Putin is demanding gas importers pay Russia in rubles, twisting the West’s sanctions regime against itself:
Russian President Vladimir Putin is attempting to force the world to reengage with the Russian economy. On Wednesday, he ordered that gas contracts with "unfriendly" countries, those sanctioning Russia, be settled in rubles rather than in foreign currencies. Russia's central bank and gas suppliers like Gazprom have one week to implement the change. This is a significant change as about 58% of Gazprom's foreign gas sales were in euros and an additional 39% were in U.S. dollars in the third quarter of 2021. This may be intended as a way to put pressure on European countries, which get roughly 40% of their natural gas from Russia. The European Union has not banned Russian oil and gas, though it pledged to reduce Russian gas imports by two-thirds by the end of the year. Vinicius Romano, senior analyst for Rystad Energy, sees this as an attempt by Putin to prop up the ruble by forcing gas buyers to pay into “the previously free-falling currency.” These payments are a lifeline for the increasingly isolated economy, allowing the ruble’s value to increase to 25% below its value before the invasion of Ukraine up from its 40% crash. This may also be an attempt to work around existing sanctions by forcing the West to work with Russian entities if it wants to maintain its imports of Russian energy. It is currently unclear whether or not this ruse will work in Russia’s favor.
EU signs US gas deal to curb reliance on Russia:
The US and EU have announced a major deal on liquified natural gas. Under this agreement, the US will provide the EU with enough gas this year to equate roughly 10% of what it is currently receiving from Russia. This is part of the bloc’s attempt to cut Russian gas use in response to the country’s invasion of Ukraine. The new deal will involve the US and other countries supplying an extra 15 billion cubic meters of gas on top of last year's 22 billion cubic meters so as to offset the 40% of EU gas currently being supplied by Russia. The total of the US deal will represent around 24% of the gas currently imported from Russia. The targeted 50 billion cubic meters per year will be able to replace roughly one-third of Russian gas currently entering Europe. To fully cut reliance on Russia will also require improvements in energy efficiency and transitioning towards renewable sources of power.
EU institutions agree on stricter rules for internet giants:
In Brussels, negotiators from the EU states and the European Parliament agreed on a law on digital markets which is meant to limit the market power of Internet giants and ensure fair competition. This should offer consumers more freedom of choice between online offers. The Digital Markets Act (DMA) is part of a large digital package presented by the EU Commission in December 2020. The second part, the Digital Services Act (DSA), deals with social aspects such as hate speech and is still being negotiated by Parliament and EU member countries. Currently, the DMA targets certain companies which serve as a gateway to commercial users. This will affect major companies such as Google, Amazon, Facebook and Apple as it forces them to observe certain rules and regulations going forward. A central aspect of the legislation is that gatekeepers are forbidden from threatening their own products preferentially over those of their competition. This should also allow users to delete preinstalled apps more easily. This will also allow consumers to use a service without having to agree to data bundling across all offers from a gatekeeper.