At least two of five European Union countries previously opposed to severing Russia’s connection to the international SWIFT payment system have reversed their decision, leaving just two big countries in opposition. This comes amid Russia’s unabated military onslaught on Ukraine.
Italy has reversed its earlier decision to oppose the measure being considered in Brussels.
Ukrainian Foreign Minister Dmytro Kuleba said Italian Foreign Minister Luigi Di Maio “assured me that Italy will support banning Russia from SWIFT.”
Hungary, one of Russia’s closest allies in the EU and NATO, has opposed the move. Cyprus, a traditional offshore jurisdiction for dirty Russian money is no longer against the measure, and said early Feb. 26 that it will not stand in front of such a decision. Germany is still wavering, as is France.
The Belgium-based SWIFT system, which stands for Society for Worldwide Interbank Financial Telecommunication, is the main secure messaging system that banks use to make rapid and secure cross-border payments. SWIFT processes about $5 trillion worth of payments daily.
Should Russia be cut off, 70 percent of its banking market would be severed. This would affect ordinary Russians who might be vacationing abroad and find that withdrawing money from an ATM terminal restricted.
SWIFT is “the financial nuclear weapon” said French Finance Minister Bruno Le Maire as cited by Reuter’s news agency. “When you have a nuclear weapon in your hands, you think before using it, some member states have reservations, France is not one of them.”
In 2019, then-Russian Prime Minister Dmitry Medvedev said that cutting Moscow off from SWIFT would equate to a “declaration of war.”
However, there is still hesitancy on the part of the remaining EU countries, said Ukraine’s Deputy Prime Minister for the Reintegration of the Temporarily Occupied Territories Iryna Vereshchuk.
The International Monetary Fund said it is willing to support countries affected by the potential cut-off given Russia’s integration in the global finance and economic system.
“If we are in a situation in which there are spillover impacts that require more engagement from the IMF for other countries, of course, we would be there. We still have about $700 billion lending capacity,” IMF managing director Kristalina Georgieva said on Feb. 23.
Another restrictive measure the West has not collectively used to punish or deter Russia’s war mongering is to allow exemptions for energy exports.
