the times | Thursday April 28 2022 2GM 13News
Germany is worried that Russia could
cut off its gas supplies unless it complies
with a decree from President Putin
after Moscow abruptly suspended sales
to Poland and Bulgaria.
The move by the Kremlin has
increased pressure on countries that
lean heavily on Russian gas, including
Italy, Germany and Austria, to bow to
Putin’s insistence that “unfriendly”
states must pay their bills in roubles.
One expert said that most European
Union importers were “extraordinari-
ly” likely to give way as their invoices
fall due over the coming weeks, despite
the prospect of funding the Kremlin
with its own currency.
Ursula von der Leyen, president of
the European Commission, yesterday
denounced the measure as “blackmail”
and promised that the bloc would
respond immediately, with a growing
consensus around sanctions on
imports of Russian oil. Some member
states are so reliant on Russian gas,
though, that they face a choice between
meeting Putin’s demands and having
the taps turned off.
Under the arrangement set out by
Moscow, EU energy companies would
pay for their gas mostly in euros and
dollars, which would then be converted
into roubles by the financial arm of
Gazprom, the Russian state-owned gas
company. Bulgaria and Poland were
penalised for failing to use this
mechanism when their latest gas bills
arrived from Gazprom.
“It sent a very clear signal that if
there’s no payment under the new
procedure and there’s no derogation
[from Moscow] to continue with the old
procedure then you have a realistic
scenario that you will see your supplies
get cut,” Katja Yafimava, senioreconomy. His soundbite: “They are
the party of excess oil profits and we
are the party of hardworking
people.”
(Our fashion correspondent
writes: Angela Rayner, Labour’s
deputy leader, was wearing
trousers.)
Johnson, who had naughtily
opened PMQs with a list of the
government’s new laws, did that old
thing of claiming that every Labour
government left office with
unemployment higher. Of Starmer
he said: “This guy is doomed to be a
permanent spectator!” Starmer had
earlier called the PM an ostrich, so a
little light abuse was probably
excusable.
Do you think anyone has ever
called President Putin an ostrich? If
they did, what happened to them?
Noise levels were high. Starmer
kept going through the heckles,
knowing the TV feed would still pick
up his words. During the spat on the
economy Johnson looked to his left
for support from the chancellor, who
normally sits there. Rishi Sunak was
absent. He quite often is these days.
Nor was the Lib Dem leader, SirArchibald Davey, on parade. Gaps
on the Tory back benches were
filled by junior ministers. When
local elections are imminent, MPs
often leave Westminster to
campaign locally.
Starmer was cheered by his MPs,
just as Johnson was by most, yet
not all, of his. Two noticeable
exceptions were William Wragg (C,
Hazel Grove) and Simon Hoare (C,
Dorset North). Wragg studiously
held his mobile telephone in front
of his face, as if brandishing a
crucifix against some devilish
presence. Hoare sank in his seat, a
cross expression on his face as
Johnson whipped up cheers from
the Tory benches. He had looked
similarly mutinous earlier during
Northern Ireland questions, when
he heckled the DUP’s grown-up
leader Sir Jeffrey Donaldson. On
Tuesday, when the Scots Nats’ Ian
Blackford made a routine crack
about Johnson being a vote-loser,
Hoare laughed as though he had
just heard a witticism from Tom
Lehrer. If I were a KGB man, or
even a Labour whip, I might invite
Hoare to defect.Q&A
Why has Russia cut off
gas supplies to Poland
and Bulgaria?
Under a decree issued
by President Putin last
month, “unfriendly”
countries must pay
their bills in roubles.
Bulgaria and Poland
ignored their deadlines
and so Gazprom
suspended their
supplies.How badly will these
countries be affected?
Poland, which last year
relied on Russia for
more than 40 per cent
of its gas, says it will
have few problems as
its storage facilities are
76 per cent full and it
has alternative sources
such as Germany and
liquefied natural gas(LNG) delivered by sea.
Bulgaria gets about 90
per cent of its gas from
Russia but most is used
for heating, so it is likely
to cope well until the
winter, when it may be
able to obtain supplies
from Azerbaijan.Which EU member
states could be next?
Countries such as
Germany and Austria
use a great deal of gas
and buy a lot of it from
Russia, with few other
options because of their
limited LNG import
infrastructure. Also, a
Europe-wide scramble
for LNG — already much
in demand — could
push up the continent’s
gas prices, already six
times higher than they
were 12 months ago.Is there any possibility
of compromise?
Russia has set out anarrangement under
which EU importers
could theoretically skirt
sanctions, paying bills in
euros or dollars and
then getting Gazprom’s
bank to change it into
roubles. The fudge
comes with the dubious
ethics of funding Russia
in its own currency, the
fiddly legal situation
and the possibility of
stiff exchange fees, but
some EU states are
willing to play along.How will the EU
respond?
The bloc will have to
redouble efforts to find
alternatives, which have
already led to deals with
LNG exporters such as
the US, Qatar and Israel.
It may take further
steps to consolidate its
gas network. Limits on
Russian oil imports
also seem more
politically feasible.News
to rebuild Ukraine, insists Truss
Germany fears gas
blockade if Putin’s
demands ignored
Oliver Moody Berlin
Bruno Waterfield Brussels
Larisa Brown Defence Editorresearch fellow at the Oxford Institute
for Energy Studies, said.
Poland said that it was well placed to
cope with the shutdown but others
have been unnerved, particularly after
European gas prices briefly rose by a
fifth yesterday.
Germany, which buys about 40 per
cent of its gas from Russia and cannot
wholly replace the imports until 2024 at
the earliest, said that it was “concerned”
by the development and closely moni-
toring the markets. The German
central bank has estimated that the
economy would shrink by 5 per cent
should Moscow cut off supplies, and
inflation could rise by two points above
the current level of just over 6 per cent.
Austria said that it could not free
itself from its dependency on Russian
gas until 2027 and that it was setting
aside a fund of up to €6.6 billion to top
up its reserves before the winter.
Laurent Ruseckas, a gas analyst at
S&P Global, said that these risks would
probably force many EU member states
to fall into line with Putin’s demands,
following the example of Hungary.
Many western leaders have said they
will not allow rouble payments for
Russian gas. Experts argue, however,
that the intricate nature of the arrange-
ment may enable companies to adopt it
while insisting they are still paying in
euros and dollars.
“I think it’s extraordinarily likely that
most EU counterparties will go along
with it,” Ruseckas said. “Whatever
they’ve said about not paying in
roubles, you can ignore it.”
One western official said that
Gazprom’s policy would probably back-
fire in the long run by accelerating
Europe’s shift away from Russian fossil
fuels. “This is likely to be counterpro-
ductive in demonstrating to everybody
why dependence on Russia makes
them vulnerable to coercion of this
the city’s Palace Square on May 9. which marks the Soviet victory over Germany nature,” the official said.Taiwan learns
from conflict
The war in Ukraine will inform
Taiwan’s annual war drills next
month, a leading military officer
has revealed. This year’s Han
Kuang exercises, which are
designed to prepare the island
against possible attack, will
simulate defence strategies based
on Beijing’s recent military
harassments and its own naval
warfare drills.
Major General Lin Wen-huang
said Taiwan’s tactics would also
refer to how Ukraine has managed
to hold off a larger foe.
Fears have grown that Beijing
could mount military attacks on
Taiwan to achieve unification with
the self-governed island. Beijing
has long considered Taiwan, home
to 23 million people, part of
Chinese territory, and President Xi
has vowed that the island will be
brought back under control before- Washington, which has a
pact with Taiwan to supply it with
hardware and technology to deter
any Chinese invasion, has said it
would support Taiwan’s efforts to
build its defensive capabilities.
In a show of support on
Tuesday, the USS Sampson, a
destroyer, sailed through the
Taiwan Strait, drawing stern
condemnation from Beijing.
Japan boosts defences, page 32
Volunteer turns up alive
An Italian volunteer who was
feared killed in fighting against
Russian forces near Mariupol has
been rescued and is recovering in
hospital. Ivan Luca Vavassori, 29, a
former professional footballer, had
been describing his activities in
Ukraine on social media but went
silent on April 18. A message
posted by friends on his Instagram
account said he had been part of a
convoy destroyed by the Russian
army as it tried to evacuate the
wounded from the besieged city.Protesters tear-gassed
Russian forces used tear gas
and stun grenades to disperse a
pro-Ukraine rally in the occupied
city of Kherson, Ukraine’s
prosecutor-general said. Russia
appointed its own mayor of
Kherson on Tuesday after troops
took over the administration
headquarters in the regional
capital. Kherson is strategically
important for Russia as it provides
part of the land link between the
Crimea peninsula and Russian-
backed separatist areas in the east.Italy split on weapons
The Italian government’s united
front on military aid to Ukraine
appeared to be faltering after the
leader of the Five Star party
rejected sending “offensive”
weapons to Kyiv. Giuseppe Conte,
a former prime minister and
leader of the largest party in the
cross-party coalition supporting
Mario Draghi, said military aid to
Ukraine must be tied to the right
to self-defence enshrined in article
51 of the United Nations charter.ukraine in brief
DMITRI LOVETSKY/AP