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G-7 Countries Reject Payments for Russian Gas in Ruble Cash

3 Min Read
G7 summit or meeting concept. taarifa

The Group of Seven industrialized nations have unanimously refused Russian President Vladimir Putin’s demand that natural-gas contracts be paid in rubles.

This rejection was arrived at during a meeting of Energy ministers from the Group of Seven industrialized nations.

The order represents a “one-sided and clear breach of contracts,” German Economy Minister Robert Habeck said Monday after chairing G-7 talks.

“That means that a payment in rubles is not acceptable and we urge the relevant companies not to comply with Putin’s demand.”

The Group of Seven (G7)  is an organisation of the world’s seven largest so-called “advanced” economies, which dominate global trade and the international financial system. Member states consist of Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States.

Russia joined in 1998, creating the G8, but was excluded in 2014 for its takeover of Crimea.

These G7 nations have already imposed on Russia the biggest package of sanctions ever imposed on a large economy.

They have blocked the country from international commerce and the global financial system, and they have frozen the assets of its wealthiest individuals.

The question is whether G7 leaders are prepared to take harsher steps against Russia which would also hurt their own economies.

One key issue is whether to restrict completely the import of Russian oil and gas. The US is banning all Russian oil and gas imports, and the UK is to phase out Russian oil by the end of the year.

However, European nations get a quarter of their oil and 40% of their gas from Russia, and so far the EU has only agreed to reduce its Russian gas imports by two-thirds.

Germany has already suspended progress of the controversial Nord Stream 2 pipeline. It is designed to take gas from the Russian coast near St Petersburg to Lubmin in Germany under the Baltic Sea.

Does the G7 have any power?

It can’t pass any laws because it is made up of separate nations with their own democratic processes.

However, some of its past decisions have had global effects. For example, the G7 played crucial role in setting up a global fund to fight malaria and Aids in 2002.