Washington. Money as a trump card: In Ukraine’s conflict with Russia, the United States still has a number of options to put Moscow under financial pressure if it goes across the border — from sanctions against the Russian leadership to cutting off the international payment system. Swift.
According to US intelligence, tens of thousands of Russian soldiers were recently stationed on the border with Ukraine. Fears of a planned invasion early next year are growing. The West has not yet hinted at possible military interventions, but the US government has dealt severe financial blows in the event of a Russian advance.
In the words of Secretary of State Anthony Blinken, Russia is threatened with “strong economic measures,” which the United States has so far refrained from. US President Joe Biden said on Friday that the United States had developed the “most comprehensive and significant package of initiatives” that would be “extremely painful” for Russian President Vladimir Putin.
In the past decade, the United States has already imposed a number of sanctions against Russian institutions and persons, many of them in connection with the 2014 annexation of Crimea and support for armed separatists in eastern Ukraine. Other punitive measures were directed against Russian interference in the US election campaign, cyber attacks and human rights abuses.
Previous sanctions include a credit freeze, a ban on doing business with US companies or a ban on entry to the US. However, there is still sharper financial leverage behind, including what is known as the “nuclear option”: exclusion from the international SWIFT payment system. The Belgium-based SWIFT (Society for Worldwide Interbank Financial Telecommunication) system ensures that funds are transferred between thousands of banks around the world.
The hegemony of the dollar secures the influence of the United States
Thanks to the dominance of the dollar, the United States has enormous influence, and it can also count on the support of its Western partners. A few months ago, the European Parliament passed a non-binding resolution to disconnect Russia from the Swift system in the event of an invasion of Ukraine.
In the nuclear dispute with Iran, the United States has already demonstrated the power of such a move. After Washington made SWIFT to hold Iranian banks, Iran lost nearly half of its oil export earnings and a third of its foreign trade, said Maria Shagina, an expert on sanctions and energy policy and an employee at the Carnegie Moscow think tank.
According to the researcher, the effects on the Russian economy would be “reciprocally devastating”. Russia depends on more than a third of its national income from its oil and gas exports and is dependent on the SWIFT system.
But since 2014, Moscow has been weaponizing its internal financial system for possible exclusion. Russia’s performance will also indirectly affect economies in the West. So the SWIFT option would only be a last resort, says John Herbst, the former US ambassador to Ukraine.
Other possible steps before that are financial sanctions against people in Putin’s region and more punitive measures against Russian banks and the country’s energy sector, according to Herbst listings. But: “SWIFT is not off the table,” he asserts. AP smv