More and more European countries seem willing to partially or completely cut Russia off from the international banking system via the SWIFT network. Germany was initially against, but seems to have partly abandoned its resistance.
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It is seen as the ultimate sanctions weapon: cutting Russia off from the Swift network. This is the network with headquarters in Belgium that allows 11,000 banks in 200 countries to communicate with each other. It ensures that a payment order from one bank can end up on the account of another bank. If you cut off a bank from Swift, it can no longer transfer money to another bank. If you cut an entire country out of Swift, that country can hardly trade with other countries. It was for this reason that a number of countries that do a lot of trade with Russia, such as Germany, Italy, Hungary or Cyprus last few days still opponent were to use the Swift weapon as a sanction against Russia.
That now seems to be changing. Italy, Hungary and Cyprus indicated on Saturday that they were willing to cut Russia completely or partially from Swift. US President Joe Biden also indicated that the use of the Swift weapon could be an option. Germany seemed to resist the longest. In addition to the many German companies that do business with Russia, there is also the fear that Russia will respond by turning off the gas tap. Germany is very dependent on Russian gas. Without Swift, in principle, it is not possible to pay for that gas, although experts do indicate that there are still ways for large companies such as Gazprom to supply gas and still be paid, for example via subsidiaries that are not located in Russia.
‘Oriented and functional’
After a European meeting of finance ministers in Paris on Saturday afternoon, German Foreign Minister Annalena Baerbock and Economics Minister Robert Habeck stated in a joint press release that they favor ‘targeted and functional’ restrictions on the use of Swift. . “We are urgently working on a way to mitigate the collateral damage of Swift’s disconnection in a way that affects the right people.”
The foreign ministers of the EU member states would discuss on Sunday what exactly can and should be done to exclude Russia (partially) from the Swift network.
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