Russia will cut off natural gas to Finland after the Nordic country refused President Vladimir Putin’s demand to pay in rubles, the Finnish state-owned energy company said Friday. The cutoff, coming the same week that Finland applied for NATO membership, is the latest escalation over European energy amid the war in Ukraine.
Finland is the most recent country to be cut off from an energy supply that is used to generate electricity and power industry. Poland and Bulgaria were cut off late last month but had prepared for the loss of gas or are getting supplies from other countries.
Putin has declared that “unfriendly foreign buyers” open two accounts in state-owned Gazprombank, one to pay in euros and dollars as specified in contracts and another in rubles. Italian energy company Eni said this week that it was “starting procedures” to open a euro and a ruble account.
The European Commission, the European Union’s executive arm, has said that countries making a payment in the currency listed in their contracts and formally signaling that the payment process is concluded is acceptable under EU sanctions. But it says that opening a second account in rubles would breach them.
That’s left countries scrambling to decide what to do next. Finland refused the new payment system, with energy company Gasum saying its supply would be halted Saturday.
CEO Mika Wiljanen called the cutoff “highly regrettable.” However, “provided that there will be no disruptions in the gas transmission network, we will be able to supply all our customers with gas in the coming months,” Wiljanen said.
Natural gas accounted for just 6% of Finland’s total energy consumption in 2020, Finnish broadcaster YLE said. Almost all of it is imported from Russia. That pales in comparison to big customers like Italy and Germany, who get 40% and 35% of their gas from Russia, respectively.
According to Gasum, Russian state-owned energy giant Gazprom said in April that future payments in the supply contract be made in rubles instead of euros.
NATO applications
Earlier this week, Finland and neighbor Sweden formally applied to join the NATO military organization, marking one of the biggest geopolitical ramifications of Russia’s war on Ukraine that could rewrite Europe’s security map.
U.S. President Joe Biden hosted the leaders of the two nations at the White House on Thursday and offered U.S. support for their applications to NATO, which he said would “enhance the security of our alliance.
“I am proud to assure them that they have the full, total, complete backing of the United States of America,” Mr. Biden said.
Russian President Vladimir Putin has demanded that the alliance stop expanding toward Russia’s borders, citing it as a pretext for Russia’s invasion of Ukraine February 24. Since then, public opinion in Finland and Sweden has shifted massively in favor of membership. The two nations were neutral throughout the Cold War, but now cooperate closely with NATO.
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