E.U. asked to cut off Iran's SWIFT access

oil sanctions

March 4, 2013 

European Union leaders are scheduled to meet March 7 to consider a U.S. proposal that the E.U. cut off Iran’s access to a central European financial system that enables global transactions in euros, according to U.S. government officials apprised of the meeting.

U.S. officials have criticized the E.U. for allowing Iran to carry out financial transactions via the European Central Bank (ECB), which U.S. government officials say allows Tehran to skirt Western economic sanctions

Reuters is reporting that a European Union court has ruled against the EU banking sanctions imposed on one of Iran’s largest banks, which extends to the payment sanctions imposed by Swift in March of last year. This represents the second such judgment against the banking sanctions and brings into question the legitimacy of using the Swift payments network as an economic weapon.

On Tuesday, the EU’s General Court ruled that, in the case of Bank Saderat, there was insufficient evidence demonstrating that the bank was involved in Iran’s nuclear program. Last week, the court issued a similar ruling in the case of Bank Mellat, the largest private sector lender in Iran. Boycotted by the EU since July 2010 and blocked out of Swift since March 2012, the two banks had filed suit with the European court to challenge those sanctions. EU

eurozone zombie banks


Bank deposits with the ECB now stand at their highest level since June 2010 at €905bn (£772bn) as lenders withdraw deposits held with their peers and put them into the central bank. At the same time, banks in major eurozone countries such as France and Italy have become increasingly reliant on central bank funding. This follows the trend seen in smaller countries like Ireland where lenders have effectively becomes taxpayer-funded "zombie" banks.
The European banking sector's problems are being exacerbated by a wave of asset sales as lenders look to dramatically shrink their balance sheets. UBS estimates eurozone banks could sell off between €3.7 trillion and €4.5 trillion of assets in the next three years.
The financial resources to bail out Europe must primarily come from within the continent, the official said, adding that the IMF cannot substitute for a European show of force.
President Barack Obama has stressed that Europe has the means to resolve its crisis.
Europe simply needs to muster the political will, Obama said December 8,
As part of the summit, European Union members agreed to raise as much as 200 billion euros, or $267 billion, for loans the International Monetary Fund could offer to debt-wracked nations on the continent. But European officials failed to increase the 500 billion euro, or $689 billion, cap on their own bailout lending funds.