Ukraine Updates: All Russia’s Big Exports Could Soon Be In Roubles, Signals Kremlin

ukraine rouble

The Kremlin indicated on Wednesday that all of Russia’s energy and commodity exports could be priced in roubles, toughening President Vladimir Putin’s attempt to make the West feel the pain of the sanctions it imposed for the invasion of Ukraine.

In the strongest signal yet that Russia could be preparing an even tougher response to the West’s sanctions, Russia’s top lawmaker suggested on Wednesday that almost Russia’s entire energy and commodity exports could soon be priced in roubles.

Asked about the comments by parliament speaker Vyacheslav Volodin, Kremlin spokesman Dmitry Peskov said: “This is an idea that should definitely be worked on.”

“It may well be worked out,” Peskov said of the proposal.

Peskov said that the U.S. dollar’s role as a global reserve currency had already taken a hit, and that a move to pricing Russia’s biggest exports in roubles would be “in our interests and the interests of our partners.”

“If you want gas, find roubles,” Volodin said in a post on Telegram. “Moreover, it would be right – where it is beneficial for our country – to widen the list of export products priced in roubles to include: fertilizer, grain, food oil, oil, coal, metals, timber etc.”

Russia exports several hundred billion dollars worth of natural gas to Europe each year. Euros account for 58% of Gazprom exports, U.S. dollars 39% and sterling around 3%, according to the company.

Peskov said Russia will give buyers time to switch to roubles.

Still, the exact way in which payments could be made remained unclear as of Wednesday. Russia is trying to both bolster the rouble and, in the longer run, chip away at the dominance of the dollar in pricing global energy and commodities.

To have any hope of achieving that, Russia would need help from China, the world’s second-largest economy.

“China is willing to work with Russia to take China-Russian ties to a higher level in a new era under the guidance of the consensus reached by the heads of state,” Chinese Foreign Minister Wang Yi said.

Sanctions Boomerang

Russian officials have repeatedly said the West’s attempt to isolate one of the world’s biggest producers of natural resources is an irrational act of self harm that will lead to soaring prices for consumers and tip Europe and the United States into recession.

Russia says the sanctions – and in particular the freezing of about $300 billion in Russian central bank reserves – amount to a declaration of economic war.

Former President Dmitry Medvedev said the sanctions had “boomeranged” back to undermine European and North America economies, driving up prices for fuel and heating and eroding confidence in the dollar and euro.

“The world is waking up: confidence in reserve currencies is melting like a morning fog,” Medvedev said. “Abandoning the dollar and the euro as the world’s main reserves no longer looks like a fantasy.”

Medvedev said “crazy politicians” in the West had sacrificed the interests of their taxpayers on the altar of an unknown victory in Ukraine. “The era of regional currencies is coming.”

Russia has long sought to reduce dependence on the U.S. currency, though its main exports – oil, gas and metals – are priced in dollars on global markets.

Globally, the dollar is by far the most traded currency, followed by the euro, yen and British pound.

Ruble Rebound Raises Questions Of Sanctions’ Impact

An AP report said:

The ruble is no longer rubble.

The Russian ruble by Wednesday had bounced back from the fall it took after the U.S. and European allies moved to bury the Russian economy under thousands of new sanctions. Russian President Vladimir Putin has resorted to extreme financial measures to blunt the West’s penalties and inflate his currency.

While the West has imposed unprecedented levels of sanctions against the Russian economy, Russia’s Central Bank has jacked up interest rates to 20% and the Kremlin has imposed strict capital controls on those wishing to exchange their rubles for dollars or euros.

It is a monetary defense Putin may not be able to sustain as long-term sanctions weigh down the Russian economy. But the ruble’s recovery could be a sign that the sanctions in their current form are not working as powerfully as Ukraine’s allies counted on when it comes to pressuring Putin to pull his troops from Ukraine. It also could be a sign that Russia’s efforts to artificially prop up its currency are working by leveraging its oil and gas sector.

The ruble was trading at roughly 85 to the U.S. dollar, roughly where it was before Russia started its invasion a month ago. The ruble had fallen as low as roughly 150 to the dollar on March 7, when news emerged that the Biden administration would ban U.S. imports of Russian oil and gas.

The report said:

The ruble has also risen amid reports that the Kremlin has been more open to cease-fire talks with Ukraine.

President Joe Biden promoted the success of the sanctions — some of the toughest ever imposed on a nation — while he was in Poland last week. “The ruble almost is immediately reduced to rubble,” Biden said.

It said:

Russia’s Central Bank cannot keep raising interest rates because doing so will eventually choke off credit to businesses and borrowers. At some point, individuals and businesses will develop ways to go around Russia’s capital controls by moving money in smaller amounts. As the penalties depress the Russian economy, economists say that will eventually weigh down the ruble. Without these efforts, Russia’s currency would almost certainly be weaker.

But Russia’s oil and gas exports have continued to Europe as well as to China and India. Those exports have acted as an economic floor for the Russian economy, which is dominated by the energy sector. In the European Union, a dependence on Russian gas for electricity and heating has made it significantly more difficult to turn off the spigot, which the Biden administration did when it banned the relatively small amount of petroleum that the U.S. imports from Russia.

“The U.S. has already banned imports of Russian oil and natural gas, and the United Kingdom will phase them out by the end of this year. However, these decisions will not have a meaningful impact unless and until the EU follows suit,” wrote Benjamin Hilgenstock and Elina Ribakova, economists with the Institute of International Finance, in a report released Wednesday.

Hilgenstock and Ribakova estimate that if the EU, Britain and the U.S. were to ban Russian oil and gas, the Russian economy could contract more than 20% this year. That is compared with projections for up to a 15% contraction, as sanctions stand now.

Knowing this, Putin has greatly leveraged Europe’s dependence on its energy exports to its advantage. Putin has called for Russia’s Central Bank to force foreign gas importers to purchase rubles and use them to pay state-owned gas supplier Gazprom. It’s unclear whether Putin can make good on his threat.

The White House and economists have argued that the impact of sanctions takes time, weeks or months for full effect as industries shut down due to a lack of materials or capital or both. But the administration’s critics say the ruble’s recovery shows the White House needs to do more.

“The ruble’s rebound would seem to indicate that U.S. sanctions have not effectively crippled Russia’s economy, which is the price Putin should have to pay for his war,” said Sen. Pat Toomey, R-Pa.

Sen. Sherrod Brown, chairman of the Senate Banking, Housing and Urban Affairs Committee, said Wednesday that lawmakers are considering ways to expand the sanctions Biden recently imposed on members of the Russian parliament “and probably widen that to other political players.” Brown, D-Ohio, said lawmakers also are weighing more penalties against banks.

Western leaders, under Biden’s encouragement, embraced sanctions as their toughest weapon to try to compel Russia to reverse its invasion of Ukraine, which is not a member of NATO and not protected under that bloc’s mutual defense policy.

Some of the allies now acknowledge their governments may need to redouble financial punishment against Russia.

British Prime Minister Boris Johnson said Wednesday that the Group of Seven major industrial nations should “intensify sanctions with a rolling program until every single one of (Putin’s) troops is out of Ukraine.”

But that’s a tougher ask for other European countries such as Germany, which depend on Russia for vital natural gas and oil. The EU overall gets 10% of its oil from Russia and more than one-third of its natural gas.

Many of those countries have pledged to wean themselves off that dependence — but not immediately.

If European nations did move more quickly off Russian petroleum, wrote analyst Charles Lichfield of the Atlantic Council, “a more comprehensive embargo from Europe would threaten Russia’s current account surplus — suddenly making it more difficult to pay public-sector salaries and wage war.”

He noted that “such an outcome may be beyond the reach of Western consensus.”

Italy’s Draghi Pledges To Boost Military Spending Amid Internal Opposition

From Rome, Reuters reported:

Italy will honor a pledge to NATO to raise defence spending to 2% of GDP, the office of Prime Minister Mario Draghi said on Tuesday, despite opposition within his broad coalition.

Rome’s current defence expenditure amounts to around 1.4% of national output, and Draghi reassured his international partners that he would boost this figure following Russia’s invasion of Ukraine.

However the 5-Star Movement, the biggest party in the ruling coalition, has unexpectedly said it was opposed to any swift boost in spending as the country is still trying to recover from the COVID-19 pandemic and sharp rise in energy costs.

“The government intends to respect and strongly reiterates NATO commitments to increase military expenditure to 2% of GDP,” Draghi’s office said following a meeting between the prime minister and the 5-Star leader, former premier Giuseppe Conte.

The issue is shaking the ruling coalition as parliament debates on a decree that provides Ukraine with weapons and offers help to its refugees.

The 5-Star has so far dismissed any speculation it could quit the government but it showed no sign of backing down on the defence hike.

Military spending in Italy remained steady at between 19 billion and 21 billion euros ($21 billion-$23 billion) from 2008 to 2018, but it jumped after Conte became prime minister that year, rising by 17% by the end of 2021, defence ministry figures show.

New World Financial Order Is Coming, Says Moscow

A new financial order will be negotiated in the world, and the West will not have the main say in it anymore, ex-Russian President Dmitry Medvedev has claimed.

The “hellish” sanctions imposed on Russia by the U.S., EU, and their allies over the conflict in Ukraine have failed to cripple to the country, but are instead “returning to the West like a boomerang,” Medvedev, the former Russian president who is now the deputy chairman of the Russian Security Council, wrote on Telegram. “This is hurtful for our ‘friends’ in Europe and overseas.”

But while the West continues its “fruitless efforts” to restrict Russia, “the world is gradually moving towards a new logic of global economic relations; towards upgrading the financial system,” he said.

According to Medvedev, the U.S. and EU have “tarnished their reputation” by blocking the reserves of the Russian central bank. “It is impossible to trust those who freeze the accounts of other states; steal other people’s business assets and personal possessions, compromising the principles of sanctity of private property.”

After the outbreak of the conflict in Ukraine in late February, the U.S. and EU froze nearly half of Russia’s foreign currency reserves, worth $300 billion. Washington created a special Task Force, KleptoCapture, to oversee the implementation of sanctions against Moscow and seize the assets of individuals and entities who violate them.

Confidence in reserve currencies is “fading like the morning mist,” and the prospect of abandoning the dollar and euro in this role does not seem like such an unrealistic prospect anymore, he said. “The era of regional currencies is coming.”

He said: “No matter if they want it or not, they’ll have to negotiate a new financial order,” Medvedev said. “And the decisive voice will then be with those countries that have a strong and advanced economy, healthy public finances and a reliable monetary system. And not with those who endlessly inflate their public debt, issuing more and more pieces of paper into circulation which aren’t backed by national wealth.”

Russia And China To Advance Fair World Order

Russian Foreign Minister Sergey Lavrov met on Wednesday, with his Chinese counterpart, Wang Yi, for the first time since the Ukraine conflict began on February 24.

The neighboring countries will work to achieve “a multipolar, fair, and democratic world order,” Lavrov said after arriving in Tunxi, a city in China’s eastern inland Anhui Province, on Wednesday. Russian Foreign Ministry spokeswoman Maria Zakharova posted a photo of the two ministers greeting each other with an elbow bump.

Beijing has argued that economic restrictions disrupt world trade and will not resolve the conflict. Officials insist only dialogue and diplomacy can lead to peace.

TASS quoted Wang as saying that despite “new challenges” to the ties between the two nations, “the will of both sides to develop bilateral relations has become even stronger.”

The minister said this month that China’s relations with Russia is “one of the most crucial bilateral relationships in the world,” and hailed the friendship between the pair as “ironclad.”

Tunxi will host a summit on Afghanistan on Thursday, attended by the US, Russia, and Pakistan. American and other Western troops left the country last year after more than 20 years of occupation, while the Taliban militant group returned to power in Kabul.

U.S. Sends Russia Sanctions Czar To India

A U.S. national security official – who played a leading role in crafting U.S. economic measures against Russia over its military assault on Ukraine – will travel to India to discuss New Delhi’s response, the White House announced on Tuesday. National Security Council spokesperson Emily Horne also explained that the two sides would review their economic ties as Washington pressures allies to take tougher action against Moscow.

The deputy national security adviser for international economics, Daleep Singh, will meet, this week, with officials to “advance a range of issues in the U.S.-India economic relationship and strategic partnership,” Horne outlined.

“Singh will consult closely with counterparts on the consequences of Russia’s unjustified war against Ukraine and mitigating its impact on the global economy,” she continued, adding that the adviser would also speak about the “development of an Indo-Pacific Economic Framework.”

Formerly of Goldman Sachs and a veteran of two previous administrations, Singh has been dubbed by multiple media outlets as the “architect” and “czar” of the anti-Russia sanctions.

The meetings in New Delhi come as the U.S. and some of its major allies press India to join the punitive sanctions campaign against Moscow. So far, it has declined to go along, even refusing to vote to condemn the attack at the UN.

Twitter Deletes ‘Pro-Moscow’ Indian Accounts

A number of allegedly “pro-Russian” Twitter accounts in India have been suspended for apparent “coordinated inauthentic behavior” after posting messages supportive of Moscow’s military offensive in Ukraine, the New York Times has reported.

Twitter suspended more than 100 users following research published by Marc Owen Jones at Qatar’s Hamad bin Khalifa University and Graham Brookie of the Atlantic Council’s digital forensic research lab.

The pro-NATO lobby group is funded by the U.S. and British governments, as well as a number of Ukrainian oligarchs.

The Times itself admitted, however, that “there was no hard evidence [the accounts] are part of a coordinated influence campaign aimed at shifting sentiment about the war” in Ukraine. The paper also pointed out that India’s government has maintained a neutral policy toward the war thus far – and a Twitter spokeswoman claimed the company was still investigating.

The platform acknowledged in a recent blog post that it has deleted 75,000 accounts for violation of its “platform manipulation and spam policy” since the war in Ukraine began. Those accounts are not thought to “represent a specific, coordinated campaign associated with a government actor.”

Jones highlighted alleged “suspicious behavior” among those Indian accounts promoting the Russian government’s view on the war, including accounts using stock photos in profiles and gaining plentiful likes and retweets despite few followers. The profiles had also used the #IStandWithPutin hashtag.

It is unclear how many of the accounts belonged to real people, but some of them most likely were real, Jones said.

“If you can get enough people spreading a message, then real people will join in,” he told the Times.

Brookie noted the “longstanding and deep security and economic relations” between India and Russia, saying Moscow would be “looking to countries like India” to abstain from international efforts to isolate it.

After an Indian student was killed in Ukraine during the fighting earlier this month, some of the 20,000 Indian citizens struggling to escape were reportedly subjected to racism, as Ukrainians at the border refused to allow them on trains and buses headed for safety, telling them they would have to walk – reports that may have added fuel to anti-Ukrainian and pro-Russian sentiment in the country.

India is not the only place where Twitter has nuked accounts for alleged inauthentic posting. In the months preceding the 2020 U.S. election, for example, Facebook removed over 10,000 accounts and pages from 13 countries – including a multitude of then-president Donald Trump’s supporters – for just such behavior.

Facebook (now Meta), Twitter, and other major social media platforms have long worked hand in hand with highly politicized think tanks like the Atlantic Council, and Western news agencies, to help them fight “disinformation” online during elections and times of political upheaval.

US Ramps Up Imports Of Banned Russian Oil

The volume of Russian oil imports by the U.S. has increased by 43% from March 19 to 25 compared to the previous week, according to a new report by the US Energy Information Administration (EIA). Data showed the US imported up to 100,000 barrels of Russian crude per day.

Imports had been suspended during the week of February 19 to February 25. However, in early March, the weekly supply of Russian oil reached its maximum value in 2022, amounting to 148,000 barrels per day.

The ramp up comes despite U.S. President Joe Biden’s signing of an executive order on March 8, banning energy imports from Russia and new investment in the Russian energy sector. The U.S. Treasury has set a deadline for the completion of transactions for the import of oil, oil products, LNG, and coal from Russia into the country until April 22.

In 2021, Russian oil supplies to the United States more than doubled compared to 2020, reaching 72.608 million barrels. That is 3.3% of the US’ total imports. Russia has also provided 20% of the total supply of petroleum products to the United States.

West Wants Ukraine To Be ‘Second Afghanistan’, Says Moscow

Russian Foreign Minister Sergey Lavrov has accused the West of attempting to turn Ukraine into “a second Afghanistan.” He was speaking during a meeting with his Pakistani counterpart, Makhdoom Shah Mahmood Qureshi, in China on Wednesday.

The remarks came ahead of a summit on the situation in the Central Asian country, which will take place on Thursday in Tunxi city, and will be attended, by China and Russia, as well as the US, and others.

“Those who tried to make Afghanistan the center of world politics are now trying to replace Afghanistan with Ukraine,” Lavrov said.

Speaking ahead of his meeting with the Chinese Foreign Minister Wang Yi, Lavrov said that the world was now going through “a very serious stage in the history of international relations.”

 Position of Africa

The Ukraine conflict is impacting wide areas of the world.

Media reports said:

Many African countries seek to remain neutral in the Russia-Ukraine conflict to give diplomacy a chance and focus on their own economic and political future in a world undergoing radical change, leaders from the continent said at a conference in the United Arab Emirates on Wednesday.

The U.S. and its allies are pressuring countries to join their campaign of sanctions against Russia.

But many countries are taking a different stand.

“We abstained because we want the world to give diplomacy a chance,” Vice President Philip Mpango of Tanzania said at the World Government Summit in Dubai, according to The National, an Abu Dhabi daily.

Mpango was referring to his government’s vote at the UN General Assembly on March 2.

The nonbinding resolution calling for Russia to withdraw from Ukraine was endorsed by 141 UN members, with five voting against and 35 abstentions – including 17 African countries.

Mpango said that the African continent is going through a “momentous time” and seeing “a transformation of trade routes from the established colonial ones to Africa doing more business with the eastern world.” This is an opportunity for the continent to make progress, by diversifying its culture and using technology to better interact with the world, he added.

“We are witnessing the shifting of tectonic plates, particularly with the rise of China and India on the global economic stage,” Mpango said.

The changing global circumstances are an opportunity for African nations to forge a new path for themselves, said Mohamed Beavogui, the prime minister of Guinea.

“We are at a crucial turning point as the world is in crisis,” said “For years people said don’t worry about war ‘it’s only in Africa’. Now it is in the middle of Europe and we are suddenly asked to choose,” he said in Dubai. “We want to see if it is possible to get people around a table to talk to each other.”

Africa has troubles of its own that require government attention, said Prime Minister Robinah Nabbanja of Uganda. “We have more problems and abstaining is the way of diplomacy,” she said.

The conflict between Moscow and Kiev is not affecting the continent. Much of Africa imports grain from both Russia and Ukraine, but the trade has been disrupted due to military operations as well as Western sanctions.

“We have already seen rapid increases in food prices, we’re also seeing fertilizer costs rise and steel prices are going up,” Tanzania’s Mpango said.

Biden’s Deterrence Strategy Failed In Ukraine: U.S. Commander Admits

A Fox News report said:

U.S. Gen. Tod Wolters admitted that President Biden’s strategy to deter Russia from invading Ukraine failed during testimony before the House Armed Services Committee on Wednesday.

Wolters made the admission in response to questions from Republican Wisconsin Rep. Mike Gallagher. While Gallagher did not reference Biden by name, he questioned Wolters about the effectiveness of the U.S. effort to deter Russia’s invasion by non-military means in the months leading up to the invasion.

“You as a combatant commander felt that you were part of an inter-agency effort intended to deter Vladimir Putin from invading Ukraine?” Gallagher asked.

“That’s correct,” Wolters responded. “Deter and dissuade.”

“Would it be fair to say that deterrence failed in Ukraine?” Gallagher pressed.

“Number one I would say that NATO’s solidarity remained,” Wolters began, before being cut off by Gallagher pressing for a direct answer to the question.

“I cannot argue with your conclusion,” Wolters finished.

The exchange comes as the Biden administration continues to insist its threats of sanctions against Russia were never meant to deter an invasion.

“Let’s get something straight,” Biden told a reporter who pressed him on the issue Thursday. “You remember if you covered me from the very beginning, I did not say that, in fact, the sanctions would deter him. Sanctions never deter. You keep talking about that. Sanctions never deter.”

Vice President Kamala Harris indicated otherwise when asked whether she believed sanctions would deter Putin in February, however.

“Absolutely – we strongly believe – and remember also that the sanctions are a product not only of our perspective as the United States but a shared perspective among our allies. And the allied relationship is such that we have agreed that the deterrence effect of these sanctions is still a meaningful one, especially because – remember, also – we still sincerely hope that there is a diplomatic path out of this moment,” she said at the time.

Secretary of State Antony Blinken also stated in a February interview with CNN that the “purpose of the sanctions in the first instance is to try to deter Russia from going to war.”

White House press secretary Jen Psaki also affirmed that the purpose of Biden’s sanctions was to have a deterrent effect.

“Sanctions can be a powerful tool,” Psaki said. “They have been in a lot of moments throughout history. And what we view them as – or how we’re viewing them as we’re starting high, as Daleep just conveyed here, in terms of the significance and the severity of the sanctions that were announced today – yes, our intention is to have a deterrent effect.”

U.S. And Germany’s Positions On Ukrainian Security Guarantees

Germany is “100%” prepared to provide some form of security guarantees to Ukraine, while the U.S. government is still “in constant discussion” with Kiev, according to officials from both countries.

The comments came, on Wednesday, after leaked proposals from Russian-Ukrainian peace talks appeared to suggest an arrangement where Moscow and various Western capitals would agree to promise Kiev protection if it agreed to de-militarize.

“If guarantees are needed, then Germany will be there and give guarantees,” Germany’s Minister of Foreign Affairs Annalena Baerbock told state broadcaster ARD on Wednesday, saying Kiev could rely on her country’s support. Baerbock said Berlin was “in full solidarity, by 100%” with Ukraine.

German Chancellor Olaf Scholz also told Ukrainian President Volodymyr Zelensky on Wednesday that Berlin had a “general willingness” to give security guarantees — but a government spokesperson did not specify whether this would include military assistance.

Kiev has consistently called on Western allies to clarify their position on Ukraine’s eventual admission into NATO, or at least to provide it with alternative arrangements. Ukraine joining the US-led military bloc has long been a stated “red line” for Russia.

Baerbock emphasized on Wednesday that, at this point, the negotiations between Ukraine and Russia had not advanced enough and thus Kiev and Moscow’s understanding of the proposals could be entirely different.

Meanwhile, Washington is “in constant discussion with the Ukrainians” about ways it can remain “sovereign and secure,” White House Director of Communications Kate Bedingfield said on Wednesday. Bedingfield stated, however, there was nothing “specific” she could share “at this time.”

Bedingfield also reiterated the White House position against implementing a no-fly-zone over Ukraine, which would risk direct confrontation with Russia.

The round of negotiations between Ukraine and Russia in Istanbul on Tuesday was seen by many as a sign that the sides were creeping closer to an agreement.

Top negotiators said Ukraine was prepared to put aside its ambition to join NATO, host foreign military bases and troops, or seek nuclear weapons. In return, Kiev wants Russia not to object to it one day joining the EU — and has requested NATO-like guarantees of its security from other nations.

Austria And Germany Declare Gas Emergency

The Austrian government has declared a stage-one alert regarding the supply of natural gas, shortly after Germany did the same on Wednesday.

Austria made the move fearing shortages should Russia insist on payments in rubles, rather than the sanctioned dollars or euros.

The stage-one alert means there are “concrete and reliable indications that the gas supply could deteriorate,” Austria’s Climate Ministry announced, adding that it will be “monitoring” the situation. The country’s reserve tanks currently stand at 13%, which is about average for the season, local media reported.

“Everything will be done to ensure the gas supply for Austria’s households and businesses,” Chancellor Karl Nehammer said on Wednesday. If disruptions happen, businesses will be encouraged to seek out alternatives, while gas rationing would not happen until stage three, the government said.

Vienna’s declaration comes hours after Berlin declared the identical stage-one emergency, fearing a possible disruption of natural gas supplies as the clock ticked closer to Russia’s deadline for “unfriendly countries” to start paying in rubles.

With a potential crunch looming, Germany’s Economy Minister Robert Habeck activated the ‘early warning phase’ of an existing gas emergency plan meaning that a crisis team from the economics ministry, the regulator and the private sector will monitor imports and storage.

Habeck told a news conference that Germany’s gas supplies were safeguarded for the time being but he urged consumers and companies to reduce consumption, saying that “every kilowatt hour counts”.

After Habeck’s announcement, German year-ahead wholesale electricity set a three-week high of 185 euros per megawatt hour, up 6.3%.

If supplies fall short, Germany’s network regulator can ration gas supplies, with industry being first in line for cuts. Preferential treatment would be given to private households, hospitals and other critical institutions.

Half of Germany’s 41.5 million households heat with natural gas while industry accounted for a third of the 100 billion cubic metres of national demand in 2021.

Germany and the rest of the EU were designated unfriendly by Moscow over their embargo on trade in euros, imposed due to Russia’s military operation in Ukraine that began last month. If Russia is unable to receive payments for the natural gas shipments in euros or dollars – the U.S. has likewise sanctioned its currency – then it will be rubles or nothing, Moscow said.

When EU leaders complained about how this would be breach of contract, Russia responded that their sanctions amounted to as much. Kremlin spokesman Dmitry Peskov made it clear on Tuesday that Russia had no intention of supplying gas to Europe for free.

Russian President Vladimir Putin and German Chancellor Olaf Scholz discussed the problem earlier on Wednesday, with Moscow and Berlin providing somewhat conflicting readouts of their call.

According to the Germans, Putin said payments could still be made to a bank that hasn’t been embargoed, and Scholz asked for written information to better understand the procedure. The Kremlin said that “experts of the two countries would discuss the issue further.”

Germany’s Top Industrial Union’s Warning

Germany’s top industrial unions have warned that delivery interruptions could result in “the rapid collapse of the industrial production chains in Europe – with worldwide consequences.”


In France, the head of the energy regulator said the country should not encounter any supply issues and said there was no need to panic.

“Everything will be fine, the gas storage facilities are well filled, we’ll make it through the winter,” Jean-François Carenco, head of the CRE, told BFM TV.

Consumer Prices Rise In Spain

Consumer prices in Spain rose nearly 10% year on year in March, their fastest pace since 1985.

China, Russia More Determined To Boost Ties, Says Beijing

A Reuters report said:

Moscow and Beijing are “more determined” to develop bilateral ties and boost cooperation, Chinese Foreign Minister Wang Yi said on Wednesday following a meeting in eastern China with his Russian counterpart, Sergei Lavrov, amid the Ukraine crisis.

The two also condemned what they called illegal and counter- productive Western sanctions imposed on Moscow, the Russian foreign ministry said in a statement.

Wang and Lavrov spoke in the eastern Chinese province of Anhui, where China is hosting two days of multilateral meetings on Afghanistan.

“Both sides are more determined to develop bilateral ties, and are more confident in promoting cooperation in various fields,” Wang said.

“China is willing to work with Russia to take China-Russian ties to a higher level in a new era under the guidance of the consensus reached by the heads of state,” he said.

Russia’s foreign ministry said Lavrov had informed Wang about the progress of military operations in Ukraine and the state of Moscow’s negotiations with Kyiv.

“The sides noted the counterproductive nature of the illegal unilateral sanctions imposed on Russia by the United States and its satellites,” the ministry said in a statement.

The two ministers agreed that Russia and China would continue to strengthen their strategic partnership and to speak on global affairs “with a united voice”, it added.

China’s foreign ministry quoted Wang as saying that bilateral relations had “withstood the test of international turbulence”.

Lavrov said on Monday that Russia’s relations with China were at their strongest level ever.

UK’s Truss To Visit India On Same day As Russia’s Lavrov

Another Reuters report said:

British foreign minister Liz Truss will visit India on Thursday as part of a “wider diplomatic push” on the war in Ukraine, her office said, a trip which coincides with her Russian counterpart Sergei Lavrov travelling to the country.

India’s foreign ministry said Lavrov would also visit India on Thursday, adding Indian officials would hold talks with diplomats from the U.S. and Britain beforehand.

It was not immediately known whether Truss and Lavrov would meet while in India.

The war in Ukraine has strained relations between Britain and India, which became one of the biggest buyers of Russian commodities after the international community began isolating Moscow with sanctions for the attack on Ukraine.

Britain’s trade minister this month said the government was disappointed with India’s stance on the invasion, and that she hoped India’s views would change. Britain and India are currently in negotiations over a free trade deal.

The foreign ministry said Britain and India would announce a new joint cyber security program and closer maritime co-operation in the Indo-Pacific as part of the trip.


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