Russia

Germany triggered the "alarm stage" of its emergency gas plan on Thursday in response to falling Russian supplies but stopped short of allowing utilities to pass on soaring energy costs to customers in Europe's largest economy, Reuters reported. The measure is the latest escalation in a standoff between Europe and Moscow since the Russian invasion of Ukraine that has exposed the bloc's dependence on Russian gas supplies and sparked a frantic search for alternative energy sources.

Russian officials are considering ways to keep the ruble on a tight leash without abandoning inflation targeting as they hunt for tools to tame the currency’s surge after sanctions ended the central bank’s ability to intervene directly, Bloomberg News reported. Rather than removing a commitment to target price growth, officials would need a new mechanism as long as sanctions on the central bank are in place, according to people familiar with the matter.

Google's local subsidiary in Russia filed for bankruptcy because Moscow's measures against the U.S. firm have made it impossible to do business, the firm said Friday, Politico reported. "Google Russia has filed for bankruptcy," a Google spokesperson said in a statement, adding that "the Russian authorities’ seizure of Google Russia’s bank account has made it untenable for our Russia office to function, including employing and paying Russia-based employees, paying suppliers and vendors, and meeting other financial obligations.

Russia promised on Thursday to speed up talks about increased gas sales to China and warned that Europe would pay a hefty price for its oil embargo against Russia, Reuters reported. Deputy Prime Minister Alexander Novak said Europe would pay an extra $400 billion in higher energy prices and could face a shortage of oil products. He did not give a time frame. Russia is heavily reliant on its multi-billion dollar energy exports for its financial health, while more than half the European Union's gas imports come from Russia, leaving the bloc exposed to any supply disruptions.

Sanctions on Russia, offset by a windfall from high-price energy exports, haven’t inflicted enough economic pain so far to hurt Moscow’s war effort or push President Vladimir Putin to the negotiating table, the Wall Street Journal reported. That resilience isn’t expected to last, with many economists predicting a deep recession later this year, a rise in poverty and a long-term degradation of the country’s economic potential.

The German government is preparing to lend billions to rescue a former arm of Gazprom PJSC now under the control of the country’s energy regulator, Bloomberg News reported. A bailout for Gazprom Germania GmbH could come as early as this week, with state-owned bank KfW Group expected to issue a loan in the range of 5 billion euros ($5.2 billion) to 10 billion euros, said the people, who asked not to be identified because the information is private. Talks are still ongoing and plans could change.

The Russian government added 551.4 billion roubles ($9.5 billion) to its emergency reserve fund on Thursday as the Kremlin steps up its stimulus package in a bid to protect the economy from the impact of Western sanctions and its actions in Ukraine, Reuters reported. "The funds will be used in part to implement measures aimed at ensuring the stability of economic development in the conditions of external constraints," the government said in a statement announcing the cash injection.

The U.S. Treasury moved to block U.S. investors from making purchases of Russian debt in secondary markets, an apparent expansion from existing policy that only prohibited purchases of newly issued Russian government debt and some Russian corporate debts, WSJ Pro Bankruptcy reported. In new guidance, the Treasury Department said U.S.

Bondholders are in for a tangled mess of financial, political and legal wrangling if sanctions push Russia to a historic default, Bloomberg News reported. So far, Moscow has been able to navigate the restrictions to service its international debt, but that’s likely to change after the US closed another avenue to creditors, affecting about $100 million in payments due on May 27. The European Union has also sanctioned Russia’s central depository, which said it would suspend euro-denominated transactions.

Russia failed to meet its obligations to creditors when it didn’t make a small interest payment in April, according to an industry body overseeing the derivatives market, a ruling that triggers some $2.2 billion in credit-default swaps, WSJ Pro Bankruptcy reported. Wednesday’s decision marks the first formal recognition within financial markets of a Russian debt default after its invasion of Ukraine caused the U.S. and its allies to impose broad financial sanctions, severing Moscow’s access to foreign bank accounts and global payment systems.