Germany is willing to back a European embargo on Russian oil imports and will not be "blackmailed" into paying for natural gas in rubles by Moscow.
Finance Minister Christian Lindner told CNN's Julia Chatterley on Monday that any further penalties against Russia will be agreed upon by Germany's European Union allies.He stated, "Germany is prepared for new restrictions, including an oil embargo."
As part of a fifth round of sanctions imposed on Russia for its invasion of Ukraine, the European Union has already agreed to phase out Russian coal imports.
Despite weeks of talks, the union has had a much more difficult time agreeing to join a US-led embargo on Russian oil. According to Reuters, Hungary repeated its opposition to an oil embargo on Monday.
Lindner refused to speculate on whether any EU member states, such as Hungary, would have to be exempted from an oil embargo.
"I can guarantee you that Germany is prepared to reduce oil imports, and we know that others are thinking about it," he continued.
Russia accounted for roughly 27% of EU oil imports last year. It also provided over 40% of Europe's natural gas. EU leaders have already pledged to cut Russian gas imports by 66% this year, and to reduce the bloc's reliance on Russian gas entirely by 2027.
"We've made preparations to be less reliant on Russian energy supplies," stated Lindner. "We can minimize imports, starting with coal and then moving on to oil." It will take longer time to become independent of Russian natural gas imports, but we will persevere until we are entirely self-sufficient."
Last week, Moscow escalated a tense energy confrontation with Europe by cutting off natural gas shipments to Poland and Bulgaria. President Vladimir Putin's proposal that customers in "unfriendly" nations register two accounts at Gazprombank, one in euros and the other in rubles, from which payments for gas would be made, was rejected by both countries, according to state gas giant Gazprom.The great majority of Gazprom's European customer contracts call for payment in euros or dollars. The Kremlin's ultimatum on ruble payments is widely interpreted as an attempt to support the Russian currency while also bolstering the Kremlin's war chest.Uniper, a German gas distributor, stated last week that it will continue to pay for Russian gas in euros, but that a "payment conversion compatible with sanctions law" would be conceivable. It stated that it was closely reviewing the issue with the German authorities.
Lindner predicted that Germany's utilities would stick to the provisions of their contracts, which provide for payment in euros or dollars.
"Germany cannot be blackmailed; we are well aware of the country's reliance on Russian natural gas, which is a fact. We'll need some time to get out of this rut "According to CNN, he said "This is the contract scenario, and we are not going to change it because Putin needs rubles to fund his war chest."
Germany has cut its Russian gas use to 35% of imports, down from 55% before the Ukraine conflict, but says it needs to keep importing from Moscow until next year to prevent a deep recession.
In the medium term, Uniper says it will be unable to function without Russian gas.
It warned in a statement that this would have "dramatic ramifications" for the economy.
Last week, Germany's central bank warned that a sudden halt would plunge the country's economy into a catastrophic slump. According to a study conducted by five of the country's leading economic institutes, some 550,000 jobs and 6.5 percent of annual economic production could be lost this year and next.
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