Welcome to the Euro Intelligence Podcast. I'm Wolfgang Munchau and with me, I'm Zuzana Muncheng and Jack Smith.

Today, we would like to talk about, obviously, Russia and Ukraine. But what interests us in particular this week is the whole sort of ruble euro dollar pricing debate, which is interesting for a number of reasons. In the end, it might not

matter much, because in the end, it might just be a lot of fuss about nothing. But it is a good

story about how Russia can evade sanctions and yet maintain income, dollar and euro income for its gas.

What Putin demands is essentially a way of being able to use the dollars in euros that he's getting.

The German government is saying, you know, we pay him in euros and in dollars,

a few countries are priced in dollars, but we pay mostly in euros.

But he can't use

the euros because all the euro accounts are sanctioned. That is actually not true. We've known that

Russia has been using those euros. The way this works is German company pays Russia in euros,

and this goes to a gas-from account, usually a gasprone bank, a euro account.

And then what Gazprom does, it takes the money, gives it to the Russian Central Bank.

Or it could exchange the euros on the market for ruble.

But that didn't happen.

What they did is they gave the money to the Russian Central Bank, which itself has accounts

at Gasprom banks and other non-sanctioned

banks. And it can then conduct the exchange rate operation. It then has the euros, which then

get credit to an account of a non-sanctioned bank. And Gazprom would then get the rubles, which the

central bank can simply print. So we are basically, we are in a situation

where the money that Europe sends to Russia, which is about 7, 800 million euros a day,

can be used by Russia effectively because of very ordinary banking transactions. Now, Putin is demanding. This is really what puzzle does.

I mean, it's working. If you've seen it working, the rouble has stabilized quite nicely.

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