Germany softens stance on curbing Russian access to SWIFT

Germany softens stance on curbing Russian access to SWIFT(reuters.com)

60 points by dmk 4 years ago | 19 comments

mngnt 4 years ago |

> joining other Western powers in support of harsher sanctions

They "soften" in their "don't cut Rusia from SWIFT" stance.

In other words, Germany is coming closer to harder sanctions.

sschueller 4 years ago | |

Isn't this worse for the US than for Germany? Isn't it in the interest of the USD to keep swift as the primary method for moving money and not let any other system rise?

ineedasername 4 years ago | | |

It only hurts the US if this action leads to the rise of an alternative.

But SWIFT is pretty deeply entrenched in the industry and having other standards compete is a recipe for chaos. Russia's system that they been building since similar threats in 2014 may soften the blow for them, and allow them to continue to function albeit with a lot more difficulty.

BUT: this entire situation with the Ukraine is made possible-- in part-- because Europe has ceded much influence and control over their energy sector to Russian supplies. Europe is restricted in what they can sanction lest Russia retaliate against their energy supply.

Because of this, I very much doubt that many European countries would further tie themselves to Russia with a new Russian-backrd protocol. If anything I think this situation will Europe step back a bit from that relationship. They'd be wise to build out more extensive energy supply infrastructure from Canada and/or the US so that they are diversified against risk of geopolitical conflict. And if course at the same time significantly ramp up home-grown renewable resources to that dependence on any other major foreign powers is kept to a minimum.

detaro 4 years ago | | |

I don't think SWIFT is bound to USD, since it's mostly messaging?

kettleballroll 4 years ago | | |

As far as I understood, the first order effect is that excluding Russia from swift disables the usual way for Germany to pay for Russian gas and oil, which means that unless they physically move a truckload of euros to Moscow (and get Moscow to agree to that) they are cutting themselves off from one of their major energy supplier. Plus Russia is a big trade partner, but any outstanding bills will then likely go unpaid, and most likely a lot of contracts will be voided.

shmobot 4 years ago | | |

In Russia they've been preparing for this and were slowly moving to use their inside systems at least for the transactions inside the country. As well as they've been preparing for the moment their internet infrastructure might be cut off from the rest of the world (Cheburnet). It's only delaying the inevitable, Russia was clearly heading for isolating itself from the influence of the west.

firstSpeaker 4 years ago |

Cutting Russia from SWIFT is not like cutting Iran off. Russia is way richer with far more reach and cutting more and more countries off of the network will give more and chance for one of the alternatives to grow.

aaomidi 4 years ago | |

Cutting Iran from SWIFT has also just created pressure on Iran to not rely on foreign economies too much. And you can see this by how they've essentially become immune to more sanctions, or global economic termoil.

Honestly cutting Russia off of SWIFT is going to create a much more dangerous Russia in the next few decades.

shmobot 4 years ago | | |

Yes, it's an age-old dilemma, to try to soften the aggressor or to stand up to him. Delaying the confrontation hoping something will change for the best vs standing the ground and fighting back. Some lessons from the not that recent history might suggest that choosing the former might lead to quite a disaster.

yabatopia 4 years ago | |

> Russia is way richer

I was surprised to learn that the GDP of Russia is barely higher than the combined GDP of Luxembourg, Belgium an the Netherlands, three relatively small EU countries. Russia is a big country, has a large population, a populous army, but is relatively poor. War is expensive.

aaomidi 4 years ago | | |

Measuring GDP as richness isn't really useful. Russia doesn't operate a war on USD or EUR. This is like comparing income without taking into account cost of living.

GDP is not a good measure of richness of a country in relation to how it will handle itself in a war.

sydthrowaway 4 years ago | |

This.

This is another huge mistake from the Western liberal order that keeps fumbling the ball.

Relying on Russian gas for energy security was the first.

What are the root causes if these disastrous decisions? How did the East get smarter, more Machiavellian than us? They were in the trash can 20 years ago. Perhaps getting fat and rich rather than fighting for every penny.. we are missing street smarts, and end up with Justin Trudeau

happytoexplain 4 years ago | | |

Many people (most?) consider "Machiavellian" to be an insult - essentially synonymous to "smart but immoral". Part of the West's ideology, for better or worse, is the idealistic belief that smartness and simple prudence/shrewdness can be separated from the negative aspects of Machiavellianism.

Gatsky 4 years ago | | |

What would you do now instead?

aaaaaaaaata 4 years ago | |

...like...Bitcoin?