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Germany and Italy approved Russian gas payments after nod from Brussels

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© Reuters. FILE PHOTO – A model of the natural gaz pipeline can be seen in front of Russia and EU flag colors in this illustration, taken on March 8, 2022. REUTERS/Dado Ruvic/Illustration

Stephen Jewkes, Markus Wacket

MILAN/BERLIN (Reuters – Sources said that Germany and Italy suggested to companies that they open rouble accounts in order to continue buying Russian gas, but not violate sanctions. This was after discussions with the European Union.

European governments have had to test their resolve in taking a tough line against Russia over its demand that foreign buyers buy gas in Russian rubles.

Moscow demanded that Poland, Bulgaria, and Finland pay gas through Gazprombank accounts. They have not done so and the supplies of these countries have been reduced.

However, other member states have not been willing to direct companies in the right direction, which could lead to the loss of vital Russian gas supplies that heat homes and power factories.

Brussels gave two sets written guidelines about how to buy Russian gaz without breaking sanctions. However, the legal pathway remains obscure as EU officials advised closed-door firms not to open Gazprombank accounts in rouble.

An EU-member diplomat from Brussels stated that they felt the advice was vague in order to encourage countries to keep purchasing Russian gas while opening rouble accounts.

“One gets the impression that it opens the doors for business as usual”, one diplomat explained. They also stated that they feared it would undermine EU unity against Russia by allowing companies to open accounts in roubles in certain countries while not others.

Referring to the Commission’s guidance, another diplomat stated that “They had to create some creative ambiguity.” “The goal of creative ambiguity, as it is called, is to make enough space for different interpretations.”

The Commission refused to comment.

Spokesman for Commission said Thursday that companies should not open rouble accounts.

‘GREY ZONE’

Two sources confirmed to Reuters that Berlin has told German importers of gas to open rouble accounts in order to purchase Russian gas, without violating any sanctions. However, they must make payments to Gazprombank in russian currency.

According to sources, Germany was the main importer in Russia of Russian gas and has been cooperating closely with the EU on this issue.

A senior source in the government told Reuters that the Italian government spoke with European Commission officials and was given clear instructions on legal ways to purchase Russian gas.

This happened just before Eni, an Italian energy company, stated Tuesday that it was opening two accounts in euros and roubles.

The source stated that the decision was in accordance with the communication made by the department. This refers to the energy department of the European Commission.

Mario Draghi, the Italian Prime Minister, stated last week it was “grey” whether Russia’s payment plan would violate sanctions. There has been no official decision.

Draghi’s office did not respond to Friday’s request for comment.

The EU stated in written guidance that companies could buy Russian gas from Russia without violating sanctions, provided they paid in the currency of existing contracts. They also declared that this fulfills their contractual obligations.

The majority of contracts EU companies have with Gazprom, (MCX:), are either in dollars or euros.

However, the guidance didn’t explicitly state that opening accounts in roubles to convert into Russian currency for payments was a violation of EU sanctions.

Katja Yafimava is a senior researcher at the Oxford Institute for Energy Studies and said that there were no legal grounds to believe opening an account in roubles would violate sanctions.

Buyers can open such accounts. “There’s nothing in the written guidance to stop them,” she said. She said that although the European Commission’s verbal statements may have caused ambiguity it was the written guidance that is important.

The enforcement of EU sanctions is up to the national governments. These were adopted by every member state.

If member countries disagree about gas payments, Brussels may launch legal action against them.

Poland demanded that Brussels provide clearer guidance on the question of whether companies are allowed to open rouble accounts.

The spokesperson from the Dutch economic affairs ministry stated that the country is lobbying for an EU position, and to “draw one for the entire EU”.

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