(Bloomberg) -- The U.S. and the European Union are no longer considering the option of unplugging Russia from the Swift international payments system if it attacks Ukraine, Handelsblatt reported, citing unidentified people familiar with the issue.
Nations involved believe that excluding Russia could destabilize financial markets in the short term, and would help develop an alternative, non-Western dominated infrastructure, the German newspaper said. Instead, Washington and Brussels are weighing targeted penalties against major Russian banks after an aggression. Germany is seeking exceptions from penalties to ensure that oil and gas payments remain possible, the paper said.
Many countries are opposed to cutting Russia off from the Swift system, but the option is not yet completely off the table, according to an EU diplomat who declined to be named Monday discussing confidential talks. Russian banks will, however, very likely be targeted after an attack against Ukraine, the diplomat added.
Bloomberg previously reported that cutting Russia off from Swift was seen as a red line by some major western European countries. The U.S. and its European allies have been discussing targeting several Russian banks with sanctions should Russia invade Ukraine. A number of those same European governments have also proposed carve-outs for some banks and transactions, as well as introducing some financial measures gradually.
The bulk of any EU-wide response would have to be unanimously agreed by all 27 member states.
©2022 Bloomberg L.P.