Iran on August 20 pressured Europe to accelerate its so far underwhelming efforts to salvage the nuclear deal.
Officials urged the Europeans to step up their rescue initiatives on the day that French energy major Total officially confirmed it was abandoning its role in developing part of Iran’s giant South Pars gas field because it could not obtain a waiver against US sanctions.
US President Donald Trump unilaterally withdrew Washington from the multilateral accord in early May, but, along with Iran, the remaining signatories—the UK, France and Germany, China and Russia—pledged to maintain the deal despite the exposure their companies would have to heavy US sanctions.
“Europeans and other signatories of the deal have been trying to save the deal... but the process has been slow. It should be accelerated,” Foreign Ministry spokesman Bahram Qasemi said. “Iran is [to date] relying mainly on its own capabilities to overcome America’s new sanctions,” he told a press briefing broadcast on state TV.
The day prior to Qasemi’s statement, Iranian Foreign Minister Mohammad Javad Zarif was reported by Iran’s semi-official Tasnim News Agency as saying: "These measures [by Europe] have been an announcement of stances rather than operational measures. Though they [the Europeans] have moved forward, we believe that Europe is still not ready to pay the price."
In early August, EU foreign policy chief Federica Mogherini insisted that the member states of the 28-nation European bloc would not let the Iran nuclear deal die and said European companies were not at all bound by Washington policy to stop trading with, or investing in, Iran.
Trump is trying exert immense pressure on the Iranian economy, to the point where Tehran will have no choice but to come to the table to renegotiate its role in Middle East affairs. To do that, however, the US will have to persuade a huge number of companies and countries to not do any business with Iran. The threat of heavy sanctions, and the imposition of such sanctions, is the key policy designed to achieve that aim. Europe’s big companies, with links to the US economy or financial system, are finding it tremendously difficult to avoid exposure to the sanctions despite the EU’s pledge of assistance. The EU therefore seems to be encouraging waves of small and medium sized enterprises (SMEs), with no or limited US exposure, to pick up some of the slack.
Mogherini earlier said: “We are encouraging small and medium enterprises in particular to increase business with and in Iran as part of something [that] for us is a security priority.”
“If there is one piece of international agreements on nuclear non-proliferation that is delivering, it has to be maintained,” she has also stated.
The EU hopes many SMEs based in Europe will seize opportunities to profit from the vast potential offered in developing an economy with 80mn inhabitants. Many of the big European companies that have unbreakable US links—as well as Total these include carmakers Peugeot, Renault and Daimler, Deutsche Bahn and Deutsche Telekom, and oil, gas and petrochemical group OMV—have already announced continuing to do business with Iran is not feasible under the current circumstances.
The biggest boost to Iran’s chances of overcoming the economic assault launched by the US has come from China. The Chinese, who are Iran’s number one customer for its lifeline oil exports, have stated clearly that they will not bow to the Trump administration’s demand that countries stop importing Iranian crude by November 4. However, as an indication of how much determination there is among US officials to play hard ball with the White House’s Iran policy, there have been rumblings in Washington in the past few days that China could be hit with sanctions if it follows through on its commitment to keep buying oil from Iran.
Second biggest buyer of Iranian oil India, meanwhile, appears to be in negotiations with the US to secure a waiver for the delivery of around half the Iranian oil it currently receives.
Under a “blocking statute”, European firms have been instructed that they should not comply with demands from the White House for them to drop all business with Iran. Those who nevertheless opt to pull out must obtain authorisation from the European Commission. Without an authorisation, they even face the risk of being sued by EU member states. A mechanism has also been opened to allow EU businesses impacted by the sanctions to sue the US administration in the national courts of member states.
One other move lately announced by the EU is the provision of a financing channel in Austria for trade with Iran, again mostly with SMEs in mind. But the limitations to the bloc’s efforts were last month shown when even Brussels’ own lending arm, the Luxembourg-based European Investment Bank (EIB), baulked at moves by the European Commission to persuade it to do business with Iran, arguing that the funding it raises in the US would be under threat.
The EU is promising to unveil more measures to help secure continued nuclear deal benefits for Iran over coming months, but the Iranian political centrists will need to see results to convince the hardliners that sticking with the accord is the best way forward. Too much talk and not enough action from the Europeans could see the hardliners demand Iran itself withdraw from the nuclear deal.