> This would have allowed them to require payments in Rubles instead of Euros
"allowed" is a funny word - this situation is way past a point where cross-border contracts on either side hold any legal value. How are you going to hold anyone accountable for breach of contract?
ПАО Gazprom (the _actual_ Gazprom; ПАО is a Russian joint-stock company) owns another Russian company (Gazprom Export OOO; OOO is a Russian LLC), which in turn owned Gazprom Germania GmbH (GmbH is a German LLC).
ПАО Gazprom sold gas to Gazprom Export, which in turn sold gas to Gazprom Germania, which in turn sells the gas to the actual European companies.
The change in Russian law which switches the currency to rubles affects the transactions between Gazprom Export OOO and Gazprom Germania GmbH (which were previously both owned by Russia), which made the settlement an "internal" affair of Gazprom for German exports.
(This stuff is fairly well established and you can look at the German & Russian company registers, the legal text of the Russian decree etc. for more detailed information. The next part is less well understood)
Previously this settlement took place through Gazprom Germania sending money from its German account(s) to an account of held in Gazprombank Luxembourg (GPB International S.A., a Luxembourgian Public Limited Company). This account may be a correspondence account for a Gazprombank Russia account owned by Gazprom Export, it's unclear. These funds can be frozen by the EU (and I think are, leading to the Russian claim that they're currently supplying some gas for "free").
With the law change in Russia, this transfer must now happen to a new type of currency account established by Gazprombank Russia (though it's unclear / not publicly known how those are backed, e.g. whether it's also through correspondent accounts at GBP International S.A.) where it is automatically sold and converted into rubles, which are then transferred to Gazprom Export in Russia.
Now an important bit that most people don't seem to get is that none of this affects pricing, it's akin to a change in payment method. The supply contracts between e.g. the European gas purchasers and Gazprom Germania have complicated pricing schemes which are likely tied to one or more currencies (EUR & USD) and Russia is sticking to those pricing agremeents - but insisting on changing how the settlement happens.
What is kind of unclear at the moment is what Gazprom stands to gain from the sale (and subsequent (attempted?) liquidation of Gazprom Germania). There are a handful of theories about this, but in practice we probably won't know for a while.
It's not as if this hasn't happened before. The 'EuroDollar' came about after the invasion of Hungary in 1956. Russia has just invented the 'RuskiEuro', which is how the Bank of Russia will hold Euros for the duration - probably in settlement accounts at the National Clearing Centre in Moscow.
[0]: https://www.luxtimes.lu/en/business-finance/rubles-for-gas-p...
The first known eurodollar account was opened in France for China during the Korean War, in 1949 [1]. The phenomenon is a result of the Marshall Plan, which left lots of physical dollars overseas and thus outside U.S. jurisdiction.
My gut feeling is, that the EU, without any commodities, has a single choice: kick the Russian gas habit immediately, and force Russia to kill their western gas fields. Then pray they collapse in the next few years.
If the EU keeps paying - Russia's new Gazprom central bank controlled RuskiEuro reserves will stabilize its economy and it will rise like a phoenix from the ashes. Even if we kick the gas habit, this might still happen if Putin keeps his thumb on public sentiment enough.
[0]https://www.credit-suisse.com/about-us-news/en/articles/news...
The banking system makes a handsome fee making that particular piece of alchemy happen.
Gory details about how this particular trick is pulled off is here[0] if you're interested.
[0]: https://new-wayland.com/blog/how-russian-gas-is-paid-for/
Honestly, I'm quite surprised how consistently and tough the new government plays the Ukraine crisis.
Currently Russia has no right to sanction us, so anything they do is a further breach of ITO, which further deepens their case.
Diplomacy is important. The good guy has to respect the rules, or at least write them so we pretend that there are rules we adhere to.
The dollar is inflating at the same time the reserve currency status is threatened, and we Americans, via our allies, are appropriating the stuff of foreigners, seizing boats, currency, gold, and property. I think >400B has been seized at this point.
How long until we move from "Russia Bad!" to other groups, and start turning inward onto ourselves, seizing their property because they are politically unpopular?
They can and they do. Enforcing any kind of international agreements in this situation is pure fiction.
> The good guy has to respect the rules
The existence of a bad guy doesn't imply the existence of a good guy.
Venue depends on the contract. ITO only has jurisdiction where countries have submitted to it.
But germans have also murdered a lot of people not abiding by the societies rules, especially east germans back in the day.
https://en.m.wikipedia.org/wiki/List_of_assassinations_by_th...
Imports of Russian gas (in billion cubic meters) as of 2020:
- Germany (42.6)
- Italy (29.2)
- Belarus (18.8)
- Turkey (16.2)
- Nertherlands (15.7)
- Hungary (11.6)
- Kazakhstan (10.2)
- Poland (9.6)
- China (9.2)
- Japan (8.8)
Oh how our East European borders have grown...
This is going to come off as agressive and whatever but I just really wish people like you that don't have any idea what they are talking about would just shut up already and stop polluting the internet with unfounded opinions.
My position is not that Germany has no agency it’s that it traded away it’s much of its agency to appease the Greens.
These opinions come not from American TV but from my relatives.
Freistaat Bayern uber alles!
Sorry about taking over Europe again, hope you are enjoying the EU dictating your countries economic fortunes.
This was a completely fraudulent construct. 100% of the voting rights were sold for the equivalent of 1 Euro to a single person with no serious business background (has dealt with cars and performed as a DJ). This is a company with billions of turnover. And 99.99999% of the ownership was bought back by the the company itself.
When there is no free exchange rate is not very meaningful.
If they had liquidated, those contracts would have been gone and the Gas dealers & utilities would have had to renegotiate new contracts with Gazprom Russia. This would have allowed them to require payments in Rubles instead of Euros.