Tuesday, August 21, 2018

End of dollar hegemony ramping up as Germany's Foreign Minister calls for independent EU alternative to SWIFT

With President Trump causing extreme chaos and consternation to  Europe once again by threatening them with economic sanctions if they continue to trade with Iran, on Aug. 21 the Foreign Minister of Germany proposed that the EU begin plans to disconnect from the U.S. and dollar hegemony by creating its own alternative to SWIFT.

SWIFT is the world's primary monetary messaging system that tracks all currency transactions between banks, and is the main platform for the global reserve currency.
The European Union should set up a system that would allow Brussels to be independent in its financial operations from Washington, according to German Foreign Minister Heiko Maas. 
“It is indispensable that we strengthen European autonomy by creating payment channels that are independent of the United States, a European Monetary Fund and an independent SWIFT system,” Mass wrote in the Handelsblatt business daily.
SWIFT is a network that enables financial institutions worldwide to send and receive information about financial transactions based in Belgium. The system’s management claims SWIFT remains politically neutral and independent. – Russia Today
Since gaining control over the global reserve currency, first through the Bretton Woods agreement and later through the introduction of the Petrodollar, the U.S. has often used the platform as an economic weapon to cut off nations they do not agree with from having access to dollars and to banking systems.

However beginning in 2016, first in China and then later in Russia, the two largest banking and energy economies have themselves already implemented their own alternatives to SWIFT, and thus have lessened the effects economic sanctions have had on their countries.

Should Europe be able to both use the Euro as a primary trade payment currency, and also implement their own SWIFT alternative, the power Washington has over most of the world's monetary systems will have evaporated to the point where one day they themselves could become the victim of economic isolation, and where the dollar simply disappears as the accepted reserve currency.


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