German foreign minister calls for an international payments network that is independent of the US
Germany chancellor Angela Merkel today stopped short of backing her foreign minister's call for Europe to create an international payments network separate from US involvement in a bid to save the west's nuclear deal with Iran.
Saying that Europe and the US have “drifted apart for years”, Heiko Maas described it as "essential" that Europe establish a European Monetary Fund and an independent Swift system, the international network that enables cross-border transactions.
His comments in German publication Handelsblatt yesterday came as Europe attempts to maintain the Iran nuclear deal, averting what Maas described as a “highly explosive crisis” as US sanctions affect EU firms doing business with the country.
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In return for a lifting of international sanctions, Iran has committed to restrict its nuclear weapons development. However, the US withdrew from the deal in May after Trump described it as an “embarrassment”, re-imposing its deterrents and introducing fresh ones earlier this month.
Washington rejected European leaders' request for exemptions from the sanctions for companies in the finance, energy and healthcare sectors in early August. As a result, the EU has updated a statute to allow businesses to sue the US to recoup damages arising from Trump's sanctions.
Swift could be caught up in the crisis too, as the US's stance means it must remove Iranian banks from its network by early November or face potential consequences like asset freezes and travel bans for board members.
"As there has been no related change to EU legislation we continue to consult with and seek clarification from both EU and US authorities," a Swift spokesperson told CityAM "Our mission remains to be a global and neutral service provider to the financial industry."
Maas said: "In this situation, it is of strategic importance that we clearly tell Washington: we want to work together. But we will not let you act … over our heads.
"It is therefore essential that we strengthen European autonomy by setting up payment channels independent of the US, creating a European Monetary Fund and building an independent Swift system. The devil is in a thousand details. But every day the deal persists is better than the high-explosive crisis that otherwise threatens the Middle East."
Speaking today, Reuters reported that Merkel said: “On the question of independent payment systems, we have some problems in our dealings with Iran, no question, on the other hand we know that on questions of terrorist financing, for example, Swift is very important.
“[Maas's article] was an important contribution as it expresses in other words what I have said, that the transatlantic relationship is changing, we need to take more responsibility, Europe has to take its fate into its own hands.”
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