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Russia's Ban From SWIFT Harms European Interests

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Russia’s Ban From SWIFT Harms European Interests

Monday, February 28, 2022

Lucas Leiroz, researcher in Social Sciences at the Rural Federal University of Rio de Janeiro; geopolitical consultant.


As expected, the West is responding to the Russian operation in Ukraine with sanctions. Alleging violations against the international law, liberal governments are implementing various coercive measures aimed at suffocating Moscow economically, putting pressure on the Russians to withdraw troops from Ukraine. One of the main measures is to ban Russia from the SWIFT system of international payments. Although Washington suggests the measure as a way of “punishing” Russia, in practice, the Europeans themselves are strongly affected by this measure.

Western powers will ban a considerable group of Russian banks from the SWIFT network. This network is an important tool of the international financial system, which works as a kind of “banking social media”, in which several financial institutions from more than 200 countries communicate and exchange information about payments, facilitating transfers around the planet. Considering that Russia is the second biggest user of SWIFT, the West’s objective is to accelerate a process of financial collapse against Russian companies and banks so that the government is pressured to serve NATO’s interests in Kiev.

Obviously, the proposal to ban Russia was presented by the US, which has been defending the measure since Thursday, February 24th. Washington is the most benefited side with this type of measure, as there is an American interest in causing as much financial damage as possible to its geopolitical rivals. The payments between Russians and Americans, which would be canceled with the ban, are a side effect that the American government is willing to take on, considering the bonus of suffocating Moscow.

In the UK, the measure was immediately approved, but this was not the case in the EU. There was strong resistance to the ban in Europe at first. The reason for this is very simple: Europeans trade on a large scale with Russians – and SWIFT facilitates bilateral trade’s practices. However, as the pressure escalated, the European states, one by one, approved the American project. The last country to resist was Germany, which is extremely dependent on the importation of Russian gas for energy supply. Berlin was not pleased with this type of measure, which seems extremely exaggerated, as the negative effects will directly impact Europeans themselves, but, under strong pressure, the German government also authorized the ban during the last weekend.

It is expected that public opinion will strongly condemn the ban in the near future, when its effects start to be noticed. Obviously, the German population would agree to “punish Russia”, as this is what the media says that has to be done. But at the same time, Germans do not want to suffer from cold on winter nights just for such “punishment” to take place. It does not seem logical that European citizens pay for a sanction because of a war in which the EU is not even involved. In practice, the anti-Russian “economic suffocation” will also be an anti-European social suffocation.

Furthermore, Russia itself will be affected on a much smaller scale than Europe. Moscow has technical alternatives to Swift, such as SFPS, a system of communication between banks, which is already used by more than 400 Russian and foreign financial institutions.

There is also a strong partnership between Russia and China, which could expand Russia’s use of CIPS, a Chinese banking network similar to SWIFT. In fact, since 2014, the West has threatened Russia with a possible ban from SWIFT, which has motivated Moscow to seek alternatives to this scenario. In the last eight years, the country has been preparing strongly to deal with a possible ban – and certainly the SFPS and CIPS are able to fill much of the empty space left by SWIFT.

The US government claims banning Russia from SWIFT will be as effective for Western interests as was banning Iran some years ago. For years, Tehran was barred from using SWIFT due to the nuclear issue, which had an extremely negative economic effect on the country. But it is not possible to establish this type of parallel, as Russia has a much stronger financial structure than Iran and is much more prepared to deal with this type of situation.

It is enough to think that the ban on Russia has been a threat made by the US since 2014, which means that this factor was certainly taken into account by the Russian government before authorizing the operation in Ukraine – in other words, Russia took the risk because it knows it is prepared to deal with the consequences.

In the end, the measure will be essentially anti-European – and even more strongly anti-German. Europe has nothing to gain by adhering to plans to punish Russia, but it still insists on obeying all American orders. It is urgent that European states begin to think more sovereignly, prioritizing their own national interests when evaluating American proposals. Otherwise, the entire continent will be impacted by Washington’s anti-Russian plans.

Source: InfoBrics



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