German Chancellor Olaf Scholz refused Russian President Vladimir Putin's request to have Germany pay for Russian fuel deliveries with rubles.

At a Group of Seven (G7) press convention in Brussels on Thursday, Scholz mentioned it is because "there are fastened contracts" that specify the funds have to be made in euros or dollars "and that is what counts," Politico reported.

Putin's request got here doubtless as an try and return some worth to the ruble, which dramatically fell after Russia invaded Ukraine and western nations unleashed a flood of sanctions in opposition to the nation.

In a televised authorities assembly, Putin mentioned he would solely require the funds in rubles for "so-called unfriendly nations," as belief within the euro and the greenback has been "compromised." Following his announcement, the ruble's worth rose, because the European Fee reported that Russia gives about 45 p.c of the European Union's fuel imports.

Germany Rejects Paying for Gas in Rubles
German Chancellor Olaf Scholz rejected Russia's request to pay for fuel deliveries in rubles. Above, Scholz addresses the media throughout a joint assertion on the Chancellery on March 22, 2022, in Berlin, Germany. Photograph by Michele Tantussi/Pool/Getty Pictures

Nevertheless, Scholz mentioned Germany won't heed this requirement, as "there are fastened contracts in all places, which embrace the foreign money by which funds are made." Although the nation has not banned Russian vitality imports outright, it dealt a blow to the Russian financial system in delaying the Nord Stream 2 pipeline.

Scholz has mentioned a direct ban on Russian vitality imports would have a destructive impact on German residents, in accordance with Politico.Germany makes use of Russian fuel to cowl half of its vitality wants, and if the Nord Stream 2 pipeline was accomplished, it might warmth about 26 million German houses.

On the G7 (a political group made up of Germany, america, the UK, Italy, Japan, France and Canada) convention, Scholz mentioned the group will "react with additional sanctions ought to this turn out to be essential," although he didn't specify what sorts of conditions would make extra sanctions essential.

"We conform to maintain sanctions in place for so long as essential and to observe their effectiveness," Scholz mentioned.

Marcel Salikhov, president of the Institute for Vitality and Finance in Moscow, informed NPR that Putin's request for making funds in rubles for vitality was a "symbolic counter-sanction" of western nations.

"It is tough, given the present financial scenario, for Russian authorities to desert gross sales of oil and fuel to the western nations," Salikhov mentioned. "You'll be able to say, 'We don't belief euros or dollars,' however economically it is the identical operation. Cash is cash."

The worth of the ruble plummeted following the implementation of sanctions brought on by the invasion of Ukraine, with Newsweek reporting final month that it value 4,500 rubles to fill a 12-gallon tank of fuel. An economist assessed that Putin has made "Russia like poisonous waste" for overseas buyers.

Newsweek reached out to Russia's Ministry of International Affairs for remark.

Replace 03/24/22, 2:20 p.m. ET: This story was up to date with extra info.

Replace 03/24/22, 1:32 p.m. ET: This story was up to date with extra info.