Germany rejects Putin's roubles for gas demand

A view shows a gas processing facility, operated by Gazprom company, at Bovanenkovo gas field on the Arctic Yamal peninsula, Russia May 21, 2019. REUTERS/Maxim Shemetov

BERLIN, March 31 (Reuters) - German Economy Minister Robert Habeck on Thursday rejected demands by Russia that European countries pay for its gas in roubles as an unacceptable breach of contract, adding that the manoeuvre amounted to "blackmail".

Speaking during a joint news conference with his French counterpart, Habeck said he had not yet seen a new decree signed by President Vladimir Putin mandating gas payments in roubles.

"With regard to the threat, demand or consideration - one doesn't know what to call it anymore - to be made to pay in roubles, it is crucial for us that the contracts are respected," said Habeck. "It is important for us not to give a signal that we will be blackmailed by Putin."

Separately, Chancellor Olaf Scholz said German companies would continue to pay for Russian gas using euros as stipulated in contracts.

"By all means, it remains the case that companies want, can and will pay in euros," he told a joint news conference with his Austrian counterpart Karl Nehammer.

EMERGENCY PROCEDURE

Germany on Wednesday triggered an emergency procedure to monitor gas imports and storage capacity and urged consumers and manufacturers to reduce consumption in preparation for any Russian delivery stoppage.

The network regulator said on Thursday the situation was stable and that storage had risen slightly.

Habeck said he and French Finance and Economy Minister Bruno Le Maire discussed possible new punitive measures on Russia, declining to go into details.

"The last sanctions package must not and should not be the last. We spoke about what additional sanctions can prevent Putin from continuing the war in Ukraine," Habeck said.

Scholz also raised the possibility of new sanctions on Russia over its invasion of Ukraine, adding that Germany was prepared for all scenarios, including a stoppage of Russian gas flows to Europe.

Scholz reiterated that Germany hoped to become independent of Russian oil and coal imports this year, but it would take longer to reduce its dependence on Russian gas.

Reporting by Tassilo Hummel and Joseph Nasr Editing by Gareth Jones

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