The EU finalizes the partial disconnection of Russia from the Swift international payment system

The European Union is making good on its threat to impose "enormous sanctions" on Russia if Vladimir Putin gave the order to invade Ukraine.

If at the beginning of the week the entry of Russian politicians and senior officials was vetoed, it is very likely that this Sunday will conclude with the activation of the "financial nuclear weapon", as French Finance Minister Bruno Le Maire called Swift this Friday. .

This Saturday Germany has relented and has accepted the partial disconnection of Russia from the system that connects financial institutions around the world and allows secure money transfers.

Until now it is the toughest sanction imposed on Moscow for the invasion of Ukraine.

The disconnection will not be total, since the payment of hydrocarbons (gas and oil) will continue to be allowed and to be selective when prohibiting access to the payment mechanism,

according to community sources.

The measure has to be ratified at a meeting of EU foreign ministers to be held this Sunday.

Before that there will be contacts of the G-7 in which the decision will also be addressed, other community sources point out.

This decision represents a qualitative leap in the sanctions against the regime of Vladimir Putin.

Already this week two waves of sanctions have been approved by which almost all Russian strategic sectors have been hit: banks, defense and aerospace companies, construction companies, transport companies, airlines... And, even, it has come to personally punish the Russian president and the foreign minister, Sergey Lavrov, by freezing the assets they might have in Europe, something to which the United States joined.

But the step of disconnecting from the Swift system (Society for Worldwide Interbank Financial Telecommunication) had not been taken.

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At noon this Saturday, community sources pointed out that Berlin was the last obstacle to taking this step.

They were along the same lines as what Le Maire said the day before, when he acknowledged that at the Ecofin meeting, the body that brings together the finance ministers of the 27, there were countries that had doubts about whether it was time to tighten this

.

The musings were in Hungary and Italy, countries that have cleared doubts this morning.

And in the early afternoon it was Germany that made a significant change in its position, both in terms of sending weapons to Ukraine and the financial disconnection from Russia.

“We are working urgently to see how to limit the collateral damage of disassociating from Swift in a way that affects the right people.

What we need is a specific and functional restriction on Swift," Foreign Minister Annalena Baerbock and Finance Minister Robert Habeck said in a joint statement.

A few hours earlier, the leader of the opposition, the Christian Democrat Friedrich Merz, asked the tripartite government led by the Social Democrat Olaf Scholz to impose Moscow's access restriction on Swift.

Merz himself changed his mind.

Just a few days ago he advised against applying this measure and warned that the consequences for the German economy would be devastating.

This Saturday he said on his Twitter account that Germany's high dependence on Russian gas supplies "is not a valid argument against the sanctions that are now necessary."

Angela Merkel's successor at the head of the Conservatives assures that despite Swift's exclusion "Russian energy supplies will be able to continue to be paid for in the future."

“We have asked the European Commission and the European Central Bank to analyze the consequences of further cutting the access of Russian institutions to the financial system.

All options are on the table”, explained the final Ecofin statement this Friday, with an obvious reference to Swift, which had already been previously clarified by Le Maire and Commission Vice President Valdis Dombrovskis.

The French minister also suggested that the decision would not take long because the report analyzing the impact would be ready "in hours, not in days, in hours."

What happened with Swift is a clear example of the dilemma that has arisen in the European Union when it comes to reacting with sanctions despite the seriousness and drama of Russia's total invasion of Ukraine.

Many countries in the European Union are highly dependent on Russian gas, although this has dropped in recent months from the usual 40% to 22% in recent weeks, according to Goldman Sachs, and a total cutoff of access to the international transaction system means also put at risk the payment of Russian hydrocarbons.

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