Germany opposes Russia's cutoff from SWIFT banking over energy access concerns

The European Union on Thursday announced wide-ranging economic sanctions against Russia in response to president Vladimir Putin’s military attack on Ukraine - but didn’t include cutting Russian banks from the international SWIFT payment system, media network RND reports. The sanctions detail restrictions on Russian banks and individuals, as well as sales bans for aircraft and technological equipment for the energy industry to Russia but neither the SWIFT system nor an import ban for Russian gas was included. Banning Russia from the SWIFT system is considered the “nuclear option”, RND writes, saying that both the German and the Italian government feared that it would not only hit the Russian financial sector but also European banks hard.

Germany and other EU countries also use SWIFT to pay for Russian gas. If the EU was to take such a step, “there is a high risk that Germany will no longer be supplied with gas or raw materials”, German finance minister Christian Lindner said on German ARD television. He said that “also in the most critical phases of the cold war” there had been a basic cooperation between the West and the Soviet Union when it came to raw materials. News website POLITICO reported that Austria and the Netherlands were also doubtful as to the impact of the ban. At the same time, German chancellor Olaf Scholz indicated that the EU should keep the SWIFT ban up its sleeves, for a potential third round of sanctions.

The European Union receives 40 percent of its natural gas imports, 25.5 percent of its oil and 49 percent of its hard coal from Russia (2020 data). In Germany, the share of Russian gas on total imports is at 55 percent. Even before the attack on Ukraine, high volatility in gas prices and low gas storage had triggered discussions on how Germany could diversify its energy supply.