Germany has called for the creation of a new payments system independent of the US that would allow Brussels to be independent in its financial operations from Washington. The intention is to strengthen European autonomy by establishing payment channels that are independent of the US, creating a European Monetary Fund and building up an independent SWIFT network system.
While keeping SWIFT as is, for now, the EU’s foreign-policy head announced a “special purpose vehicle†(SPV) after a meeting at the U.N. of the parties still committed to the deal – EU, U.K., France, Germany, Iran, Russia and China. In fact, everyone but the US.
The plan to create the SPV will mean that EU member states will set up a legal entity to facilitate legitimate financial transactions with Iran, and this will allow European companies to continue trade with Iran despite Trump’s opposition. Germany, France and the U.K. would set up a multinational state-backed financial intermediary that would deal with companies interested in Iran transactions and with Iranian counter-parties. Such transactions, presumably in euros and pounds sterling, would not be transparent to American authorities. European companies dealing with the state-owned intermediary technically might not even be in violation of the U.S. sanctions as currently written.
And, in a potentially massive development, the system would be likely be open to Russia and China as well as it would enable the world’s economies to trade with each other, fully independent of SWIFT.
China and Russia have long sought the alternative, but it’s only with Europe, home of the world’s second biggest reserve currency, that they stand a chance of challenging American dominance.
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Source: www.zerohedge.com/news/2018-09-25
