Europe steps up efforts to salvage Iran accord ditched by Trump

EUROPEAN powers alarmed by Donald J. Trump’s withdrawal from the Iran nuclear accord set out this week on an urgent search for ways to hold the deal together and avoid a further escalation of violence in the Middle East.

With Chancellor Angela Merkel warning that faith in the international order is at stake, Germany, France and the United Kingdom are embarking on a diplomatic mission to salvage what they can of the accord, both to keep Iran on side and to shield European companies from US sanctions that threaten billions of dollars of investment.

Foreign ministers from the UK, France and Germany are due to sit down with their Iranian counterpart, Javad Zarif, in Brussels on Tuesday to discuss how to move forward.

European Union (EU) leaders will then take up Iran at an informal dinner in Sofia the following day.

German Economy Minister Peter Altmaier, meanwhile, heads to Russia on Monday to help prepare a meeting between Merkel and President Vladimir Putin set for the end of the week in Sochi.

The flurry of activity between the European signatories of the 2015 accord with Iran reflects the lack of an alternative
to the deal.

It also points to a refusal to accept that Trump’s decision on Iran, fulfilling a campaign pledge to US voters, should be allowed to upend a global agreement negotiated over years and which international observers
say is working.

“At all levels, we are underlining the importance of preserving this agreement,” Yuri Ushakov, a Kremlin foreign-policy aide, told reporters in Moscow last Friday. “It has crucial significance not only for ensuring regional security, but also for stability in the world, and it’s extraordinarily important in the regime of nuclear nonproliferation.”

No plan B

Trump’s announcement last week that he was withdrawing the US from the landmark Iran deal inflamed regional tensions and threw European investments from oil to aerospace into jeopardy.

France insists that while EU nations are willing to discuss issues—including Iran’s ballistic missile program and its destabilizing role in the Middle East—the nuclear deal must stand.

“At the moment, it’s the only diplomatic proposition on the table,” French Foreign Minister Jean-Yves Le Drian told Le Parisien newspaper in an interview. “There is no plan B,” he said. “Plan B is war.”

The question is whether the remaining signatories—the so-called EU-3, Russia and China—can deliver the benefits of the accord, including access to global oil markets, trade and investment, that enticed the Iranians to join the agreement.

Iran’s Foreign Minister Zarif failed to win any concrete assurances to help tackle the US threat of economic sanctions during talks in Beijing last Sunday.

China is the biggest buyer of Iranian oil.

In the US National Security Adviser John Bolton raised the pressure on Europe, saying that countries and companies that continue to do business with Iran could face sanctions.

“Why would any business, why would the shareholders of any business, want to do business with the world’s central banker of international terrorism?” Bolton said last Sunday on ABC’s This Week.

Calls to Tehran

Merkel and French President Emmanuel Macron reached out to Iran last week to urge it stick to its commitments under the accord.

Prime Minister Theresa May added the UK’s voice to the push in a call with Rouhani last Sunday.

Concern—and anger—is growing among European governments at the uncertainty facing companies with investments in Iran.

Paris-based Total SA, for example, the only Western energy major investing in Iran, has pledged $1 billion in investment in the South Pars natural gas field, and has already spent $90 million helping to develop it.

France as a “matter of principle” can’t accept that “the US act like the world’s economic policeman,” Finance Minister Minister Bruno Le Maire told reporters last Friday.

He said he spoke to US Treasury Secretary Steven Mnuchin to request exceptions for French companies, a delay in implementing sanctions, and a so-called grandfather clause for companies that invested in Iran while the treaty was in place.

“The only way to avoid pain from these sanctions is negotiating with the US, but the instruments are not easy to find,” Volker Treier, deputy managing director of Germany’s Association of Chambers of Commerce and Industry, said
in an interview.

Merkel, speaking in the western German city of Muenster last Friday, said Trump’s latest blow to trans-Atlantic relations, on top of his withdrawal from the Paris climate accord and trade disputes, made clear that the world’s multilateral institutions are “in real crisis.”

If “everybody simply does what they want, then that’s bad news for the world,” she said. 

 

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Turning Points 2018