Whereas EU leaders are whining that the Russian decision that countries with sanctions against it must pay in rubles for gas deliveries is a “breach of contract,” economist Mauro Bottarelli explains why Russia actually has no choice, writing yesterday in Il Sussidiario.net.
First, by coupling the ruble to gas sales, Putin has evoked the perspective of a commodity-backed currency, a “ruble linked to a strategic commodity and not to a QE plan that creates money from nothing by pushing an electronic button.” The ruble will be sustained by a real demand.
Second, Putin has sent a message of “financial resilience,” i.e., Russia can renounce dependence on foreign currencies.
