Europe Unveils Special Purpose Vehicle to Bypass SWIFT, Jeopardizing Dollar’s Reserve Status
The comments below are an edited and abridged synopsis of an article by Tyler Durden
In a vote of ‘no confidence’ in the US monopoly over global payment infrastructure, one month ago Germany’s foreign minister Heiko Maas 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 and as a means of rescuing the nuclear deal between Iran and the west.
Maas said it was vital for Europe to stick with the Iran deal. Europe no longer wants to be a vassal state to US monopoly over global payments, and will now aggressively pursue its own SWIFT network that is not subservient to Washington’s every whim.
Many discounted the proposal as being too aggressive; a direct assault on SWIFT, and Washington, would be seen by the rest of the world as clear mutiny against a US-dominated global regime, and could spark a crisis of confidence in the reserve status of the dollar.
Europe was intent on creating a loophole to the US ability to weaponize the global currency of account at will, something observed recently as part of Trump’s latest sanctions on Iran, and as a result the EU said that it would establish a special payment channel to allow Europe and others to continue financial transactions with Iran while avoiding exposure to US sanctions.
While keeping SWIFT as-is for now, the EU’s foreign-policy head Federica Mogherini, side by side with Iran’s Foreign Minister Javad Zarif, announced a ‘special purpose vehicle’ after a meeting at the U.N. that included virtually 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 US opposition.