Putin accused of blackmail in desperate move against Europe

Vladimir Putin appears increasingly desperate and has been accused of blackmail as he plays one of his few remaining cards.

Putin has threatened to halt contracts supplying Europe with a third of its gas unless they are paid in Russian currency after Western sanctions hit the country's economy and currency hard in the wake of its Ukraine invasion.

It's his strongest economic riposte so far in response to the crushing sanctions.

European governments rejected Putin's ultimatum for Friday, with the continent's biggest recipient of Russian gas, Germany, calling it "blackmail".

The energy showdown has huge ramifications for Europe as US officials circle the globe to keep pressure on Putin to stop a five-week invasion that has uprooted a quarter of Ukraine's population.

Europe wants to wean itself off Russian energy but that risks further inflating soaring fuel prices. Russia has a huge revenue source at stake even as it reels from sanctions.

Russia threatens to halt gas contracts

Facing stiff resistance from Ukraine's military, Putin has played one of his biggest cards in the demand on European energy buyers.

"They must open rouble accounts in Russian banks. It is from these accounts that payments will be made for gas delivered starting from tomorrow," he said on Thursday (local time).

"If such payments are not made (in roubles), we will consider this a default on the part of buyers, with all the ensuing consequences ... existing contracts will be stopped."

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In a public address, Putin offered a mechanism for buyers to obtain roubles via a Russian bank.

Western governments say Putin's demand for rouble payments would be a breach of contracts in euros or dollars. Germany and Austria declared "early warnings" on gas supplies, but no EU country has yet signalled it is facing a supply emergency.

with Reuters

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