioneer", and nearly half of their imports come from Russia, compared with natural gas.
If Russia uses the same way as natural gas on these commodities, then the sanctions imposed by European countries will not be self-defeating.
Time is running out for European countries. Putin has said:
If the purchase of natural gas is refused in rubles, companies from these "unfriendly countries" of the EUROPEAN Union will be deemed to have failed to comply with their obligations under the gas contract and the validity of the contract will be suspended.
Europe, the choice must be made.
Russian Futures Exchange
Now, because of the "ruble settlement order", Germany, The largest country in Europe, has taken the lead in signaling compromise.
Such a result, after seeing this, some countries are very unhappy - the United States deputy national security adviser in charge of international economic affairs Singh has made it clear on the 31st that the United States does not want to see allies help the ruble appreciate.
Take a look at the ruble's exchange rate curve these days:
Since the escalation of the Russian-Ukrainian conflict, in order to turn the ruble into "waste paper", western countries led by the United States have imposed more than 5,000 sanctions on Russia.
When the United States announced the ban on Russian energy, the ruble fell in response, and 1 dollar could be exchanged against 139 rubles, compared with about 81 rubles against the 1 dollar before the Russian-Ukrainian conflict.
But from mid-to-late March, the ruble began to rebound. Of the 14 trading days, the ruble strengthened on 13 trading days.
On the day Putin signed the "ruble settlement order", the ruble rose again, rising back to about 81 rubles against the dollar.
In other words, the United States has been busy for a month.
An electronic screen on a Russian street shows the exchange rate of the ruble against foreign currency for the day
Perhaps even more unpleasant to the United States is Putin's remark, which is a step towards Russia's financial sovereignty.
What the United States is worried about is not that the "natural gas ruble" will impact the status of the "petrodollar", after all, as the us dollar, which accounts for nearly 60% of the world's foreign exchange reserves and more than 80% of the international settlement, is still the standard currency for international trade settlement.
In Gao Haihong's view, the us dollar plays the role of a third-party currency that can be used to price the entire energy market, while the ruble is currently only required to be used when trading natural gas with Russia.
But you know, finance and money, in essence, are about confidence and credit. How the credibility of the United States is, I should have a little number in my heart.
In the beginning, everyone exchanged foreign exchange reserves for dollars, and let the United States manage them, that is, to trust the dollar. However, the United States regards the us dollar as a sanctions weapon, even if it scares the sanctioned party, it will make other countries feel worried, and it is difficult to ensure that the next one will not be its turn.
So, it's not denied that the dollar is still important, but the world's confidence in the dollar is indeed declining. A recent report from the International Monetary Fund also illustrates the problem:
Since the early 2000s, the share of dollar reserves held by central banks has fallen by 12 percentage points, from 71 percent in 1999 to 59 percent in 2021.
When more and more countries recognize, eggs should not be put in the same basket. This is the moment of crisis for the dollar.
This game, in the current view, who wins and who loses, is not yet known.
But Europe is caught in the middle and has become a loser.
A few days ago, Biden told European countries that although you have suffered losses in sanctioning Russia, you have maintained "moral correctness."
The price tag of "moral correctness" is really high.
The United States, in fact, is also in Russia's list of "unfriendly countries and regions", and still ranks first, but the United States imports natural gas from Russia itself is very small, and it has also embargoed Russia's energy early on, cutting off continuous supply, and has nothing to do with him.
The United States does not depend on Russian energy.
On March 31, Biden announced that he would release 1 million barrels of strategic petroleum reserves per day for the next six months, the largest in history.
It's just that Europe's energy problems, who will solve them?
On the 25th, von der Leyen and Biden spoke at a joint press conference held in Brussels
In the great power game, Europe, which has always pursued independence and autonomy, what choice to make, I really have to think about it.
In fact, a similar situation, 40 years ago, also occurred:
In 1981, the United States announced sanctions for the Siberian oil and gas pipeline project because it had moved from the Soviet Union into the hinterland of the United States' Western European allies.
To stop the project, the United States authorized the CIA to install defective software into the Soviet Union, causing the pipeline's control system to spiral out of control and causing a massive explosion of the Siberian gas pipeline.
However, at that time, the US sanctions did not have the support of France, Italy, and West Germany, who believed that the sanctions were more than worth the losses and the cost was too large, so they chose to continue to cooperate with the Soviet Union.
Even in the context of the Cold War, European countries have chosen to safeguard European interests.
Today, Europe's situation is aptly described in terms of a black humor that the German economist Hammer said: "Under pressure from the United States, Europe was not only forced to shoot in its own foot, but also forced to amputate itself." ”
A complete Europe or a "crippled" Europe, the only one who can make a decision is Europe itself.
Column Editor-in-Chief: Qin Hong Text Editor: Fang Ying Title Image Source: Figure Worm Image Editor: Cao Liyuan
Source: Author: Yuyuan Tan Tian, Lord Tan