Cutting Russia off from SWIFT a “matter of days” – euro zone central banker
reuters.com
reuters.com
I find a little unfair to punish people to push them in the streets and have them arrested, tortured or "administratively" punished (remember what happen after the Turkey coup in 2016? Military were punished but also many people working in the public sector.)
The alternative to sanctions is a shooting war, it is probably a good idea to put as many steps in between that point and now as we can, who knows, there might be someone with a change of heart high enough up in the Russian ranks that it makes a difference.
(Genuine question to History geeks) Do we have an exemple of mass sanctions on a country that worked? Why are we repeating strategies that do not seem to work?
Theses sanctions seems to be designed to only short term please the people/voters/journalists of the sanctioning countries but are terrible to the sanctioned country/people long term without solving anything.
Among the targets of US sanctions in the last 50 years, contemporary Russia is somewhat unique: it has a relatively large and urbanized middle class, one that's used to the benefits of global trade and cheap European travel. Sanctions that hurt those people seem, on face value, more likely to impact Putin's decision making than e.g. sanctions on North Korean peasant farmers.
Part of the problem here is that we are not the only game in town anymore.
The path we're on is the worst for everyone involved.
Russia is a classic abuser, the only way out from a relationship like that is to walk away regardless of the personal cost.
That's not really the point
>Russia is a classic abuser, the only way out from a relationship like that is to walk away regardless of the personal cost.
How exactly can the Ukraine walk away from Russia? Its impossible. So long as Russia has an army & a willingness to use it every country will have a relationship with them whether they like it or not.
Cancelling SWIFT would be a very clear signal to all people in Russia that their government overstepped a line. Without punlic support from the public an offensive war is way harder to pull off.
Stop spreading misinformation, this is not true.
This is basically the only thing that all russian-speaking media outlets are talking about. Plus, there is nothing preventing one from opening reddit and seeing what the western media has to say.
On the other hand, people in the West seem to be completely (and willingly!) disconnected from the situation in ru-net.
Most news outlets in Russia nowadays aren't even registered as proper media, so they couldn't care less for any "propaganda filters".
The article tries to assert that there is a huge difference between a perception of a "military operation" and a "war", but in Russian "military" and "war" is the same word (the same word root): "военная", "война" -- so everyone is just calling it "war".
As an example, take look at this article (vc is a massively popular news/blogs site): https://vc.ru/finance/371584-glavnoe-v-ekonomike-na-fone-voy... -- use google translate to see what words are used and what people have to say in the comment section.
Plus, consider that Telegram is massively popular in Russia, people just subscribe to whatever they want and read whatever they want, wheteher it's RT, Reuters, or stuff like this: https://t.me/worldprotest or https://t.me/joinchat/AAAAAFcF8lv6w7Y4RfSW5Q or https://t.me/svtvnews or, on the other hand, stuff like this: https://t.me/Doninside
I would actually argue that Russians have much more sources of information available: Russian, Ukraininan, Western, independent. The evident post-truth politics from all sides breeds radical skepticism. The current situation is far from what can be called "a bubble", probably even further from what is happening in the rest of the world.
However that is not a bad thing if they can drain Russian bank?
Based on that other article, SWIFT cutoff will only cost Russia 5% GNP ( https://archive.today/XqZzK )
The far bigger better news to me is France started seizing physical assets like I hoped all the countries would start doing, if we aren't going to put boots on the ground then the "blood" must be from assets even if Russia counters and seizes foreign assets too.
https://www.telegraph.co.uk/world-news/2022/02/26/france-sei...
Russia has huge foreign currency reserves this is the main goal of this sanction it would prevent them from using their reserves to sustain their own economy whilst their own currency collapses.
I believe it is. Nobody is threatening sanctioning Russia's energy sector à la Iran.
There are numerous workarounds. Most involve Russia submitting to China. Given how unpredictable Putin’s become, that’s preferable to them being a regional power.
This is almost expected. The calculation being that Russia is safer as a Chinese vassal than a regional power. Settling via CIPS is also more burdensome and thus expensive than settling via SWIFT.
Russia has been described as “a gas station run by a mafia masquerading as a country that happens to have nuclear weapons”, which isn’t far from the truth.
From the leaked clips of a high ranking German officer saying "Putin just wants respect" before the war. Now seeing a large shift amongst those I follow on twitter in German who were previous anti-action.
Assuming SWIFT access is cut, and then the Natural Gas supplies are turned off is there another escalation back? Assuming the US/EU can rally their resources how do they mount a quick recovery from the loss of natural gas which will certainly be devastating. Even if the Nuclear plants in process of decommissioning are reversed(if possible) I'm not sure how the EU gets through the next six months without a ton of pain.
Sure. We could sanction their oil and gas industry. Like we've done to Iran. There's also a whole world of plausibly deniable black ops stuff we could do to mess with their infrastructure.
Of course not everyone lives in a small apartment facing the sun but still.
Sure, some saber rattling and destabilization, but outright war?
US intelligence was not always credible, so when they presented facts that conveniently benefited American interests (shale gas export), people were sceptic.
That allowed Putin to prepare an invasion in plain sight.
That said, following Russia demand, the US president went national TV and announced that Russia will likely invade Ukraine and the US will not go in.
"well, this isn't really acceptable in terms of respecting settled borders but the reality is that at least a very substantial percentage of the local population does want to be part of Russia so it isn't the worst thing in the world and probably Putin will move troops into areas he de facto controls or slightly expand borders there".
That doesn't make those things ok but it does put in a long list of other conflicts where the on-the-ground reality is complicated.
Many of us also have mixed feelings of at least partial support about other re-arrangements of sovereignty whether that is ethnic separatism within a country with a quasi-federalist state like Spain (i.e. Basque or Catalan) or other cases like South Sudan or even Kosovo where NATO actively carved out an ethnic statelet by helping an organisation that for all its roots of legitimate popular support was at least... organised-crime adjacent.
The speech that Putin gave though was not about border adjustment but about a denial of any kind of Ukrainian nation identity or nationhood. He wasn't saying, "the Russia / Ukraine border should be 10 or 20 km West of where it is" which might be unacceptable to a hardline territorial integrist or to Ukraine but is within the normal bounds of nation state conflict, he was saying "there is no Ukraine at all, it's not a real nation, they have no right to any kind of state" and that crosses many, many lines that are not crossed by taking territory here or there.
Not trying to make taking "taking a province or two" look like acceptable behaviour but I think that it's important to put previous and current EU/NATO positions in the context of the full horror of what he is now proposing to do which is to permanently destroy a nation state. Even the Ukrainian government didn't really believe this was how it was going to go.
It's also business logic 101 to have alternatives.
NATO's reason to exist is literally because of Russian threat.
The reason people like the US dollar is not just because SWIFT exists.
SWIFT is a messaging system.
The actual transfer of funds is performed with correspondent banks, but they won't perform the transfer if the government says that they cannot have accounts opened by banks from other nations, then that's up to that government, not SWIFT.
SWIFT is being used as "shorthand" to mean that Russian banks will be cut off from the world financial environment. They will have to evade those sanctions via, for example, trading with multiple hops through China, if China allows them to.
Regardless, it seems like a small price to pay for solidarity with the Ukrainian people.
Seems like Putin didn't want to piss off Xi by starting a war before/during Xi's "look at how great we are" Olympic Games.
And it'd seem that Putin favors dates like 22.02.2022 for some strange reason.
Russia launched their full-scale invasion of Georgia on 08.08.2008, too.
I am curious why he didn't wait longer. Maybe he chose now to make the crossing of rivers easier. Also, ISTR that when the snow melts the roads there get so muddy they are almost unusable.
If this goes through and BTC price starts spiking, I’d interpret that as a signal that it is happening, which would be a validation for Bitcoin playing a significant role in avoiding banking restrictions.
At the same time, it would hurt Europe more than Russia in the short-term. (But it might be really worth it in long term)
We underestimate Chinese productivity at our own peril.
While we deal with this Ukraine/Russia thing, it would be unwise to not wargame out some 'humor me' scenarios.
"I know the Chinese could never build that much infrastructure in the short term. But 'humor me', what if they can?"
The Chinese government is despicably authoritarian, but unlike Putin, they are not crazy and they are playing it long-term.
They won't condemn Russian invasion too harshly, but they don't want to break energy supply chains from West to help out a not-exactly-friendly state (just an enemy of an enemy).
If you care, you could do that too.
Russia is being threatened with cut-off, not Ukraine.
No. Me neither.
People have mentioned before China’s competing system to SWIFT and this move potentially being to their benefit. You also have the EU and US spinning up their wheels against a boogeyman, which in some ways, has the effect of strengthening and/or testing their relationships.
In other ways, it forces the West into really tough and expensive policy positions, with plenty of opportunity to damage relationships as well.
Perhaps it really is just as simple as they wanted to prevent Ukraine from joining the EU/NATO. Maybe it’s a mixture of all the above.
Blinken mentioned it - and I agree - that I don’t see whatever plan that’s currently underway as intentioned to stop at Ukraine.
Convince the oligarchs they're richer with Putin dead than alive.
That was the time to do something unexpected. Now it’s already been accounted for.
We need to isolate Russia using non-violence. Primarily, refusing to buy their oil and gas.
Remote bricking all iOS devices in Russia would be an offensive escalation because it would directly harm Russian assets.
Barring Russia from SWIFT… does that amount to a refusal to trade with them? That feels appropriately non-violent, but I’m unsure exactly what it would involve.
It's still nonviolent.
This...never existed in a military/geopolitical context? Does Ukraine get to sue Russia for materiel it's blowing up?
Of course. Same with SWIFT cut-off.
Doing it in a way that is not arbitrary would be key. (I don't know how one would do that. There is no precedent for that type of action, and it is not being seriously considered by senior policymakers.)
It would be more deaths in 24h than the entire Ukraine invasion so far.
You can pretend such would be nonviolent, but it's basically a terror attack on civillian medical infrastructure.
There are humans, existing in a complex society. All meaning is negotiated all the time. All the expectations of behaviour from which your confidant hueristic analysis springs are at all times liable to be contradicted. For instance, few would have thought that the "powers that be" would permit massive conventional war in Europe at this late date.
There is no platonic, eternal, divine legal system in which we encode what is and isn't actually war or which escalations are permissible in discrete scenarios.
This would also be helping the Russian government prevent the spread of information outside of their own sources, regarding the conflict.
I believe you’re wrong to think the escalation is inherently a mistake, or never a path out of conflict. It is common wisdom to observe that bullies may only be stopped with escalatory tactics.
So it seems to me that the West must find some way to show a spine and push back, short of open war. The alternative cedes European hegemony, and the fate of those democracies, to Moscow’s cold hands.
The first is to harm the enemy. Cutting Russia off from SWIFT does that. The second is to reduce moral culpability. The idea that we shouldn't let our work, our infrastructure, be used to further aims we find detestable.
The former is an exercise in balancing costs and benefits. In this, the evidence for cutting Russia off is mixed--they will likely develop a vassal relationship with China that offsets the cost enough to let the regime survive. The latter is an exercise in measuring evil and involvement. In this, the evidence is fairly clear.
Adding an automatic off-switch triggered by total withdrawal from all of Ukraine, including Crimea, or Putin's surrender to a NATO member (or evidence of his death) would give the whole thing a sharper edge.
The USSR literally collapsed. Pakistan has danced with a new regime a decade. We're in highly, highly risky territory. But it's not unprecedented.
Ukrainians want all the benefits of EU membership, and they gave up their nuclear weapons on the promise of security from Europe, the US, and Russia.
Putin's "history" is nonsense.
Abetter option would be go ban companies from doing business in Russia.
Bankrupting European and US comapnies that sold to Russia (and now wait for money) wont help.
Also banning fron swoft means that the big companies will still find ways to trade. Trade with them is not forbidden. I can easly see them asking to send money to some third party bank (China, North Korea) who will act as an intermediary.
Why? They're culpable. I'm going to lose money on my investments in Russia. Shame on me.
Same for iphones or cars.
Even if you sell Steam games it might take few days until you receive the money (assuming you dont park it in Russia for tax reasons).
An Iran style ban on sales is much better than this SWIFT blockade.
I’m advocating for placing the Russian central bank on the SDN list. Hell of a lot more than either. We could tolerate rations against the Nazis but can’t stomach a few months of invoices lost?
If I understand correctly, there're already 23 countries with banks that have adopted SPFS, including Switzerland and Germany... so a SWIFT ban will only have a short-term negative effect on their economy and finally would be a big nudge towards building stronger Russian-Chinese ties in the future. Don't know how smart that is long-term, to be honest.
So when Lukasenko dies then Russia will invaide Belarus and kill bunch of people who they don’t like Putin?
Through these years humanity learned to expect perpetual and cold stalemate as an inevitable paradigm between Russia and the West.
Over these generations, humanity has on average become wealthier and more educated and more democratic - all correlates of robust peace between nations.
You’re not the only one surprised. I have little doubt that everyone, even the CIA analysts generating grim predictions before the invasion, was at some level unable to believe something like this was possible in 2022.
We can still hope to prove it was the absurd strategic mistake our intuition had hoped it was.
Why doesn't this scare people to death?
> Why doesn't this scare people to death?
The human hierarchy of fear seems sorted by proximity and tractability, not a rational calculus of risk and probability. Abstract threats, or those percieved unavoidable, might inspire only apathy.
And indeed, what can I possibly do about rumors of Russia considering nuclear war? I've kept Potassium Iodide stocked since 2014, which seemed practical and easy.
Regarding Lukashenko, I have a contrarian theory that Lukashenko actually considers himself justified in rigging elections, authoritarianism, and Putin-alignment because being a Putin patsy dictator is preferable for the Belarusian people over democratic change that would result in the same fate for Belarus as Ukraine is experiencing. (his thoughts, not mine, although a weak case could be made)
Anyway, this should surely be good for Bitcoin, right?
Nobody argues alternatives don't exist. Russia will pivot to China.
But for all our gripes with Beijing, they're a more rational regime than Putin's. (See: North Korea.) Russia being their vassal is better than the nonsense they are today. And China's systems are more expensive than SWIFT, which will reduce Russia's proceeds.
China’s reaction to this crisis has elucidated for me the fact that its government is a complex institution with separate power bases (cf. Putin’s lonely autocracy).
It’s clear that at least some of those nodes earnestly hold the principle of always-sacrosanct sovereignty which is a cornerstone of China’s foreign policy (and of its criticism of the West), and are not pleased with the hypocrisy now inherent in their alliance.
Just saying.....
EU is not afraid of russians or nukes.
Well, to make it simple for you, EU gets a weak Russian military in the future, which is very desirable.
Edit: Oh, I see. I've replied to another 4 day old account. What a coincidence!
All of this taken together makes imposing heavy sanctions on Russia essentially inevitable. They are the only civilized response available, and not doing anything could have fatal consequences far beyond the EU. Governments across the world rightly realized now - unfortunately, too late - that the comparatively weak response to the 2014 annexation of Crimea has emboldened Putin to order a full-scale invasion of Ukraine. They will not repeat this mistake.
Edit: Looks like a consensus has been reached and Russia is about to get excluded from SWIFT.
> In the short term, sanctioning an action in a civilized manner that used to be a casus belli. In the long run, not allowing Russia to further modernize their military and likely preventing a nuclear war by not emboldening Putin to attack Latvia, Estonia, Lithuania, Finland or Poland at some point in the future because of previous inaction.
The EU nomenklatura gets to pat themselves on the back, and that's about it.
How will sanctions prevent Russia from "further moderniz[ing] their military"? They can probably get whatever tech they need from China now, if they were previously getting it from the West.
How will sanctions prevent "a nuclear war by not emboldening Putin to attack Latvia, Estonia, Lithuania, Finland or Poland at some point in the future because of previous inaction"? If Putin attacks another country, there won't be any more sanctions to enact, and these actions have demonstrated a fundamental unwillingness to engage militarily (e.g. Germany wouldn't even send Ukraine even small guns, so instead they promised * 5000 hats*, which they also apparently failed to deliver).
Modernizing a military is extremely expensive and Russia will not be able to afford it. This is crucial, given that Russia is waging aggressive wars within Europe.
IIRC, Russia gets most of its money from selling gas and oil. If Europe won't buy it, China will. I don't think this will really affect what the Russian government can afford.
No, there is doubt about it. There's a lot of bluster about the effectiveness of sanctions, but frankly, I'm skeptical. It sounds like politicians puffing up the actions they're willing to take.
I agree with that. Maybe I should have said that there is no other civilized response available than imposing heavy sanctions. Even a slightly weaker Russian military and some impact on Russian oligarchs may be better than nothing to prevent future misjudgments about the prospects of waging 19th Century territorial wars in the 21 Century.
That's kind of the problem, though. The catalog of "civilized responses" may not be up to the task of responding to these events, and being constrained to them prevents effective responses.
> Even a slightly weaker Russian military and some impact on Russian oligarchs may be better than nothing to prevent future misjudgments about the prospects of waging 19th Century territorial wars in the 21 Century.
Sometimes "better than nothing" rounds down to nothing. You might end up having more "19th Century territorial wars" because you let the war itself.
IMHO, the only thing right now that has a realistic chance of preventing another one of these wars from happening is a military failure by Russia. Right now that depends on the Ukrainian state acting on its own without much support from Europe.
https://www.bloomberg.com/news/articles/2022-02-26/china-dis...
To "impose a sanction" in this context is to apply a costly restriction to yourself, using the negative effect your self-restriction has on other parties to punish those parties, usually hoping that the negative effect is worse for them than it is for you. Any given trade happens because both parties want it; artificially making trade harder makes both parties worse off. The EU does not have to benefit from the intervention at all; they are apparently willing to pay that cost to make trade harder for Russia.