“Swift is the financial nuclear weapon. All options are on the table, and when you have a financial nuclear weapon at hand, you have to be careful”, warned Bruno Le Maire, French Minister of the Economy and Finance, on the sidelines of the informal meeting of European Finance Ministers in Paris on Friday 25 February.
Following the second package of sanctions adopted on Thursday 24 February by EU heads of state and government in response to Russia’s invasion of Ukraine (see EUROPE 12898/1), the agenda of the informal ministerial meeting was changed to focus on economic and financial sanctions against Russia and their impact on the European economy. The ministers discussed in more detail the concrete implementation of the sanctions adopted during the night.
Gintarė Skaistė, the Lithuanian minister, said on her arrival that it was “very important to stop all money flows from international financial institutions and development banks to Russia and Belarus as well”.
An impact assessment before the final decision
“We want to weaken the core of the Russian political and economic system”, Mr Le Maire said firmly. The idea is to “hit Russian interests for as long as necessary”, blocking the access of certain individuals to their property and assets held in the EU and drying up the financing of Russia, its economy and its debt.
“The sanctions are based around five areas, starting with the financial sector. And actually the sanctions which have already been implemented against Russia cover 70% of the Russian banking market, but also key state-owned enterprises, including in defence.”, underlined the Executive Vice-President of the European Commission, Valdis Dombrovskis.
One of the most binding measures envisaged is the exclusion of the Society for Worldwide Interbank Financial Telecommunication (Swift) which is the most widely used transferring financial information system in the world. This would deprive Russia of foreign financing and also cut off Russian oligarchs’ access to their assets abroad.
The exclusion of Russia from the SWIFT system continues to raise concerns among some Member States. The German minister, Christian Lindner, in particular, has not said, unlike Mr Le Maire, that his country is clearly in favour of such a measure.
“Many countries, including Italy, are concerned about the possibility of continuing to pay for Russian natural gas. If a sanction were to interrupt the payment of gas flows, a country like Italy, which uses Russian gas for 43% of its gas needs, or 15-16% of its overall energy needs, would clearly have a problem if these supplies were immediately interrupted”, said Daniele Franco, the Italian minister.
Given the potential risks of this measure on the European economies that trade most with Russia, the ministers claimed that it was more prudent to assess the impacts of this measure first. The Commission therefore undertook to study the issue and provide an assessment “within the hours to come”, according to Mr Le Maire. If adopted, this measure would be included in a third package of EU sanctions.
In solidarity with Ukraine, the EU is keen to quickly implement sanctions against Vladimir Putin. (Original version in French by Anne Damiani)