International

Germany Wants New, Non US Global Payments System

Germany’s Minister of Foreign Affairs Heiko Maas has called for the European Union (EU) to create a new payments system, independent in response to the United States pulling out of the Iran nuclear deal. According to Financial Times, Maas wrote in the German daily Handelsblatt that Europe should not allow the U.S. to act “over our heads and at our expense.”

“For that reason it’s essential that we strengthen European autonomy by establishing payment channels that are independent of the U.S., creating a European Monetary Fund and building up an independent SWIFT system,” he wrote.

His word were the “strongest call yet for EU financial and monetary autonomy vis-à-vis U.S.,” said Thorsten Benner, director of the Global Public Policy Institute, a Berlin-based think tank.

In May, President Donald Trump reactivated the U.S. sanctions against Iran, which could impact not only the country’s financial institutions (FIs), but those who want to do business within Iran. For example, SWIFT, an organization that bills itself as a neutral player in the global economic system, will be required to cut off targeted Iranian banks from its network by early November if the sanctions are not lifted before then, or if the U.S. decides not to grant Iran an exception.

The EU has, so far, vowed to stick with the agreement, as well as protect European businesses from any fallout from the United States. However, it seems that EU companies are more interested in maintaining access to the U.S. market than in pursuing any opportunities in Iran. Earlier this week, Total, France’s largest energy company, announced it was cancelling an Iranian gas project over fears of being affected by U.S. measures against Iran’s oil and gas industry.

As a result, Maas called for the creation of a “balanced partnership” with the U.S. so that Europeans can fill the gaps left by the country. Europe must, he said, “form a counterweight when the U.S. crosses red lines.”

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