To be disappointed that the EU won't sanction SWIFT

[cheddez]

Just that really. Why the reluctance?

That also doesn't mean i think Putin will say Soz & call troops home though. Not sure why you made that leap.

They don't want to make the situation worse...Russia

-is a big gas and other resource supplier

-has the largest nuke arsenal

-has powerful friends who also have nukes

@Unescorted

Because of the level of western investment in Russia. If they sanction SWIFT how will our rich people get their money out.

Yep

It's just the EU.
Do you want an organisation that will hold endless meetings and work incredibly slowly? The EU is perfect.
Do you want to move quickly? Forget it, its like a sclerotic elephant. Same scenario as the vaccine rollout.

SWIFT oils the capital markets. Cut Russia out of swift and you'll see a direct and immediate (albeit temporary, probably) impact on your pension, savings and investments as individuals, and also on the nation's finances.

It's not that easy undoing a complex web of relationships, as Brexit has shown.

And YY to

That’s the issue with trying to get 27 countries to agree to something

That's why some nice, normal people were sufficiently sceptical of the EU to vote to leave it

We're going to see each EU nation show its true colours over the coming days. Italy seeking to exempt the sale of luxury fashion products to Russia from this round of sanctions, given its history inside the EEA, EC and EU. Well, I guess we know what they mean by "solidarity".

I was reading an article in The Economist earlier and they gave some reasons for the reluctance.

“Start with the impact on Russia. The Kremlin has been bracing itself for the possibility of being cut off from swift since 2014, when America floated the idea as punishment for the invasion of Crimea. Exclusion would trigger capital flight and a run on firms and banks reliant on foreign funding, but coping mechanisms would soon kick in. Russian banks and their foreign partners would use other means of communication. And transactions would migrate en masse to SPFS, a Russian alternative to SWIFT that is not nearly as ubiquitous and sophisticated, but still usable. That would cause some disruption—but not disaster. Over time, investment in SPFS would make the system speedier.” They are basically saying Russia has had time since 2014 to have a back up plan. They expected this.

if they are going to do it surely it's better to do it now before more people die?

No, knee jerk reactions are a very bad idea. We need to consider that a) sadly there are other countries willing to accommodate Russian money, and b) such a significant sanction will be met with even more extreme retribution from Putin.

www.economist.com/the-economist-explains/2022/02/25/why-the-west-is-reluctant-to-deny-russian-banks-access-to-swift

@SmallThingsEverywhere so there's more to lose than gain. What a mess.

thanks for the link

@Chitchatchatter

There are slower, old fashioned ways to transmit payments such as telex that are available. Slower and antiquated systems but still viable. Blocking SWIFT will slow Russia down but not stop them completely, sadly.

Yes sounds like this could be part of it.

And let's not forget, our own government has been more than happy to facilitate Russian money laundering. Their current stance is hypocrisy at its finest.

@LizDoingTheCanCan

if they are going to do it surely it's better to do it now before more people die?

No, knee jerk reactions are a very bad idea. We need to consider that a) sadly there are other countries willing to accommodate Russian money, and b) such a significant sanction will be met with even more extreme retribution from Putin.

Agree with this

It would break the US and Germany to do this. It could bring about more economic chaos than we could tolerate. It might not hurt the UK much (initially) because we're not nearly as invested in Russian interests as our neighbours are. But if our neighbours' economies collapse on account of SWIFT sanctions, you can bet there will be a harsh knock-on effect. That's a card we shouldn't have to play. I think it would be a real bonehead move to sanction SWIFT. I get the ethical reason for doing so, but actually and ultimately, it would end up being quite unethical. Too much collateral damage/widespread economic collapse. Wouldn't be smart.

^^That's why some nice, normal people were sufficiently sceptical of the EU to vote to leave it (the fact that this led to Boris Johnson becoming PM is regrettable). I believe the other EU countries are essentially in Germany's orbit and therefore Scholz's vote will be the key one so hopefully he comes round.
@stuckdownahole It really isn’t as simple as EU bad/Brexit good or vice Versa.

And let's not forget, our own government has been more than happy to facilitate Russian money laundering. Their current stance is hypocrisy at its finest.

I completely agree with this, it's a mess.

To be blunt, cutting Russia off from SWIFT hurls us into a proper world war. It would be catastrophic. It IS the red button.

So much of the debate is about SWIFT sanctions when they would ultimately be more symbolic than anything. It's distracting from sanctions which would be far more effective at having the same outcome (and other sanctions which are needed just as much)

It really isn’t as simple as EU bad/Brexit good or vice Versa.
No, but it's showing that the EU isn't the wonderful organisation that so many have claimed on MN.

@TheVanguardSix but surely us backing down only works if Putin is happy to stop at Ukraine?

Symbolic? SWIFT is how so many countries actually pay for Russian gas! Maybe not us... but them. And they actually matter. Germany gets 65% of its gas from Russia.
Czech Republic, Hungary=100% Russian gas.
I don't think cutting Russia off from SWIFT would be symbolic at all.

@TheVanguardSix

It would break the US and Germany to do this. It could bring about more economic chaos than we could tolerate. It might not hurt the UK much (initially) because we're not nearly as invested in Russian interests as our neighbours are. But if our neighbours' economies collapse on account of SWIFT sanctions, you can bet there will be a harsh knock-on effect. That's a card we shouldn't have to play. I think it would be a real bonehead move to sanction SWIFT. I get the ethical reason for doing so, but actually and ultimately, it would end up being quite unethical. Too much collateral damage/widespread economic collapse. Wouldn't be smart.

That the west has left itself so exposed in this manner just shows how treasonous our "leaders" have been for decades.

[quote cheddez]@SmallThingsEverywhere so there's more to lose than gain. What a mess. [/quote]
Yes sounds like it. The Economist mentions that the second reason is “ The West, and European countries in particular, would face short-term costs. SWIFT disconnected Iranian banks in 2018, but Russia is far bigger. Russia is the EU’s fifth-largest trading partner. It is the source of 35% of Europe’s gas supply and it is home to €310bn ($350bn) of EU assets. Cutting Russia off from SWIFT could make it harder for international buyers to pay for its energy supplies; it could also prompt Russian retaliation.” So yes it would cause major issues with gas supply.

@TheVanguardSix

Symbolic? SWIFT is how so many countries actually pay for Russian gas! Maybe not us... but them. And they actually matter. Germany gets 65% of its gas from Russia. Czech Republic, Hungary=100% Russian gas. I don't think cutting Russia off from SWIFT would be symbolic at all.

It would be far more effective to fully block all Russian banks from the Western financial system - only one bank is currently fully blocked. But close all the corespondent banking relationships etc and that would really hurt. There are ways to make payments without SWIFT - Iran proved they could do it when they were kicked out. You can just use other communication methods. Yes, they're slower and more difficult but SWIFT is a long way from being the most powerful sanction by a long long way.

So if there was no EU, how would countries cooperate to punish Putin. At least they are discussing what to do civilly and logically en masse rather than individual countries taking piecemeal ineffective measures...