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All tagged EU
As the Trump administration’s “maximum pressure” sanctions campaign rolls on, it might seem like Europe not only lacks the means to defend its trade with the Islamic Republic, but also that there’s little left to defend. But even with significant barriers, Europe continues to export billions of dollars of parts, machinery, and transport equipment to Iran.
◢ Josep Borrell, the current foreign minister of Spain, is a worthy nominee to replace Federica Mogherini as the EU’s top diplomat. His views on Iran suggest continuity with Mogherini’s pro-engagement policy and willingness to push back on the Trump administration’s unilateralism. But as the crisis over the JCPOA accelerates, the situation Borrell will inherit in a few months may prevent him from keeping the EU engaged in constructive dialogue with Iran.
◢ An examination of the nature of Europe-Iran trade and the impact of this trade on Iran’s currency markets, suggests that the SPV could have a significant and stabilizing impact on Iran’s economy by helping to fight runaway inflation, the foremost economic challenge facing Iran’s leadership—even if the mechanism is initially limited to humanitarian trade.
◢ Technical work on Europe’s SPV for Iran trade continues to move forward. Meanwhile, the Iranian government seems content to exercise “strategic patience” as it waits for the new mechanism to come online. But while this patience is commendable, Iran should be taking a much more active role in shaping the SPV to suit its needs.
◢ A crisis is looming in Iran’s healthcare sector: patients are reporting shortages in life-saving medicine. The situation is expected to worsen once US sanctions on Iran are reimposed in November. European and US companies that can provide the advanced medicine and equipment needed to treat chronic diseases inside Iran are grappling with how to sustain their operations. New US sanctions will put the health of ordinary Iranians at risk. Europe can take concrete steps to minimize this—steps which also support its ongoing commitment to the nuclear deal.
◢ With the UK poised to leave the European Union, Brexit Britain can no longer rely on EU economic measures to protect the Iran nuclear deal. The UK government needs to parallelize its efforts with those of the EU, following the example of EU member states such as France and Austria in order to explore the use of state-owned financing entities to open sanctions-compliant investment channels. The Iranian government should insist that the UK shows greater initiative as a party to the JCPOA.
◢ As the US chooses the "nuclear option" on Iran's oil, Europe must find leverage and force the US to walk back on its announced policy of driving down Iranian oil exports to zero. The negative consequences for European economy could prove significant, and the risks of regional escalation are high. There are three measures that the EU can pursue to pressure Trump and prevent a dangerous escalation.
◢ The E3 should now acknowledge that its negotiating tactic of accommodation and comprise with Trump has failed. If Europe is to have any influence forthcoming US policy on Iran, European governments should quickly shift tack, unifying behind a more assertive diplomatic strategy aimed at deterring the worst-case scenario of renewed Iranian nuclear program and more instability and violence in a region close to its borders.
◢ If Europe is serious about saving the nuclear deal, then the appointment of Pompeo, an Iran-hawk in Washington, should serve as an urgent prompt to rethink its current strategy.
◢ Europeans should be clear-eyed about the chances of success of current talks with the United States. Based on recent precedent, Trump is likely to perceive Europe’s flexibility and accommodation over Iran policy as a weakness that he can exploit to raise the benchmarks of demands.
