Russian President Vladimir Putin announced Thursday that "unfriendly" countries, including all EU member states, will have to create ruble accounts to pay for Russian gas from Friday, April 1.
"They should open ruble accounts in Russian banks," Putin said in televised remarks.
"Payments from these accounts will be made for gas deliveries as of tomorrow, April 1st," he added, adding that a default would lead to "stopping existing contracts."
"If these payments are not made, we will consider it as default on the part of the buyers, with all the ensuing consequences, nobody is selling us anything for free, and we will not do any charitable work either," he said.
In response, German Chancellor Olaf Scholz said, Thursday, that European countries will continue to pay in euros or dollars according to what was "written in the contracts."
"It is written in the contracts that payments are made in euros and sometimes in dollars," Schulz said during a press conference with his Austrian counterpart Karl Nehammer.
"I said clearly to the Russian president that it will remain that way," and that "companies want to be able to pay in euros and they will," he added.
For his part, French Economy Minister Bruno Le Maire announced in Berlin that France and Germany are "preparing" for the possibility of Russia stopping gas deliveries" due to Moscow's request to pay for it in rubles as of April 1, which the Europeans reject.
"It is possible that a situation will arise tomorrow in which there will be no more Russian gas, in very special circumstances (...) We have to prepare for these scenarios, and we are preparing for them," Le Maire said in a press conference with German Economy Minister Robert Habeck.
Russia supplies about a third of European gas, so energy is the most powerful "weapon" at Putin's disposal as he tries to respond to sweeping Western sanctions over his invasion of Ukraine.
Putin's decision, to impose payments in rubles, led to a recovery in the Russian currency's exchange rates, which fell to historical lows after the invasion on February 24 but have since recovered.
But experts said that this recovery is circumstantial, a long-lasting color because it was brought about by rising interest rates in Russia, and "soon it will fade again."
Western companies and governments have rejected Putin's imposition of the ruble, seeing it as a breach of existing contracts denominated in euros or dollars.
An order, previously signed by Putin, set up a mechanism for buyers to transfer foreign currency to a special account in a Russian bank, which would then send the ruble back to the foreign buyer to pay for the gas.
He said that this shift is aimed at strengthening Russia's sovereignty and that it will abide by its obligations in all contracts.