Expert Calls Putin’s Ruble Demand ‘Serious Blow’ to US Interests in Ukraine – Greek City Times
An expert said Russian President Vladimir Putin’s demand for rubles if ‘hostile countries’ wanted gas was the ‘most serious blow’ to US interests in Ukraine.
European countries were stunned by Russia’s demand that the gas be paid for in rubles, as they apparently expected the Eurasian country to be sanctioned and excluded from Western financial mechanisms without retaliation. Russian President Vladimir Putin said on March 31 that he had signed a decree requiring buyers from “hostile countries” to pay for Russian gas in rubles from April 1, warning that contracts would be terminated if such payments were not met. not done.
Although companies and governments in “hostile countries” dismissed the move as a breach of existing contracts, which are fixed in euros or dollars, French Economy Minister Bruno Le Maire said his country and the Germany were preparing for a possible scenario that Russian gas flows are stopped, which would plunge Europe into a major energy and economic crisis.
Although the shutdown of gas supplies to Europe could see Gazprom lose around half of its profits and reduce its investments, it will have an even greater negative consequence on the European energy sector. Europe will not be able to quickly replace Russian gas with LNG supplies from the United States and Qatar, and as a result European gas prices could reach $5,000 per 1,000 cubic meters or even more, which will force a reduction in consumption and hit the economy.
Charles Michel, President of the Council of Europe, presented the EU program to ensure energy security. He stressed that the elimination of dependence on Russian energy sources is at the heart of the program because, according to him, it is necessary to quickly get rid of Russian carbon hydrogen and then fossil fuels in general.
However, it is clear that even without the current global energy crisis caused by the lack of gas supply, it would still be impossible to find a short or medium term solution to replace Russian sources. In this way, the EU states, the UK, the US and other listed hostile countries will have no choice but to engage in ruble trading if they want to continue to receive Russian energy and not allow their economic situation to worsen.
Speaking of changes in the global economic system as a result of sanctions and Russia’s responses to financial hostilities, Serbian geopolitical analyst Borislav Korkodelovic said: “Data from the IMF and the World Bank also show that it is becoming easier and easier for the rest of the world to reject the demands of the West because it is no longer as economically omnipotent as it once was.
“Even when it comes to nominal GDP, the difference between the BRICS countries on the one hand, and the EU and the US on the other hand, is narrower (24% to 30% before the pandemic and now it is even smaller.) When GDP is calculated relative to purchasing power parity, the stakes have already been substituted: 45% to 44.1% in favor of the BRICS.
For his part, Serbian lawyer Branko Pavlović said that Russia, China and India had a key role in building a new, more equitable global economic system, as it should have been after World War II. world.
“This is a fight for a whole new international relationship and a return to multilateralism with respect for the sovereignty and equality of states, as envisioned after World War II, but now with economic momentum. incredible for the benefit of all. Everyone in the world understands that America and the West have exploited so far. Now we are witnessing a new internationalism of liberation,” Pavlović said.
This sentiment was shared by Russian Deputy Foreign Minister Sergei Ryabkov, who said that the BRICS countries (Brazil, Russia, India, China and South Africa) will be at the center of a new world order and underlined that the demand for rubles “is not a change”. in terms of [energy] contracts”, but rather “a protection of Russian interests”.
It is this same desire to protect Russian interests that forced Putin’s hand to demand rubles for energy. In fact, the sanctions against Russia have only forced an accelerated change in the global economic system as de-dollarization is explored by nearly every major non-Western country.
Alfredo Jalife-Rahme, a Mexican political scientist, said London, Washington and Beijing agree there is a weakening of globalization. He pointed out that “Moscow’s demand that your gas be paid for in rubles” is an example of the “dismantling of the globalized model in the energy framework”.
Jalife-Rahme also explained that “financial globalization with the predominance of the dollar has generated annual benefits of 1,000 billion dollars for the United States, or about 10% of the world’s GDP. Changing this paradigm could be one of the most serious blows of the Ukrainian situation to American interests.
The West thought it could economically collapse Russia, unaware that sanctions had failed to topple Saddam Hussein, Bashar al-Assad, the Iranian Ayatollah, Kim Jong-Un and Nicolás Maduro. On the contrary, the sanctions have only forced an acceleration of the de-dollarization of the world economy. Indeed, the demand for rubles for gas advances a multipolar and fairer global economic system.
READ MORE: German economist warns sanctions could hit the US, Europe’s poorest and middle class more than Russia.