Atlantic tremors: US and European allies not on the page on Iran deal

Khaled Dawoud , Sunday 20 May 2018

Trump’s decision to withdraw from the Iran nuclear deal has widened the rift between the US and Europe to unprecedented levels

Trump, Macron, Merkel
US President Donald Trump (L), French President Emmanuel Macron (C) and German Chancellor Angela Merkel

The United States renewed this week its threat to impose sanctions on European companies that do business with Iran, as the remaining participants in the Iran nuclear accord stiffened their resolve to keep that agreement operational.

White House National Security Adviser John Bolton said US sanctions on European companies that maintain business dealings with Iran were “possible”, but Secretary of State Mike Pompeo said he remained hopeful Washington and its allies could strike a new nuclear deal with Tehran.

Bolton struck a more hawkish tone with his comments in an interview with CNN’s State of the Union programme than Pompeo did when he was interviewed on Fox News Sunday.

US President Donald Trump on 8 May announced that the United States would pull out of a 2015 deal negotiated by the Obama administration.

So far, China, France, Russia, Britain, the European Union and Iran remain in the accord, which placed controls on Iran’s nuclear programme and led to a relaxation of US economic sanctions against Iran and companies doing business there.

Despite the US exit, Britain and Iran on Sunday expressed their commitment to ensuring that the accord is upheld, according to a statement released by the office of British Prime Minister Theresa May.

And Germany said it will spend the next few months trying to persuade Washington to change its mind.

When asked whether the United States might impose sanctions on European companies that continue to do business with Iran, Bolton told CNN: “It’s possible. It depends on the conduct of other governments.”

Pompeo said he was “hopeful in the days and weeks ahead we can come up with a deal that really works, that really protects the world from Iranian bad behaviour, not just their nuclear programme, but their missiles and their malign behaviour as well.”

The US withdrawal from the Iran deal has upset Washington’s European allies, cast uncertainty over global oil supplies and raised the risk of conflict in the Middle East.

Germany’s Minister for Economic Affairs Peter Altmaier, said Sunday that Berlin will try to “persuade the US government to change its behaviour”.

In an interview with ZDF public television, Altmaier noted the United States has set a 90-day deadline for foreign firms to comply with the return of sanctions and that this period can be used to convince Washington to change course.

Israel and Iran engaged in an extensive military exchange on the heels of Trump’s decision to leave the deal. On Saturday, French President Emmanuel Macron told Trump in a telephone call that he was worried about stability in the Middle East, according to Macron’s office.

As a private citizen, Bolton in the past has suggested that the United States push for a change in Iran’s government. However, in an interview aired on the ABC’s This Week, Bolton refused to confirm his personal views.

“That’s not the policy of the administration,” he said. “The policy of the administration is to make sure that Iran never gets close to deliverable nuclear weapons.”

In the CNN interview, Bolton did not respond directly when asked whether Trump might seek “regime change” in Iran, or whether the US military would be ordered to make a pre-emptive strike against any Iranian nuclear facility.

“I’m not the national security decision-maker,” Bolton said, adding that Trump “makes the decision and the advice that I give him is between us”.

When pressed by CNN on whether the Trump administration would sanction European firms that continue to do business with Iran, Bolton said: “I think the Europeans will see that it’s in their interest ultimately to come along with us.”

Bolton said Europe was still digesting Trump’s 8 May move. “I think at the moment there’s some feeling in Europe — they’re really surprised we got out of it, really surprised at the re-imposition of strict sanctions. I think that will sink in. We’ll see what happens then,” Bolton said.

However, the French were the most outspoken in criticising the US move, considering that many French companies have already started doing business in Iran worth billions after the nuclear deal was concluded in 2015.

On Friday, French Finance Minister Bruno Le Maire suggested Trump’s proposals to corral Europe into joining US foreign policy on Iran may lead to a severe backlash by EU firms and politicians, especially advocates of a stronger independent European foreign policy.

“We have to work among ourselves in Europe to defend our European economic sovereignty,” Le Maire said, adding that Europe could use the same instruments as the US to defend its interests. Speaking on Europe1 he added: “Do we want to be a vassal that obeys and jumps to attention?”

Le Maire put forward three main proposals starting with an EU-wide blocking statute similar to an EU regulation passed in 1996 designed to nullify any US sanctions imposed on EU firms.

The statute permitted European companies to ignore the US sanctions and said that any decisions by foreign courts based on such sanctions would not be upheld in Europe. The US backed down before any sanctions were implemented.

He added: “The second avenue is looking at Europe’s financial independence — what can we do to give Europe more financial tools allowing it to be independent from the United States?” One proposal is to set up a purely European finance house to oversee euro-denominated transactions with Iran.

He also proposed a European agency capable of following the activities of foreign companies. Le Maire said he would meet with German and British finance ministers at the end of the month to discuss these proposals.

The UK Foreign Secretary Boris Johnson, also met his French counterpart, Jean-Yves Le Drian, in London Monday to discuss the Iran crisis. Le Drian has already described the US extraterritorial sanctions as unacceptable, saying European business should not be required to pay for US foreign policy decisions.

On Tuesday, Iranian Foreign Minister Mohamed Javad Zarif met his counterparts from France, Germany and Britain in Brussels. The Iranian government said in a statement that Europe needed “to move from giving pledges to taking practical steps without any preconditions”.

In Italy, Nathalie Tocci, an adviser to EU external affairs chief Federica Mogherini, said Trump’s decision to pull out of the Iran deal was “an utter and unjustified betrayal of Europe”. She called for proportionate reprisals if necessary.

The EU and US combined to impose sanctions against Iran between 2012 and 2015. After the Iran deal was struck in 2015, the Obama administration worked with European banks to reassure them that some US sanctions that remained in force did not restrict the rights of European business.

The former US ambassador to Italy, David Thorne, said Trump’s decision had the potential to cause the biggest rift between the US and mainland Europe since the 2003 invasion of Iraq.

Ellie Geranmayeh, an Iran expert with the European Council on Foreign Relations, said Europe needed to produce a counter-package against the US, including penalties against assets of US companies based in Europe, to allow for a clawback of illegal fines imposed.

The UK is not as heavily involved in Iranian trade as France, Germany and Italy, partly because UK finance houses are so strongly intertwined with the US, and therefore vulnerable to fines if they are deemed to have breached sanctions.

*A version of this article appears in print in the 17 May 2018 edition of Al-Ahram Weekly with headline: Atlantic tremors  

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