Economic|The Russian attack
Putin’s ability to finance his military machinery is to be paralyzed, says the president of the European Commission.
European Union and the United States and its allies have agreed to exclude certain Russian banks from the international Swift payment system.
After midnight on Sunday, the countries said they had agreed on new economic sanctions against Russia because of its attack on Ukraine. The actions have been agreed between the EU, the United States, the United Kingdom, Germany, France, Italy and Canada.
“The European Union and its partners are working to cripple [Venäjän presidentti Vladimir] Putin ability to finance its military machinery, ”said the President of the European Commission Ursula von der Leyen when announcing new actions.
Von der Leyen said he would put forward proposals to EU leaders who could ask for changes.
The new sanctions will apply to all banks previously sanctioned by the international community and, if necessary, to other institutions, a German government spokesman said in a statement.
“The intention is to cut these institutions out of international financial flows, which will massively limit their global operations,” the German statement said.
As part of the new measures, the funds of the Central Bank of Russia will also be addressed, which, according to von der Leyen, will be “paralyzed”.
“This makes it impossible for the central bank to liquidate its assets,” von der Leyen said.
The intention is to prevent the Central Bank of Russia from using its foreign exchange reserves to bankrupt the value of the falling ruble, writes the news agency AFP. The bank’s international foreign exchange reserves are estimated to be worth more than $ 600 billion, according to AFP.
“Russia needs to be able to sell those reserves and buy the ruble to support its currency,” an anonymous U.S. official told AFP.
“If it can’t buy the ruble from Western financial institutions,” the ruble will fall further.
Read more: Putin has amassed a huge treasury and plagued his people’s economy – What is the state of the invading Russian economy?
West also intend to prevent wealthy Russians linked to Vladimir Putin’s regime from acquiring so-called golden passports, that is, from buying the citizenships of other countries for themselves or their family members.
A transatlantic working group will be set up to enforce sanctions.
“In addition to the measures we have announced today, we are ready to take further steps to hold Russia accountable for its attack on Ukraine,” the countries conclude. their joint statement.
The possible exclusion of Russia from the Swift payment system has provoked much debate. The Swift lockout has been seen as an effective measure as the system is very central to banks and financial institutions.
President of Ukraine Volodymyr Zelenskyi has called on the EU to exclude Russia from the Swift regime. However, Germany, Italy, Hungary and Cyprus have been reluctant to close the Swift in the past.
In the measures now announced, the Swift lockout is limited to certain banks.
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