After gas stop for Poland and Bulgaria: How does Germany pay for Russian gas?

Created: 04/29/2022 05:07

By: Fabian Hartmann

Gas only for rubles: Russia has stopped deliveries to Poland and Bulgaria.

How does Germany pay for the raw material - and is the supply at risk?

Munich – Russia is serious: The country has stopped gas supplies to Poland and Bulgaria.

The reason: both countries have refused to pay for their deliveries in rubles.

At least that's how the Russian state-owned company Gazprom justified the end of the business relationship.

The Ukraine conflict is now having a direct impact on the energy supply in Europe.

Gas from Russia: how does the money get to Moscow?

But: Germany and other EU countries have also been paying in euros so far - and thus in accordance with the sanctions of the European Union against Russia.

So is there a risk of an end to supply here too?

Although Russia insists on payments in rubles, the country has left a back door open.

Germany and other countries continue to pay in euros.

Gazprom Bank then exchanges the euros for rubles.

A booking trick in the background.

However, it is unclear whether Poland and Bulgaria have refused this procedure - or whether Russian President Vladimir Putin wants to set an example at this point in order to further increase the pressure on the West.

Sofia and Warsaw stress that they have fulfilled their contractual obligations.

The EU Commission criticized the Russian action as an attempt at blackmail, which a Kremlin spokesman rejected.

Gas from Russia: How dependent is Germany?

The fact is: German gas storage facilities are currently around 33 percent full.

So if President Putin decides to stop deliveries immediately, the Federal Republic would still get through the summer.

The country could even help other countries - such as Poland and Bulgaria - with bottlenecks.

So it's no wonder that the Federal Ministry of Economics reports: "Currently, security of supply is guaranteed here".

Is Russia's President Vladimir Putin turning off the gas for the EU?

© Mikhail Klimentyev/dpa

Dependence on Russia has recently decreased significantly: last year the Federal Republic covered 55 percent of its gas requirements in Russia.

In March it was 40 percent.

In the meantime, the share of Russian deliveries is only 35 percent. Federal Minister of Economics Robert Habeck (Greens) promises that the share of Russian gas should fall to ten percent by summer 2024.

In the case of oil and coal, progress is still to be made.

Gas from Russia: is Putin also turning off the gas in Germany?

The starting position for Germany is therefore relatively comfortable.

Stand now.

Because: By winter at the latest, when gas consumption increases, there could also be supply problems in Germany.

However, energy experts do not believe that Russia will cut off Germany's gas supply.

"We shouldn't panic now that Russia will do the same to us.

Russia needs the income," Tobias Federico, head of the energy consulting firm Energy Brainpool, told

.

Gas from Russia: How are Bulgaria and Poland getting gas now?

The markets reacted calmly to the Russian gas boycott of Poland and Bulgaria.

And both countries continue to get the raw material.

How it works?

So far, natural gas has flowed through the more than 4,000-kilometer-long Yamal pipeline from Russia via Belarus and Poland to Germany.

"The tap was turned off," said Poland's climate minister Anna Moskawa on Wednesday (April 27).

That's true in the economic sense. But not in the technical-physical sense.

Because the gas keeps flowing – now straight to Germany.

Polish traders are now buying the raw material in Germany.

Instead of flowing from east to west, the gas is increasingly flowing from west to east.

Bulgaria also uses other suppliers.

Gas from Russia: Why is Russia's currency recovering despite the war?

Despite Western sanctions, the Russian currency has recovered.

Most recently, the ruble was even close to a two-year high against the euro.

The aim of the sanctions was also to weaken the Russian currency.

The consequence would be inflation and thus greater political pressure on President Putin.

But Russia has taken a number of countermeasures – not market-based, but effective.

The existing capital controls ensure that oligarchs and companies do not simply change rubles and move funds abroad.

Within six months, the exchange volume must not exceed $10,000.

In addition, the Russian central bank raised interest rates significantly when the war began.

They peaked at 20 percent.

In the meantime, the interest rate has been lowered again to 17 percent.

But: Due to the high interest rates, savers have a strong incentive to leave their money in the bank.

In addition, Russia continues to generate high export earnings from the sale of oil and gas.

The fact that the ruble has been so stable recently is also due to the fact that Russia simply exports more goods than it imports.

Economists then speak of an export overhang.

And that strengthens the currency.