Africa-Press – Gambia. According to a report just circulated by AP, Europe, Canada and the United States just agreed to cut Russia out of the SWIFT banking system. If true, this would be a major step in sanctions against Russia. However what has been left out in such reports is, that this only applies to “selected” Russian banks.
If this was true it would be a half way support, and could mean the same countriess putting such restrictions in place actually fund the Russian war machine out of selfish motivations.
What the small print says is that all Russian banks that were sanctions will now be cut off from the SWIFT payment system. Also added in small prints: If necessary other Russian banks could be added.
With Russia as the fifth strongest trading partner, a complete cut off would mean a meltdown of the Russian economy, but it will have colaterable consequences countries don’t want to face.
Earlier today a commentary published by Max Borowski of the German 24/7 newswire service NTV, explains why Europe and the United States are not agreeing to turn off the SWIFT banking payment system for Russia as part of the implemented sanctions.
Not doing so his comment further explores why this means the United States and Europe are still financing Putin’s war machine- and there is a good selfish reason.Russia’s big banks and oligarchs are now on a US embargo list, but Russia is still in for a lot of money. Russia is likely to have achieved sales of well over several billion US Dollars in the last three days alone, why Ukrainians are dying and fleeing in their country under attack. Fuel worth an estimated more than a billion dollars has gone to western countries, including Germany.
According to the report, income has likely increased since the attack, because raw material prices rose sharply when the war broke out, while the export volume remained the same. This is according to data from gas line operators in Europe.
Due to rising gas prices, Russia saw a 60 percent year-on-year revenue increase in December 2020, thanks to the commodity boom.
Of course, other sectors of the Russian economy may be hit hard, but Russian President Vladimir Putin could easily cope with it, as long as this windfall of money continues. The German government and other governments know this.
After much hesitation, German Foreign Minister Annalena Baerbock and EconomicMinister Robert Habeck have now announced they would agree to specific restrictions on Russia’s connection to the SWIFT payment system. However, they made sure that “collateral damage” in the energy sector in Western Europe is to be avoided.According to the NTV report, there are two arguments for this exception, which is not an exception, but an overturning of the sanctions. The German Federal Government primarily cites the damage to the local economy and consumers. This is a serious argument.
Europe is not prepared for a complete abandonment of Russian oil and Russian gas supplies. Energy prices would rise dramatically, and put a massive strain on companies and citizens.
What it doesn’t mean according to this evaluation is that Germans would have to freeze.In the best-case scenario, a solution could be found before the coming winter as a result of quick, tough sanctions instead of protracting the conflict with ineffective punitive measures.
In the last few days, the US government – apart from the fear of rising prices for domestic consumers – has tried another argument for the energy exemption from the sanctions.
Russia reliably supplies the United States with several hundred thousand barrels of oil per day.If this deal was stopped, the US State Department argued, prices would rise even more. Putin would find buyers on the world market who would be willing to pay these prices and would increase his income even more.
Including the energy sector in the financial sanctions and completely excluding SWIFT Russia from the world market would largely cut it off. Even if China and some other countries continue to buy Russian oil, Russia could not recoup the losses.
The entire financial flows associated with Russian commodity exports could not be adequately processed using cryptocurrencies, Russia’s own payment system, or other payment alternatives.
The crucial question is:If the matter is not worth to the U.S. Canada, UK and the EU, they should at least say so openly and honestly, instead of shouting solidarity with Ukraine, but with only limited risk for their own economiea. A half way approach is not possible, if Russia is bombing Ukraine with only days left to succeed.
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