Austrian leader claims Putin allowed Vienna to pay for gas in euros — Analysis

Karl Nehammer (Austrian Chancellor) stated following his visit to Moscow that Russian President Vladimir Putin promised him that the gas would be continued to be delivered to Russia and that Vienna would be allowed continue to pay in euros for its delivery.

“Putin told me that the gas supply is safe, that Russia will deliver the contractually agreed quantities and that payments can continue to be made in euros,”Nehammer shared his thoughts with the German DPA news agency and Austrian APA on Wednesday.

Additionally, the chancellor noted that Austria receives around 80% its gas from Russia. He argued that an EU gas embargo against Moscow is not feasible at this time. This would cause serious harm to both Austrian industry as well as households, but have little effect on Russia.

“You know, there is a decision in the EU that we must try everything to become independent  from Russian gas. This is, of course, the will Austria. It is impossible now. It will take time,”Nehammer speaking to CNN following his visit in Moscow. 

“Austria stands strong with the other EU member states with the sanctions against the Russian Federation, but sanctions must hurt Russia more than the European Union,”He said.

Earlier this month, Austria’s top energy company stated it would be “impossible” to stop buying Russian gas this year, as the country had no access to alternative sources of energy, since neither the US nor Qatar produce enough liquefied natural gas (LNG) to replace Russian imports and there are simply not enough ships and terminals in the EU to accept deliveries of it. The EU currently imports from Russia 40 to 45% of its natural gas, both for heating and industrial uses.

Russian President Vladimir Putin signed on March 31 a decree requiring that payments for Russian gas be made in rubles from April 1. The measure specifically concerns “unfriendly countries” that have imposed economic sanctions on Russia in the wake of the Ukrainian conflict and froze Moscow’s foreign reserves. Kremlin warned that if gas is not paid for, no additional deliveries will be made.

Russia has instructed buyers of its fuel in “unfriendly nations” to open euro and ruble accounts in Russia’s Gazprombank. Payments for gas would be made to the Euro account. After that, they would be converted into rubles by the bank.

Although many EU members have rejected the plan, Hungary is now committing to the new rules.