Companies buying Russian natural gas should not have to set up ruble accounts to pay for it, German Finance Minister Christian Lindner said, pushing back against a demand made last month by Russian President Vladimir Putin.

“Contracts are contracts,” Lindner said Wednesday in an interview with Bloomberg Television in Washington. “Contracts are based on dollars and euros and so private-sector companies should pay in dollars or euros.”

Putin’s demand stipulates that European gas buyers open two accounts, one in a foreign currency and one in rubles. Gazprombank would then be responsible for converting the foreign currency into the Russian one and transferring the money to Gazprom PJSC.

The Russian leader has threatened to halt gas supplies to buyers that don’t comply. Such a move could have drastic consequences for European Union economies, which rely on Russia for about 40% of their gas.

Moscow has been pulling in roughly 1 billion euros ($1.1 billion) a day from Europe in energy purchases, which has helped insulate it from the impact of sanctions imposed after it invaded Ukraine at the end of February.

German Chancellor Olaf Scholz’s chief spokesman, Steffen Hebestreit, said earlier Wednesday that the government is still analyzing Putin’s demand. Discussions about the implications are ongoing with EU partners and the European Commission, the bloc’s executive arm, he said at a regular news conference in Berlin.

He declined to comment on a preliminary analysis by Commission lawyers. A person familiar with the matter said last week that the analysis found that payments using the system would hand Russia total control of the process and violate the bloc’s sanctions. Lawyers for the European Council, the institution composed of the leaders of the 27 member states, agreed with the assessment, another person said.

The EU is working on guidance for national authorities and companies. Russia could still provide clarifications or adjustments to its decree that could affect how the EU and firms move forward.

Last week, the Dutch government told energy companies in the Netherlands to reject the new payment terms, citing the EU assessment. Italy will refuse to comply with Putin’s demand if the EU concludes that doing so would breach sanctions, people familiar with the matter said Tuesday.

Lindner told Bloomberg TV that Germany and its allies are also “standing ready for further sanctions on Russia.” He sidestepped a question on whether oil should be included, citing ongoing talks among EU members on a sixth package of measures.

“We strongly support all sanctions which isolate Russia politically and economically,” he said. “We have to consider which sanctions hit Putin’s war chest and which sanctions in the short term hurt us more than him,” he added. “All sanctions which now and for the foreseeable future hurt him more than us and the international community, we are in full support of.”