EU set to back Russia’s expulsion from SWIFT system

In a phone call on Saturday, Italian Prime Minister Mario Draghi told Ukrainian President Volodymyr Zelenskiy that he fully supports the EU line on sanctions, “including those under SWIFT”, according to a statement. from Draghi’s office. Separately, Lithuanian Prime Minister Ingrida Simonyte said, “From what I hear, there seems to be no strong opposition anymore” to the proposal.

SWIFT, which transmits secure messages to more than 11,000 financial institutions and businesses, is at the heart of the global financial system and failure to access it could cause significant economic damage.

“Nuclear Option”

French Finance Minister Bruno Le Maire told reporters on Friday that France had no reservations about Russia blocking SWIFT, adding that it would be a “financial nuclear option”.

“Now, of course, when you have a financial nuke in your hands, you think long and hard before you use it,” he said.

Although Germany has not ruled out cutting Moscow off from SWIFT, it has previously expressed reservations about the measure and pointed to the serious implications, including the possibility that it could endanger Russian gas supplies. Russian energy giant Gazprom PJSC supplies about a third of all the gas consumed in Europe. There are also fears that Russia will retaliate with harsh countermeasures.

Chancellor Olaf Scholz called a special session of the German parliament on Sunday, where he is to deliver a speech outlining his government’s response to the Russian invasion of Ukraine.

Polish Prime Minister Mateusz Morawiecki, accompanied by Lithuanian President Gitanas Nauseda, will travel to Berlin on Saturday to meet with Scholz and lobby for Russia’s exclusion from SWIFT. Morawiecki’s spokesman, Piotr Muller, told Bloomberg that “the last 24 hours have seen a change of attitude in a number of previously skeptical governments” on the issue.

US plans to block

Hungary also said on Saturday that it would not block any EU sanctions proposals, according to Foreign Minister Peter Szijjarto.

The move comes as the United States seriously considers blocking Russia from SWIFT, with officials discussing the issue with the Federal Reserve, which sits on the messaging system’s watchdog, according to people familiar with the matter. Another person said talks had started with the European Commission, the bloc’s executive authority.

The UK, which was one of the first major Western allies to come out in favor of the measure, has been pushing hard to get others on board, according to people familiar with the matter and documents seen by Bloomberg.

SWIFT – which stands for Society for Worldwide Interbank Financial Telecommunication – is overseen by the National Bank of Belgium and representatives from the central banks of the United States, United Kingdom, EU, Japan, Russia, China and other countries. ‘others. It delivers secure messages to more than 11,000 financial institutions and businesses in more than 200 countries and territories.

“Deep Implications”

The US, several EU member states and the Commission are increasingly trying to allay concerns about the impact a SWIFT bloc would have on the EU’s huge trade ties with Russia and on the energy payments, according to other officials, who asked not to be identified because the interviews are private.

Some of the EU’s top officials also support the measure and believe it must happen quickly because the impact of the sanctions introduced so far will take time to materialize, the people said.

“Given the potentially far-reaching implications of Russia’s separation from SWIFT, this option must of course be presented to the member states as well with an assessment of the exact implications,” the head of economics at SWIFT told reporters in Paris on Friday. EU, Valdis Dombrovskis. “But clearly all options are on the table, including SWIFT.”

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