Daily Management Review

Germany: Europe will create its own SWIFT


08/27/2018


Europe is creating an independent payment systems and "systems more independent from SWIFT," said Foreign Minister of Germany Heiko Maas, opening a conference of ambassadors in the Foreign Ministry in Berlin.



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pixabay
"Washington's sanctions policy forces us to seek a European response. Sudden adoption of unspecific sanctions against Russia, China and other trading partners in the US is significantly affecting Europe and Germany," said Maas.

The Minister noted that the EU is working on the development of institutions independent of the US, in particular the European Monetary Fund, as well as creation of a payment system that would allow maintaining business relations with Iran.

Simultaneously, Maas stressed that the US is the "closest partner" of the EU. "We want this to remain so," the minister added.

"The election of Donald Trump showed that we do not know America as much as we thought," the German minister said. Maas stressed that Europe "needs a new, balanced partnership with the United States".

"By strengthening the European direction of the transatlantic partnership, we create conditions for the EU and the US to rely on each other," he said.

A week earlier, Heiko Maas questioned feasibility of maintaining the US monopoly on the global payment infrastructure, and called for the creation of a new payment system independent of America that would allow Brussels not to look back to Washington for international financial transactions and, thus, to save the nuclear deal between Iran and the West.

"Europe should not allow the US to act regardless of us and harm us, which is why it is important to strengthen European autonomy by creating independent payment channels from the US, including the European Monetary Fund and an independent SWIFT system," the German newspaper Handelsblatt reported on August 21.

According to Head of the German foreign policy department, it is vitally important for Europe to preserve the Iranian deal.

"The existing agreement is much better than the explosive crisis threatening the entire Middle East," he said.

Belgium-based global payment network SWIFT allows global financial institutions to send and receive information on financial transactions. The system’s management claims that SWIFT is politically neutral and independent, although earlier it was used to block transactions and ensure compliance with US sanctions against various countries, primarily Iran.

In 2012, the Danish newspaper Berlingske claimed that the US authorities managed to seize the money transferred by a Danish businessman to a German bank for a party of Cuban cigars. The deal was made in dollars, which allowed Washington to block it.

According to Director of the Berlin-based Institute for Global Public Policy Thorsten Benner, the statement of Maas was "the most powerful appeal for the EU’s financial and monetary independence from the US."

The German Foreign Minister's article points to the scale of the dilemma that European politicians are facing, while they are struggling to keep a deal with Iran and overcome the consequences of sanctions imposed by Trump against companies doing business with Tehran.

Maas also called for a "balanced partnership" with the United States, in which Europeans will occupy those "positions that the States leave." Europe should, in his words, "form a counterweight when the US crosses the red lines."

In the spring, the EU promised to protect European business from the punitive measures taken by Washington, but this could not convince European companies that are more concerned about maintaining access to the profitable US market than the modest capabilities of Iran.

In July, Washington officially rejected the call of the EU leadership to release key sectors (finance, energy and health) from US sanctions. 

source: handelsblatt.com






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