European Union leaders rejected Vladimir Putin’s demand to pay for natural gas in rubles and promised a response to the Russian president’s request, which would effectively sidestep some of the bloc’s toughest sanctions related to Moscow’s invasion of Ukraine. 

“The EU will respond in relation to this latest maneuver by Russia,” Irish Prime Minister Micheal Martin told reporters ahead of a summit meeting in Brussels. “I wouldn’t underestimate the capacity of Germany and the EU more generally with that issue.”

Putin this week ordered the central bank to develop a mechanism to force ruble payments for natural gas from “hostile states,” essentially making European companies directly prop up his currency after it was sent into free-fall by sanctions placed on the Russian economy. The ruble was headed for its strongest close in almost a month against the dollar after the announcement. 

“It’s a contract violation, and contracts will be considered violated if Russia implements this condition,” Italian Prime Minister Mario Draghi said. Andrej Plenkovic, the Croatian premier, said it would be very hard for anyone in Europe to pay in rubles.

Europe gets about 40 per cent of its gas from Russia and is already grappling with fallout from record prices this winter.

“Most agreements and most treaties are absolutely precise about the currency in which the payment has to be done,” German Chancellor Olaf Scholz said at a news conference after chairing talks with G-7 counterparts on Thursday. “And this is how it is today and we will follow the situation and the development.”

Russia needs to stop using “the compromised currencies” in natural-gas transactions in retaliation to the U.S. and European sanctions, Putin said, according to a transcript published on the Kremlin website. “It’s pretty clear that it makes no sense for us to supply our goods to the European Union, to the U.S. and receive payments in dollars, euros, other currencies,” he said.

“I don’t think any one in Europe knows what rubles look like,” Slovenia Prime Minister Janez Jansa said ahead of the meeting. “Nobody will pay in rubles.”