Describing as “unjustified and unacceptable” the decision by Russian gas giant Gazprom to suspend gas deliveries to Poland and Bulgaria because of their refusal to pay in roubles (the Russian currency), the President of the European Commission, Ursula von der Leyen, said, on Wednesday 27 April, that she was working closely with the Member States to develop a European response.
“It comes as no surprise that the Kremlin uses fossil fuels to try to blackmail us (...) Our response will be immediate, united and coordinated”, Ms von der Leyen said.
She then announced that a meeting of the ‘Gas Coordination Group’ - a body chaired by the Commission and composed of Member States’ representatives and others - had already taken place today, while welcoming the willingness of the French Presidency of the EU Council to convene an extraordinary meeting of the Member States’ Energy Ministers on Monday 2 May.
The President also expressed confidence in the EU’s ability to deal with this “new provocation from the Kremlin”.
In her opinion, the EU is in fact prepared for this scenario thanks to its increased contacts with alternative gas suppliers in recent months, including the US (see EUROPE 12919/2), and its measures to ensure “the best possible storage levels” (see EUROPE 12917/7).
“Member States have put in place contingency plans for just such a scenario and we worked with them in coordination and solidarity”, said Ms von der Leyen.
No short-term risks for Bulgaria and Poland
The Bulgarian and Polish authorities were also reassuring.
“Bulgaria’s gas supply is guaranteed for at least another month”, the Bulgarian Energy Minister, Alexandar Nikolov, told an extraordinary press conference.
While he did not rule out problems after this period, the minister stressed that the heating season was over. Sofia is also planning more gas deliveries from Azerbaijan and will continue discussions with the Commission on joint gas purchases, he said.
“Poland has the necessary gas reserves and sources of supply that protect our security (...) There will be no shortage of gas in Polish homes”, said Anna Moskwa, the Polish Minister for Climate and Environment, during a press conference on 26 April.
For Georg Zachmann, an energy specialist at the Bruegel think tank, Gazprom’s announcement does not represent a real short-term threat to the energy security of these two countries.
“Poland’s contract (with Gazprom) is for 10 bcm per year, or 50% of its gas consumption. The country can cope with this thanks to liquefied natural gas, stocks, which are 76% full, and the opening of the Baltic Pipe (which will allow gas to be transported from Norway to the Danish and Polish markets) at the end of the year”, he explained to EUROPE.
The contract with Bulgaria is for 3 bcm per year and represents 90% of its gas consumption. However, “as gas is predominantly used for heating (60% of heating and only 5% of power), this is not a short-term issue”, says Mr Zachmann.
In his view, Bulgaria could face problems next winter. However, he said that the country “can get gas from Romania and will soon start importing 1 bcm per year from Azerbaijan via a new interconnector linking it with Greece” which should allow it to replenish its gas reserves, “85% empty now”.
Prior to Gazprom’s announcement, both countries had already stated that they did not want to renew their contracts with the Russian company at the end of 2022, Mr Zachmann said, proving that “both countries were planning to live without Gazprom contracts anyway”.
New test for EU unity
For his colleague Simone Tagliapietra, the greatest risk at the moment is not that of a blackout in some Member States, but rather that of a fragmentation of the EU regarding the response to the Kremlin’s demand to pay for Russian gas deliveries in roubles.
While other EU countries “might follow the same fate of Poland and Bulgaria” if they persist in refusing to pay in roubles, the key question is whether all member states will follow the Commission’s indications to pay in euros or dollars as foreseen in the contracts, Mr Tagliapietra stressed.
Hungary, for example, has already expressed its willingness to pay in roubles.
Ten European companies have already opened accounts with Gazprombank to comply with the Kremlin’s request, according to information published by Bloomberg.
Asked by a journalist about this, Ursula von der Leyen said that any payment in roubles for gas deliveries would be “a breach” of EU sanctions against Russia, “if this is not foreseen in the contract”.
She added: “We have about 97% of all contracts that explicitly stipulate payments in euros or dollars (...) Companies with such contracts should not accede to the Russian demand, this would be a breach of the sanctions, so a high risk for the companies”.
The President also welcomed the supply of gas to Poland and Bulgaria from neighbouring EU Member States as a sign of the “immense solidarity among us”.
For her, this shows that the Kremlin “has failed once again in this attempt to sow division between Europeans”.
“We will remain united and support each other while phasing out Russian energy imports”, said European Council President Charles Michel on Twitter. (Original version in French by Damien Genicot)