Just hours after Germany dropped its opposition to barring Russia from SWIFT, the West unveiled joint measures expelling some Russian banks from the critical messaging system at the heart of trillions in transactions globally.
In “Russia May Face ‘Full-On Collapse’ Of Financial System,” I expressed some doubt that an announcement was imminent, but noted that “imminent” is a relative term in this context. An official announcement on SWIFT, I said, would likely come next week.
Instead, it came late Saturday evening in the US. It was, in fact, imminent. And in the truest sense of the word.
“We commit to ensuring that selected Russian banks are removed from the SWIFT messaging system,” a statement attributed to the European Commission, France, Germany, Italy, the UK, Canada and the US said. “This will ensure that these banks are disconnected from the international financial system and harm their ability to operate globally.”
They went further. While initial reports seemed to suggest discussions at the White House around potential sanctions on Russia’s central bank were still in the preliminary stages, some measures were adopted immediately. “We commit to imposing restrictive measures that will prevent the Russian Central Bank from deploying its international reserves in ways that undermine the impact of our sanctions.”
The West is now determined to ensure that Moscow’s $630 billion war chest can’t be used to cushion the blow from the hodgepodge of measures adopted over the past two weeks. The West is strangling the Russian economy. And, if the situation continues to deteriorate, one assumes additional measures specifically targeting Russian commodities could be adopted as well. On Saturday, the West pledged to “continue imposing costs on Russia that will further isolate [it] from the international financial system and our economies.” Those measures will be implemented “within days,” the European Commission said.
Depending on how adept the Kremlin is at managing the narrative and suppressing media coverage of the new measures domestically, Russia could start to see bank runs next week.
While the West surely hopes the new steps will be enough to force Vladimir Putin to the negotiating table, it’s possible he’ll chafe at the measures and use them as an excuse for even more aggressive action. In that scenario, and assuming additional sanctions, the ruble could collapse, plunging the Russian economy into an overnight crisis. Moscow would have no life lines. The ongoing conflict rules out assistance from any multilateral institution and besides, they’re all run by the US anyway. Beijing may be willing to work with the Kremlin to prevent a total meltdown, but Chinese officials appear to have run out of patience with the Ukraine war — already.
The same joint statement from Western nations announced the launch of a “transatlantic task force” for the purposes of “ensur[ing] the effective implementation” of all sanctions by “identifying and freezing the assets of sanctioned individuals and companies” as well as targeting “additional” Russian officials and elites close to Putin, including their families.
Meanwhile, the assault on Kyiv continued.
Timely calls, H!
I assume Putin will whip his generals bloody to take Kyiv and kill Zelensky / govt before the clock runs out. Then negotiate from what (he thinks) will be a better position. Rocket everywhere they think Z might be, cut Kyiv’s internet, power, and water, commit reserves, if still can’t get it done, would they use tactical nukes?
I also assume Putin will wave the nuclear card, Xi will push harder for a climb down, Russia power structure will start looking for an internal solution, and, down at the trivial level of things, options dealers will be very very busy.
I’m sure they’re good soldiers, well equipped and well trained, but my mind keeps gravitating back to the relative motivation of the Russian tanker or infantryman vs. the Ukranian soldier or reservist or, hell, the regular guy with a wife and kids to protect.
Granted, with enough time and effort, Russia will win. But if the West can expeditiously layer in these economic measures this week, maybe just maybe the Ukranians can hold out for a draw in this contest and keep their country. Anyway, here’s hoping.
The end game has never been clear as to why Putin decided to play the madman card. I thought this awful mess would embolden Trump in some weird way, but, the way the world is uniting against Putin’s bullying is almost inspiring!
It’s amazing how many countries have sent Ukraine support in the form of serious weapons, including thousands of anti tank units.
The global weapons and painful economic sanctions are also sending China a fairly laser like signal, that won’t be easy to ignore. This type of united effort is what will matter and hopefully this will be a warning shot to all tyrants with massive egos, especially those that are betting in Putin’s success.
“There are “serious concerns” around Russia’s ability to manage the disruptive impact of new sanctions on its economy, public finances and financial system, Moody’s said”
This turnaround for Germany is amazing. Seeing that they are sending weapons and approving the SWIFT withdrawal. Shows true solidarity. Since information is important , I was happy to hear that Elon Musk is giving Ukrainians access to his Syknet, because Russia has started to bring down their broadband.
I have been imagining driving a tank, or walking behind that tank, down a city street lined with 6 to 20 story ex-Soviet apartment blocks. Defenders with antitank missiles, RPGs, rifles, grenades, Molotov cocktails in those blank windows and on those unseen roofs. It seems like a bad deal.
Also remembering the (Second) Battle of Fallujah. 13K US Army and Marines, with heavy armor and abundant air support (drones, helicopters, fighters, gunships, you name it), taking a town (3 km square, normally 300K population) of mostly low/mid-rise structures, from about 3-5K insurgents (well prepared and fanatical, but not as well armed). Took most of a week. Kyiv seems like a much bigger task.
Those soldiers are just doing their job, but for who Putin and a few Russian fat cats. They are not going to break down emotionally when they come off of the ice, but you have to wonder how they and their families are going to feel in coming days and weeks and years. Patriotic? Probably not.
Yes Putin. Already!
now if only the World could offer the heroic Ukranians some air support…they sure as hell deserve that given their resistance…!!!