War in Ukraine | Germany agrees to partially exclude Russia from Swift

(Berlin) Back to the wall in the face of criticism, Germany hardened its position on Saturday against Russia by agreeing to deliver weapons to Ukraine at war, and to partially exclude Moscow from the Swift interbank platform.

The arms decision is a major political reversal for this country, whose official position since the Second World War has been not to deliver “lethal” weapons to conflict zones. There were, however, exceptions that generated controversy.

Berlin has authorized the delivery to Kiev of 1,000 anti-tank rocket launchers, 500 Stinger surface-to-air missiles and nine howitzers, the government announced.

“The Russian aggression against Ukraine marks a change of era, it threatens the order established since the post-war period”, justified Chancellor Olaf Scholz in a press release.

“In this situation it is our duty to help Ukraine as much as we can to defend itself against Vladimir Putin’s invading army.”

Concretely, these deliveries of rocket launchers will be made by the Netherlands, and the howitzers by Estonia. These two countries had originally acquired this equipment from Germany and needed a green light from Berlin to be able to re-export it to Kiev.

The howitzers are old, they once belonged to the army of the former communist East Germany.

Reviews

Berlin is thus responding to the vehement criticism it has been the subject of for several weeks for its refusal to export such weapons, coming both from the Ukrainian authorities but also from EU partners such as the Baltic States or Poland.

Ukrainian President Volodymyr Zelensky reacted by calling on Olaf Scholz to “keep it up” in “the anti-war coalition”.

The restrictive policy followed by the first European economy since the post-war period in terms of arms exports has its source in the horrors of Nazism which gave birth to a pacifism deeply rooted in public opinion.

This position was, however, less and less tenable politically since the outbreak of the invasion of the country by the Russian army.

At the same time, the German government announced the dispatch to Ukraine of 14 armored vehicles as well as 10,000 tonnes of fuel “via Poland”. “Other support measures are currently being studied,” said the government source.

“After Russia’s shameful attack, Ukraine must defend itself,” said Foreign Minister Annalena Baerbock.

Another taboo broken on Saturday: the government began to give in on Swift, after having long refused to consider excluding Moscow from this key cog in global finance, for fear of being penalized in return for its deliveries of gas, oil and Russian coal.

Targeted limitation

Annalena Baerbock and her Economics counterpart, Robert Habeck, said in a joint statement that they were working on “a targeted and functional limitation” of Swift for Russian financial institutions.

“We are working on how to limit the collateral damage of a disconnection from Swift,” they added.

In detail, the idea is to exclude from this electronic platform, through which a very large number of international transactions pass, the Russian banks already targeted by sanctions from the European Union.

The latter represent 70% of the Russian banking market, according to the EU.

On Saturday, before the announcement, Polish Prime Minister Mateusz Morawiecki, visiting Berlin, had described Germany’s attitude towards Swift as “concrete selfishness”.

In the midst of a battle to take control of Kiev, Volodymyr Zelensky also urged Berlin on Saturday to have the “courage” to block Russia’s access to Swift.

Swift allows interbank settlements between institutions around the world and, for example, prevents Germany from having to pay for its Russian gas in cash.

An exclusion is considered an “atomic weapon” in financial matters. Because disconnecting a State from Swift also means preventing its own banks from making transactions with the banks of the punished country.

Several other European countries reluctant on the subject, such as Austria, Italy and Hungary, have also indicated that they are now ready to accept the “sanction” Swift, isolating Berlin.