EU says it will not pay for Russian gas in rubles and does not rule out an embargo

The high representative of the European Union (EU) for Foreign Affairs and Security Policy, Josep Borrell, stated that the gas contracts with Russia they will not be paid in rubles and added that he does not rule out the possibility of reopening the debate on a possible embargo of hydrocarbons.

Also Vice President of the European Commission (EC) took advantage of his visit to Chili -the first stop on his tour of Latin America- to refer to the position of the EU on what he called the last “Russian aggression”.

The European bloc refused to impose an embargo on Russian gas or oil and also ruled out a tax on fuel imports, the senior official explained during a press conference at the inauguration of the new EU embassy in Santiago.

However, the initial rejection “It does not mean that (these sanctions) cannot be reconsidered in view of the events and how they are developing”.

“All member states are united in a solidarity response. What happens to Poland and Bulgaria happens to the EU”wielded Borrell, who defended that “there is capacity to substitute the supply of gas to these countries through other sources”.

The Russian state company Gazprom announced on Wednesday the total interruption of its gas exports to Poland Y Bulgaria for his refusal to pay in rubles, a demand from Moscow that most of the countries of the European bloc reject.

The cut came almost a month after the Russian president, Vladimir Putinimposed that payments for the supply of Russian gas must be made in the currency of that country in order to get foreign currency into Russia.

Payments in euros or dollars

The senior official added that “The contracts will be strictly fulfilled in the terms in which they are foreseen” Y “where it is said that it is paid in euros or dollars, it will be done in euros or dollars”.

“Naturally Russia will do everything possible to try to make these payments in a currency that puts us in difficulty, it is part of the rules of the game”he indicated.

So far, the supply cut is the harshest reaction Russia has taken in retaliation for the measures imposed by West to the freezing of the reserves of the Central Bank of Russia and the disconnection of several Russian banks from the international interbank system Swift.

Russian fuels have a fundamental weight in the productive gear of the EU (27% oil, 46% coal and 40% gas), while for the United States, which prohibited the import of Russian hydrocarbons in March, they are marginal (8% oil and refined products, 5% coal and 0.5% gas in 2021).

Chile-EU Association Agreement

The day before, Borrell met with the Chilean ruler, Gabriel Boricto deal with the negotiations on the modernization of the Association Agreement between the European bloc and Chile, which was signed almost 20 years ago.

“I understand that the new government needs time to study well what the agreement is. I hope that your reconsideration does not mean reopening the negotiations, but rather a better understanding of what the terms are.”assured the high command.

Although the modernization of the agreement was left almost threadbare with the administration of Sebastian Pinera (2018-2022), the new president, Boric, has not yet announced the signing, although he assured that he is “working coordination” between both parties.

“The agreement will be, when it is signed, the most complete and most modern that the EU has with any other country, and it will be a model to follow”he pointed.

The EU is the first foreign investor in Chile and its third commercial partner.

In 2020, trade between the two parties reached a value of 13.4 billion euros, while the EU’s FDI stock in the Latin American country reached 89.9 billion euros in 2019 (more than US$ 90 billion), representing 36% of the total foreign investment in the country.