The West’s Financial System Faces Existential Problems
By M Dowling
Russia demanded last week that the EU pay for gas in rubles. Putin announced that Russia will demand “unfriendly” countries pay for natural gas only in Russian currency. He instructed the central bank to work out a procedure for buyers to acquire rubles in Russia.
The demand sent high gas prices soaring.
THE G7 REJECTS BUT NATO IS SANCTIONING THE RUBLE
The Group of Seven major economies agreed Monday to reject Moscow’s demand to pay for Russian natural gas exports in rubles, the AP reports.
The G7 includes France, Germany, Italy, Japan, the United States, the United Kingdom, and Canada.
“Payment in the ruble is not acceptable, and we will urge the companies affected not to follow (Russian President Vladimir) Putin’s demand,” German Energy Minister Robert Habeck said. Note the word “urged”.
If they agree to pay in rubles, strengthening the Russian currency, they will also damage the West’s financial system, perhaps irreparably. Along with it, they lose their dreams of globalization.
THEY’RE RELYING ON CONTRACTS
German Chancellor Olaf Scholz said, “the contracts we know lay down the euro as a payment currency and the companies will pay according to the contracts they have signed.”
At the same time, NATO (30 countries) is demanding that Russia be blocked from accepting payments in euros and dollars. NATO includes the G7 nations except for Japan.
Something has to give here. Russia won’t feel they have to stick with their contracts.
IT HURTS THE WEST’S ECONOMY AND THE GREAT RESET
Is it possible that the G7 energy ministers finally accept that trading in rubles will structurally undermine the G7 unilateral hold on global finance and energy policy? What happens to their Great Reset then? Perhaps they will cave on those particular sanctions.
Forcing Russia to not trade in euros and dollars weakens SWIFT and their financial hold on the world market. It will also weaken the West’s glorious dreams of a Great Reset globally.
As it is, the West is losing India, China, possibly Saudi Arabia, the UAE, and others, at least temporarily, to the ruble and the new Asian replacement for SWIFT.
This could well be permanent and the Western SWIFT system could find itself a lot poorer and a lot less global.
The EU can’t have it both ways. Russia can now turn off the tap as Donald Trump warned when he tried to kill Nord Stream. The EU relies on Russia for 40% of its gas needs.