Thu, 08 Jun 2023

Suspending Russia from the banking network would be an atomic bomb for capital markets

Cutting Russia off from the international banking payment system SWIFT would have a serious impact on Western economies, according to the incoming leader of Germany's conservative Christian Democratic Union (CDU), Friedrich Merz.

The politician stressed that the suspension of the system for Moscow "would basically break the back of international payment traffic," damaging not only European-Russian trade in goods and services, but global trade as well.

"Calling SWIFT into question could be an atomic bomb for the capital markets and also for goods and services. We should leave SWIFT untouched," Merz said, as quoted by DPA International News Service.

"I would see massive economic setbacks for our own economies if something like that happens. It would hit Russia, but we would be damaging ourselves considerably," he warned.

The remarks come amid repeated threats from the US and its allies to introduce a wide set of punitive measures against Russia if the country's troops invade Ukraine.

The new penalties are aimed at targeting Russian banks and the Russian sovereign wealth fund. They would also make it harder to convert rubles to foreign currencies, as well as seizing opportunities for investors to purchase Russian debt on the secondary market, and potentially disconnecting the country from the SWIFT banking network.

Merz's warnings come ahead of German Foreign Minister Annalena Baerbock's visit to Ukraine and Russia, which is scheduled for Monday and Tuesday.

Washington has repeatedly raised the issue of Russia's intentions in relation to Ukraine over the past several months, while Moscow has denied all allegations of military planning and has vowed to respond in kind in the event of sanctions.

For more stories on economy & finance visit RT's business section


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