Communication surrounding the Syrian crisis offers a perfect example of thoroughly outdated rhetoric. Indeed, the subtle analysis of commentators draw the attention – correctly – on the dangers of a military escalation of the conflict which has the capacity of destroying the planet; however, for this very reason, it is unlikely to happen as was the case during the Cuban missile crisis many years ago.

Nevertheless, confrontations have not disappeared since then, but have developed new characteristics among which one can pinpoint “terrorism”, “cyber warfare” or “sanctions”. If the UN was created with the hope to bring an end to “classic” wars, one can but acknowledge the total inadequacy of its charter to deal with these new forms of conflict:

“terrorism” accounts for numerous human “victims” as well as significant material destruction but cannot be effectively condemned by the UN, either because terrorist groups are not Member States, or – in the case of “State terrorism” – because it is considered as a domestic problem which is beyond its formal remit, limiting its action to “resolutions” that are rarely more than pious exhortations.

“Cyber warfare”, whose destabilising potential is steadily increasing, whether it aims at the security of physical infrastructure that has become essential (internet, electricity, etc.) or manipulates information (fake news) through the social networks, does not lend itself to be policed by the organs of the U.N.

“Sanctions” (except those mandated by the UN itself, though often disregarded) imposed by one or several countries on another, fall totally outside of the UN’s remit. If they do not cause bodily harm directly, their consequences can be devastating for the most vulnerable segments of the populations affected.

There is, however one area in particular where sanctions can become a “weapon of mass destruction”: the “weaponising” of a currency. Indeed, with the exception of transactions settled in cash (which are often suspect) the country issuer of a given currency has the exclusive control over its usage because all transaction denominated in that currency must necessarily be settled somewhere in the territory on which it exercises “national sovereignty”. It is this feature that creates the exorbitant power wielded by the United States over all transactions denominated in USD (which represent the great majority of transnational payments), whatever the nationality of the contracting parties.

Thus a significant part of the USD 350 billion in fines paid by the banking sector between 2012 and 2017 is attributable to violations of sanctions imposed by the USA on third party countries. The quasi invisible impact of these fines on the (apparent) stability of the banking sector leads one to believe that – second only to the traffic in drugs – these illicit operations are highly lucrative.

The power of an issuer over its currency, which is one of the main attributes of national sovereignty, has always existed; historically abuses have been limited currency warfare by debasing the currency’s metal content or resorting to competitive devaluations, (tools which were available to any issuer), as was the case during the great depression of the 1930’s or, mainly in Europe, during the period preceding the introduction of the single currency.

The 2007 financial crisis encouraged American monetary authorities to broaden the scope of their toolkit, having Congress pass legislation authorizing sanctions against those who would transgress rules established unilaterally. Their enforceability was the result of the quasi universal acceptability of the USD as the preferred means of settling international transactions, privilege which does not benefit any other currency to the same extent. As a result, operators, as well as their governments, complained about the apparent “extra-territoriality” of the legislation, considered to be illegal because of their interpretation of international law; the USA argued over the primacy of their sovereignty on all operations carried out inside their territory, in an unequal battle in which they threatened to bar delinquents from access to the US market.

In the current environment, the possibility of abusing these powers for purely political reasons opens up a whole new field of potential conflict, the repercussions of which are hard to evaluate. The recent sanctions by the USA against Russia could prove effective, cowering foreign financial institutions fearing reprisals, even when their own governments are not concerned (or opposed) and even if the transaction is denominated in a currency other than the USD. Le scope for escalation of reciprocal sanctions (cutting gas deliveries, dumping, tariffs, etc.) seems unlimited. It is evident that in these matters, the UN is incapable of imposing any restraint on its members.

It would appear highly dangerous to leave the monopoly of such a powerful monetary weapon in the hands of a single country. The logical conclusion should be to agree by treaty to a set of common rules and to broaden progressively the acceptability of the € and/or the Renminbi to a level comparable to the USD, so as to offer operators a set of credible alternatives. Unfortunately, the nature of the Chinese regime and their conception of “national sovereignty” have nothing to envy the current American stance, while the absence of a political Authority within the Eurozone – which prolongs unnecessarily the “redenomination” risk – make such a path forward absolute wishful thinking! The danger is to encourage potential targets of American unilateralism to have recourse to a power contest in areas where they feel less vulnerable and that one sleepwalks into a conflict which one believed was impossible.

Such a scenario is all the more realistic that the White House is occupied by a totally unpredictable President and the Kremlin by a cynical Czar who, in pure Russian tradition, respects only force and has disdainful contempt for his fellow citizens. This creates a highly unstable geopolitical environment, which at the time of writing, the financial markets seem blissfully to ignore.

The Member States of the EU should realise that in this particular perilous moment, they should proceed forcefully with their further integration and bury their petty disagreements. It is not too late to choose between the marginalisation and subordination of Europe and the construction of a strong political Union that will be heard and respected on the international stage.