Iran-US relations are even more perilous than before the lifting of sanctions. Trump’s protectionist policy threatens a new offensive against foreign companies, so Tehran is building bigger housing complexes, diversifying its oil export market to Europe, and offering shale oil extraction.
A former US negotiator now advises the EU to provide Iran with more than €2bn a year in trade in euros. Nothing says sanctions are coming out of the shadows like an economy that thrives with a helping hand.
The Guardian view on the Iranian nuclear deal: forget about replacing it | Editorial Read more
The final deadline to determine if the Iran nuclear deal is still valid is this month. Last weekend in Zurich, diplomats from some signatories are gathering to discuss the future of the deal. As the optimism was building, Trump pulled America out of the deal and said he would reimpose sanctions. This is expected to close most US oil and gas markets to Iran. Will Europe stand by to help?
Last week’s announcement by the US Treasury secretary, Steven Mnuchin, that Britain, China, France and Germany cannot do business with Iran provided is already in effect has yet to spark retaliation. If European businesses cannot buy Iranian oil, they will not buy anything. However, in the run-up to the reimposition of sanctions, the European commission must intervene on behalf of European firms and governments. Last week French finance minister Bruno Le Maire warned that European companies will be put out of business unless Europe takes action to support them.
The US restriction on foreign companies doing business with Iran had been a key element of the 2015 deal, which opened up the market and removed sanctions that were wreaking havoc with financial markets. It is now feared that by revoking it, the US will choke off European companies from other parts of the world. It would add another layer of insecurity to the difficult situation Europe finds itself in with Iran.
Under the terms of the Iran deal, Iran was supposed to limit its stockpile of enriched uranium to levels safe for no one to reprocess, meaning no country with research facilities would build a facility to break down its fuel into bomb-grade material. After several failures to agree on how to stop Iran from building the capacity to make a bomb, last month the P5+1 group of countries (the US, Russia, China, Britain, France and Germany) announced that it would consider ways to ensure Iran did not build a bomb.
The critical next step is to convince Iran to sign up to stringent restrictions on its nuclear programme. Currently Iran is believed to have as many as 7,000 centrifuges, half of which are at Natanz.
With some 15 years to go before its scheduled breakout, Iran has made immense strides in enriching uranium and doing so safely. The Europeans, while welcoming technological advance, oppose the rapid development of nuclear arms, which they say would continue to increase the risk of nuclear war. To enter into discussions on non-proliferation, Iran is required to carry out an extensive amount of medical research on nuclear materials, and sign the Comprehensive Nuclear-Test-Ban Treaty, which would put Iran under international monitoring.
The US must address the principal concerns of the P5+1, but a contradiction still remains. In order to keep Iran from building a bomb, which would potentially destabilise the region, Trump has insisted that Iran should continue to abide by the provisions of the 2015 nuclear deal. Washington has informed European countries that the sanctions would revert to full impact in 15 days unless a full and comprehensive agreement was in place. Meanwhile, Tehran has not been obliged to enter into any agreements until the sanctions are lifted. With Iran trading mostly with domestic banks, this has left Europeans in a difficult position.
The key is to avoid the confrontation in which Trump is pushing, and forge a consensus on what concrete steps are necessary to curb Iran’s nuclear programme, but also on efforts to prevent the destruction of the deal.