BERLIN — In a long column on how Europe should respond to U.S. policy under President Donald Trump, German foreign minister, Heiko Maas, a member of Merkel’s junior Social Democrat coalition partners, called for the creation of a “balanced partnership” with the US in which the Europeans filled the gaps left where the US withdrew from the world. Europe must, he said, “form a counterweight when the US crosses red lines”.
He also suggested that Europe needed its own system for cross-border payments to conduct trade with Iran in the face of U.S. sanctions.
European powers are scrambling to ensure Iran continues to get the economic benefits needed to convince it to stay in the deal agreed in 2015 with six world powers but which the U.S. president abandoned in May. Trump has since imposed new sanctions on Iran which could trigger penalties on EU firms doing business with Tehran.
German Chancellor Angela Merkel said on Wednesday she agreed with her foreign minister that relations with the United States were changing but she stopped short of backing his call for a separate EU payments system.
“On the question of independent payment systems, we have some problems in our dealings with Iran, no question, on the other hand we know that on questions of terrorist financing, for example, SWIFT is very important,” Merkel told reporters, referring to the global SWIFT network that facilitates many of the world’s cross-border transactions.
She added that it was very important to keep good co-operation with the United States in the area of security. Belgium-based SWIFT had no comment.
Maas wrote it was essential that Europe strengthen its autonomy by creating independent payment channels, a European Monetary Fund and an independent SWIFT system.
A spokeswoman for the foreign ministry said the article by Maas in the Handelsblatt daily was intended to provoke debate on relations with Washington, including how European powers can keep the nuclear deal with Iran alive after the U.S. pullout.
Germany is discussing possibilities with partners, including Britain and France, said the spokeswoman. She added that keeping financial channels open was vital to save the deal, under which the Islamic Republic agreed to curb its nuclear activities in return for a lifting of international sanctions.
People familiar with SWIFT said that creating a second, European SWIFT without U.S. ties or a dedicated European messaging link to Tehran would not work given they would remain part of the same group that includes U.S. members.
The issue was not SWIFT but longstanding European frustration with the dollar’s dominance in global finance and the cross-border political power it confers on the United States, they said.
“All this is about the aspiration to have an alternative to dollar payments. SWIFT is both a global standard and a messaging infrastructure, and fragmenting that would defeat the purpose of what SWIFT is about,” said Nicolas Veron, a financial services specialist at Bruegel think tank in Brussels.
EU diplomats said U.S. President Donald Trump’s America First stance on trade and Iran was fuelling a rethink about EU dependency on the U.S. financial system.
“He is forcing us to explore alternatives …or we can’t carry out our own policies,” a diplomat said.
However, European powers appear to be struggling to find or agree on effective options.
Merkel, leader of Germany’s conservative bloc, said she had read the article by Maas and that its broad thrust, calling for a new approach to the United States, chimed with her thinking.
“It was an important contribution as it expresses in other words what I have said, that the transatlantic relationship is changing, we need to take more responsibility, Europe has to take its fate into its own hands,” she told a news conference alongside the visiting president of Angola.