AIn response to Russia’s continued attacks in Ukraine, Western allies have decided to exclude Russian banks from the SWIFT international payment system. This was announced by the spokesman for the federal government, Steffen Hebestreit, on Saturday evening in Berlin. The decision was made by the USA, France, Canada, Italy, Great Britain, the EU Commission and Germany.
EU Commission President Ursula von der Leyen said the new sanctions would impose massive costs on Russia. Russia will continue to be isolated from the international financial system and western economies. In addition, the assets of the Russian central bank are to be frozen. Among other things, this could prevent Russia from using its foreign exchange reserves to finance the war against Ukraine.
In addition, the financial possibilities of Russian oligarchs would be curtailed. The measures would have an eroding effect on the Russian economy. Putin has embarked on a path aimed at destroying Ukraine. In fact, he is also destroying the future of his own country.
In the hours before, one country after the other of the opponents of such a radical step had given up their resistance. According to diplomats, Germany, Italy and Hungary in particular, but also Cyprus and Austria, were still skeptical at the special EU summit. With the exception of Germany, these states had changed their position by Saturday afternoon. A short time later, however, there were also signs of a change in Berlin.
Ready to Detonate the “Financial Atomic Bomb”
Federal Foreign Minister Annalena Baerbock and Economics Minister Robert Harbeck (Greens) said on Saturday afternoon that the federal government is now in principle in favor of Russia’s exclusion from SWIFT. Baerbock and Habeck shared, “At the same time, we’re working flat out on how to limit the collateral damage of a Swift disconnect in a way that hits the right people.” What we need is a targeted and functional restriction of SWIFT.”
French finance minister Bruno Le Maire said on the fringes of a finance ministers’ meeting in Paris that his country was ready to detonate the “financial nuclear bomb”. As the last head of government alongside Chancellor Olaf Scholz (SPD), Hungarian Prime Minister Viktor Orbán gave way on Saturday.
The debate was given enormous momentum by Zelenskyj’s speech at the special summit, it was said in Brussels. After that, the mood changed noticeably. The second package of sanctions did not include an exclusion of SWIFT from the outset. However, many Eastern European countries, but also the Netherlands and Belgium, had spoken out in favor of it.
On Friday morning, former EU Council President Donald Tusk, now President of the European People’s Party (EPP), sharply criticized the fact that the summit did not support it: “The only thing that is fake is your sanctions. The governments that blocked tougher decisions – Germany, Italy and Hungary – brought shame on themselves.” Germany, in particular, drew criticism. SWIFT is the new Nord Stream 2, where Germany puts its own interests above everything else, according to EU diplomatic circles.
Excluding Russia from SWIFT will not completely decouple its financial economy from the international financial markets, but transactions will be much more difficult and expensive. However, the step also has serious consequences for the EU. For example, billing for deliveries of gas and coal from Russia, on which the EU and above all Germany depend, is hardly possible without SWIFT. The EU imports around 40 percent of its gas from Russia, Germany just over half.
In addition, the country can no longer easily service its national debt. Baerbock had defended the German resistance with these arguments on Friday. 50 percent of hard coal imports come from Russia. “If we don’t have this coal, the coal-fired power plants in Germany will not be able to continue.” She had also pointed out that payments to civil society in Russia or in the cultural sector would also be affected.
#Sanctions #Ukraine #war #West #bans #Russian #banks #SWIFT