Gentiloni says EU expects Russia to respect energy contracts

CERNOBBIO, Italy (Reuters) -The European Union expects Russia to respect existing energy contracts but is prepared to meet the challenge if it fails to do so, Economic Commissioner Paolo Gentiloni said on Saturday.

Asked about the halt to the Nord Stream 1 gas pipeline, Gentiloni told reporters: "We are not afraid of (President Vladimir) Putin's decisions. We ask them to respect their contracts but if they don't we are ready to react."

Gentiloni was speaking after Russia scrapped a Saturday deadline to resume flows via a major gas supply route to Germany, deepening Europe's difficulties in securing winter fuel.

Gentiloni pointed to high gas storage levels across the EU and plans to cut energy consumption as a sign that the continent was preparing for what will be a tough winter.

Speaking on the sidelines of the Ambrosetti Forum in northern Italy, he said that measures to help consumers with rising bills should be targeted and not involve higher debt levels.

He also said that other nations might join a price cap on Russian oil agreed by Group of Seven (G7) finance ministers on Friday.

"We discussed how to build a broader coalition," he said referring to the G7 call held on Friday.

"I'm sure that countries like Australia and South Korea could be interested in joining this coalition," noting that lower oil prices would benefit countries even if they did not formally sign up to the agreement.

(Reporting by Valentina Za and Elvira PollinaWriting by Keith Weir; Editing by Ros Russell and Emelia Sithole-Matarise)