US President Joe Biden has said he will crack down on Russia for its “unjustified and unprovoked” attack on Ukraine.
Biden has warned of “catastrophic” consequences for the power led by Vladimir Putin. The president of the European Commission, Ursula von der Leyen, has also warned of the “hard impact” against the Russian economy, assuring that the measures will hamper economic growth, increase inflation and erode the country’s industrial base.
The most drastic economic measure Russia would face would be the isolation of the SWIFT system. Ukraine has already requested to be left out of this system.
However, at the moment no major measures are being considered regarding energy supply or removing Russia from this banking telecommunications system, since the priority is that the leaders of the Twenty-seven give the go-ahead for an immediate response to Moscow.
But what is SWIFT? Could these measures be taken in the future? SWIFT is a highly secure network that connects thousands of financial institutions around the world, the basis for establishing economic relations between countries.
In that case, its financial and banking system would be isolated. It could not import products from the West, for example, as there would be no way to pay the western supplier.
However, removing Russian entities from SWIFT, as happened with some Iranian entities as a result of the 2012 European sanctions, would mean cutting their financial ties abroad by preventing them from receiving currency or making transfers for their commercial transactions, but at the same time would affect the Europeans, whose banks are highly exposed to the Russian economy.
Nikolai Zhuravlev, vice president of the Upper House of the Russian Parliament, has already warned of this, as reported by the ‘TASS’ media: “If Russia is disconnected from SWIFT, we will not receive foreign currency, but the buyers, the European countries in the first place, they will not receive our goods: oil, gas, metals and other important components”.
Source: Lasexta
Mario Twitchell is an accomplished author and journalist, known for his insightful and thought-provoking writing on a wide range of topics including general and opinion. He currently works as a writer at 247 news agency, where he has established himself as a respected voice in the industry.
