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On 2022-04-27, the Russian state-owned energy company Gazprom has ceased gas deliveries to Poland and Bulgaria, after they refused to henceforth pay for the gas in ruble rather than the currency stated in the contract. Other EU countries and customers in those countries have also refused to pay for gas deliveries in ruble. For example, 97% of gas payments in the EU are in euro or dollar. Is there any factual difference that would explain why gas deliveries were stopped to (customers in) Poland and Bulgaria, but not to other EU customers? Or is this purely a political decision based on (semi-)opaque political considerations from the Russian Federation leadership?

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    "Is there any factual difference that would explain ..." What factual difference do you expect? The money is the same and the delivered gas is the same. It cannot be anything else but politics. I personally think it's escalation tactics.
    – Trilarion
    Apr 27 at 9:10
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    @Trilarion Factual difference — maybe the contract is differently formulated, maybe they weren't paying in euro, maybe they're paying in a different way — I don't know.
    – gerrit
    Apr 27 at 11:40
  • Not capable of writing a full answer rn, but might do so tomorrow: both countries are able and willing to forgo Russian gas imports by the end of this year. Putin is simply pre-emptively revoking the existing contracts (using the established pretense of requiring payment in Rubles) to score propaganda points. Apr 28 at 22:01
  • Oh, both countries were also very vocal about increasing sanctions on Russia as well as extending military support for Ukraine. Apr 28 at 22:12
  • @RutherRendommeleigh while true, this can be said of many European countries and I think it would need some more arguments to claim that Poland and Bulgaria are significantly more vocal.
    – Mayou36
    Apr 30 at 12:02

7 Answers 7

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Bulgaria is a good target for a political pressure right now.

(Disclaimer: I am Bulgarian citizen and resident)

The current Bulgarian government is elected by an unstable, complex and heterogeneous coalition with a strong internal tension in regard to the Russia/Ukraine subject.

The current government already gets the political burden of the rising global energy prices and the general inflation.

Political parties with the traditional pro-Russian rhetoric advertise proposed advantages of a position closer to Russia as cheaper gas. Higher energy prices work for them.

Bulgaria gets (on average) like 70% of its natural gas from Russia. It is better now because the weather gets favorable, but to an extent. Options for getting gas from other sources are limited and have been actively sabotaged by the previous governments. The Bulgaria/Greece pipeline interconnector that could bring gas from the liquefied gas terminals in Greece is few weeks from starting operation (if everything goes well).

In short, pressuring Bulgaria right now has the potential to bring a government better for Russia rather quickly.

Edit: A day later, suspictiously quickly organized protests from at least two professional organizations started. They protest against "government actions that provoked Russia to stop the gas and rising gas prices".

The natural gas price in Bulgaria is regulated by a government agency and did not change so far. There is no immediate shortage either.

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    The question is about the difference though. And a similar internal political conflict exists in Germany.
    – wrod
    Apr 27 at 21:20
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    @wrod not true for Germany. Aside from the green party (which has turned away from its peace-movement roots long ago and found that camouflage military colours also include green so that's nice) the current German government is good for Russia. If I were Putin, I wouldn't want the conservative party back in charge. Toppling the German government would not work to Russia's advantage.
    – Tom
    Apr 28 at 2:14
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    @Tom How is the current German government good for Russia? Putin would probably prefer to have, ahem, Gerhard Schröder back.
    – gerrit
    Apr 28 at 7:36
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    @gerrit not good, but better than the alternative (the conservative party, which is more strongly trans-atlantic and USA-aligned).
    – Tom
    Apr 28 at 8:38
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    @gerrit Schröder was SPD, as is Scholz, and they, along with their preferred partner the Left, have the closest ties to Russia. In practice, I see a great deal of reluctance to, say, supply Ukraine with jets and tanks in these two parties compared to all the others (excluding, perhaps, the far-right). Apr 28 at 22:09
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German Minister of economics Robert Habeck today elaborated in a press conference that Germany accepted the two-accounts approach (payments by the customers in Euro/Dollar to one account at Gazprombank, and the bank changes the payment to Rubel and transfers it to a second account, still assigned to the customer), but Poland decided to not accept. He could not confirm the same for Bulgaria. Video from 26:45.

Das ist der Weg, der mit Europa, der mit der Europäischen Kommission so geeint ist...und an den sich die allermeisten europäischen Länder halten. Polen wiederum...sagen, wir fürchten kein Embargo, und wir machen das so, wie wir es wollen. Für mich ist nur wichtig, dass Deutschland nicht in Rubel bezahlt..., und in der Europäischen Gemeinsamkeit reagiert...und das tun wir. Für Bulgarien kann ich das nicht bestätigen, weil ich nicht genau weiß, ob es da andere Probleme mit der Transferierung gegeben hat.

This is the way that has been agreed on by Europe, by the European commission, and that the vast majority of European countries accept. Poland, in contrast, says they do not fear an embargo and will do it their own way. For me it is only important that Germany is not paying in Rubel and maintains the European commonality, and that is what we do. For Bulgaria, I cannot confirm, because I don't know if there have been other problems with the transfer.

At a later point, he also notes that Bulgaria seems to be able to fulfill its needs by importing via Turkey and Greece (using existing LNG port terminals). Poland would be able to profit from a new gas pipeline from Norway to Denmark and Poland, to be opened in autumn. He added that since Norway will not expand its exploitation rate, the gas routed to these two countries would then not be available for German consumers.

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    @Trilarion You are right that it sounds strange, like a "ruse". It might be a face-saving technique: Putin can then claim, domestically, that he won and Europeans caved in. At the same time Europeans can claim that they still pay in Euros, domestically, and claim that Putin caved in. Who is wrong? Well, that depends on the specifics, but to me it sounds like e.g. Germany is still paying the agreed upon amount in Euros and Gazprombank can just buy as many rubles with those Euros as they get. In that case Germany would have won. But if the amount of rubles is fixed then Putin would have won.
    – Nobody
    Apr 27 at 16:35
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    @Trilarion (and in any case, Putin still wins because he is still selling enough gas to finance his war)
    – Nobody
    Apr 27 at 16:35
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    According to german TV news Tagesschau Gazprombank buys Rubel "under direction of the gas customer" at the Moscow stock exchange.
    – ccprog
    Apr 27 at 17:30
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    @Trilarion the "gas for roubles" idea was reworked few times by the Russians, right now it looks like more of an internal conflict between the "gasprom and rosneft" wing and the "police and military" wing of the Russian government. It is like the government wants to deplete Gasprom from their hard currency stream that gives them weight in policy-making
    – fraxinus
    Apr 28 at 7:54
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    @Trilarion "If permanently lower gas usage is a side effect, it would actually be a good one." Sadly, part of it will probably be replaced by coal, and liquefied natural gas from fracking, shipped across the world in large carriers. Europe will surely not become greener in that case. Apr 28 at 18:13
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Bloomberg wrote today about four customers that have paid in rubles for gas and ten companies that have opened accounts in Gazprombank
This may explain the difference, but we will need to wait to find out if the information gets confirmed.

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    Interesting, but could do with more context. How many individual customers does Gazprom have in the EU? 10, 100, 1000?
    – gerrit
    Apr 27 at 13:46
  • It depends on who do you call a customer.
    – fraxinus
    Apr 27 at 19:21
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    This is the correct answer. Russia have stated that due to the sanctions on trading in dollars and euros (meaning they can't effectively exchange the euros or dollars for anything), they've asked for payment in rubles. This is enabled by the fact Gazprombank aren't currently sanctioned (with the exception of the UK), allowing them to effectively do some cup swapping to convert currencies into rubles. Hungary and Slovakia have agreed, Poland has not. Apr 27 at 20:32
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No, there is no obvious difference between Poland/Bulgaria and other EU customers in regard to the payment and the delivered product (they all pay in the same currency and all obtain the same gas).

The only difference is that Poland/Bulgaria are mid-sized customers (larger than say Estonia but smaller than say Germany), and that they get a relatively large fraction of their gas imports from Russia. So the impact might be locally limited but still relatively strong. Still these are probably rather political considerations. As a side note: it might also be a breach of contract.

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    There is a difference. Russian had said early on in the conflict that customers would soon have to pay in rubles. This demand was made more explicit recently. Poland and Bulgaria explicitly refused. Apr 27 at 21:20
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    @DavidHammen Germany for example also explicitly refused and as far as I know Germany is still paying in euros although the whole matter is a bit unclear at the moment.
    – Trilarion
    Apr 27 at 21:58
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    @DavidHammen another difference: Germany buys roughly 10 times as much gas from Russia as Bulgaria and Poland combined (source: visual estimate from the graph at theguardian.com/world/2022/apr/27/…). But the proportion of each country's purchases represented by Russian gas and the availability of alternative sources are more relevant to "benefit" side of Russia's cost/benefit analysis (that is, the effectiveness of the leverage exerted weighed against the lost revenue).
    – phoog
    Apr 28 at 7:45
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Some differences between Poland and Bulgaria and the other EU countries:

  • Both Poland and Bulgaria were once part of the Soviet sphere when they were all members of the Warsaw Pact. Russia may see them as easier targets to push.
  • Poland is not particularly friendly towards Russia because of historical events: the Soviet invasion of eastern Poland in 1939, days after the invasion of western Poland by Nazi Germany; the Katyn Massacre and decades of Soviet occupation.
  • The gas supply contracts for both Poland and Bulgaria are due to expire at the end of the 2022.
  • Both countries refuse to pay for gas in roubles.
  • Gas pipelines for Russian gas to other parts or Europe, particularly Germany, Hungary and Serbia are in Poland and Bulgaria. Serbia and Hungary are friendlier towards Russia. Germany is a major customer of Russian gas and until the invasion of Ukraine was friendlier towards Russia. Also, it would be easy for Russia to accuse Poland and Bulgaria of "stealing" gas the same way it did regarding Ukraine in 2009, that could then "justify" terminating supplies to the rest of Europe.
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According to the Russian media source RBC ("РБК"), the difference between Bulgaria and Poland vs other EU countries is that they were the first countries to refuse to pay for gas in rubles:

Bulgaria and Poland were the first European Union countries that refused to pay for the Russian gas according to the new terms - in rubles. As a result, "Gazprom" [Russian gas monopoly] stopped gas deliveries there.
[...]
On March 23rd, President Putin ordered to change to rubles the payments for Russian gas from unfriendly [sic] countries (the list includes all EU countries, USA, Great Britain and a number of other countries), which introduced sanctions against Russia in response to the start of the special military operation in Ukraine. The new scheme started operating on April 1st.

RBC, "Bulgaria and Poland refused to pay for gas in rubles. What is important to know." April 27, 2022: https://www.rbc.ru/business/27/04/2022/6268f9409a79476544ffd47f

Thus, one can expect that certain other countries that are considered "unfriendly" by the Russians and that refuse to pay in rubles will get similar treatment from Russia.

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If Putin cuts off the gas, he can frame it as a victory. If the receiving country cuts it off, it will be framed as a sanction against Russia.

With that in mind, consider that Bulgaria will soon have a pipeline to supply them with natural gas from alternative sources via Greece, due to be finished in July.

Poland will have a gas pipeline capable of replacing the Russian gas imports ready in October.

So on the one hand Putin needs to cut off their supply before they cut it off for him. On the other hand Poland and Bulgaria are under less pressure to accept unfavourable terms for gas deliveries than other EU countries.

In conclusion, this move makes perfect sense.

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  • Where is this framing important to Putin? If it were just within Russia, couldn't he simply say he cut them off regardless of whether he or the counterparties made the decision, since he has extensive control over what the media may report in Russia?
    – cjs
    Apr 29 at 8:23
  • @cjs Lies are always better when based on facts. Also it's the timing, the first one to do it gets to decide on an advantageous timing.
    – Nobody
    Apr 29 at 19:37

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