To help attain financial independence, Europe has reportedly been working on a money transfer system. It would be separate from the prevailing Society for Worldwide Interbank Financial Telecommunication (SWIFT), RT reported.
“That won’t be easy, but we have already started to do that,” German minister of foreign affairs Heiko Maas said at a conference in Germany on Monday (Aug. 27). “We are studying proposals for payment channels and systems, more independent from SWIFT, and for creating a European monetary fund.”
Beyond the money transfer system, Maas unveiled a new foreign policy strategy. “It’s high time to recalibrate the Transatlantic Partnership — rationally, critically, and even self-critically,” Maas reportedly said.
In addition, Maas also wants the new payment channels to be made autonomous from the United States – a “European Monetary Fund.” The idea reportedly has to do with the U.S. recently pulling out of the Iran nuclear deal.
The news comes as SWIFT, as an organization, bills itself as a neutral player in the global economic system. As such, the recent international flare-up over President Donald Trump’s decision to reimpose sanctions on Iran has hit the firm as a fairly direct challenge.
President Trump reactivated the sanctions against Iran in May. Unless the U.S. will grant an exemption, that act means SWIFT will be required to cut off targeted Iranian banks from its network by early November.
Failure to do so leaves the bank open to countermeasures that can be taken against its board members, as well as against the financial firms where they work. Those consequences could include — but are not limited to — asset freezes, U.S. travel bans and restrictions on banks’ abilities to do business in the United States.
The incentive, then, to cut off Iran is there, but things are not so simple, says Nicolas Véron, senior fellow at the Peterson Institute for International Economics. SWIFT, as a cross-border payments lynchpin, set out to resist attempts to “weaponize” its service.