Russia should be cut off from SWIFT – Czech president

EU diplomats say the option is not on the table for now

Czech President Milos Zeman criticized Moscow’s military actions in the Donbass region on Thursday, calling for Russia to be cut off from the SWIFT international payment system.

“It is time to reach for much tougher sanctions than those originally planned, by which I mean above all a sanction in the area of the so-called SWIFT,” Zeman, who has in the past promoted warm relations with Moscow, said in a televised speech.

The EU, which is currently working on a new package of sanctions against Russia, is unlikely at this stage to take steps to cut the nation off from the global payment mechanism, sources told Reuters.

The foreign ministers of the Baltic states on Thursday have also called for Russia’s SWIFT access to be halted. Other EU member states did not support the idea, saying it would not only hit Russian banks but would also make it tough for European creditors to get their money back. They also noted that Russia has been developing an alternative payment system.

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“Urgency and consensus is of utmost priority at the moment,” said one unnamed EU diplomat, adding that at this stage there would be no move on SWIFT, because doing so would have such wide-ranging consequences, including in Europe.

Another EU diplomat told Reuters: “I am not aware of an agreement (on SWIFT sanctions) at this point.”

According to data from the Bank of International Settlements (BIS), European lenders hold the lion’s share of the nearly $30 billion in foreign banks’ exposure in Russia.

Russian Finance Minister Anton Siluanov said last week the country would be able to switch to other financial systems if it is cut off from SWIFT. Moscow can withstand any restrictions thanks to its massive gold and foreign exchange reserves, he added.

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