May 14, 2018, by Patrick Donahue and Gregory Viscusi
European powers alarmed by Donald 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 U.K. 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 U.S. sanctions that threaten billions of dollars of investment.
Foreign ministers from the U.K., 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 leaders will then take up Iran at an informal dinner in Sofia the following day. Merkel winds up the week with a meeting with President Vladimir Putin in the Russian resort of Sochi.
Stuck Between Trump and Iran, EU Lacks Plan for Nuclear Deal
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 U.S. 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 on 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 non-proliferation.”
No Plan B
Trump’s announcement last week that he was withdrawing from the landmark Iran deal inflamed regional tensions and threw European investments from oil to aerospace into jeopardy.
According to Iran’s ambassador to Britain, Prime Minister Theresa May told Iranian President Hassan Rouhani in a call Sunday that the three European foreign ministers will present Zarif with a “package of initiatives” to protect implementation of the accord. They aim to ensure Iran receives “the economic benefit of the deal,” Ambassador Hamid Baeidinejad said in a Twitter posting Monday.
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.” An Odoxa poll published last week said 67 percent of the French think Europe should ignore Trump and maintain its commercial ties with Iran.
The question is whether the remaining signatories — the so-called E-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. Zarif failed to win any concrete assurances to help tackle the U.S. threat of economic sanctions during talks in Beijing Sunday, and was due in Russia on Monday. China is the biggest buyer of Iranian oil.
Iran Calls for Clarity Over Nuclear Deal After Talks With China
In the U.S., 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 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. May added the U.K.’s voice to the push in her call with Rouhani on Sunday. The EU, which will host Tuesday’s talks, said the current accord “could be used as a basis for future work.”
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 U.S. act like the world’s economic policeman,” Finance Minister Minister Bruno Le Maire told reporters on Friday. He said he spoke to U.S. 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 U.S., 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.
Mnuchin, speaking in Israel on Monday, said the U.S. aimed to reimpose sanctions “until we have a real comprehensive agreement that limits nuclear weapons,” and ensures that Iran never acquires them.
Merkel 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 in the western German city of Muenster on Friday.