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Europe could be missing an opportunity in its Iran policy

The gap between the new US administration and Europe in their respective approaches to Iran is only growing wider, as events this week illustrate.
Nikki Haley, the US ambassador to the UN, on Wednesday confirmed US support for the UN-led Syria peace talks, adding that it was important “we get Iran and their proxies out.” Also this week, it emerged that key US senators are closer to reaching a bipartisan agreement on Iran sanctions legislation to respond to Iran’s recurrent ballistic missile launches.
While the US stepped up the pressure on Iran, Iranian media reported on the establishment of an Iranian-European bank based in Europe, seen as vital to strengthen relations between Iranian financial institutions and their European counterparts.

The US and EU states have two very different views about what coercion and constructive engagement can achieve in curbing Tehran’s belligerent regional activities.

Manuel Almeida

The EU and its individual member states never made a secret of their intention to bolster trade and other ties with Iran following the nuclear deal. European business delegations have been flocking to Tehran in the hope of opportunities to set up shop, invest and find solutions to navigate the complicated local business environment.
In a visit to Tehran in April last year, the EU’s foreign policy chief, Federica Mogherini, avowed the bloc’s determination to again become Iran’s largest economic partner, as was the case at the end of the presidency of Mohammed Khatami in 2005, when the EU accounted for almost 40 percent of Iranian exports. “We are the ones that used to be Iran’s first partner on the economic fields, on trade, investment, and we want to be back to that,” Mogherini stated. Interestingly, Mogherini — a left-wing politician and former communist — has faced criticism for having a soft spot for both Iran and Russia.

EU, US diverge on Iran
The opportunity the Iranian market represents for European companies certainly explains much of Europe’s Iran approach. But behind this growing disparity between Americans and Europeans on Iran are also two very different views about what coercion and constructive engagement can achieve in curbing Iran’s belligerent regional policy.
Despite sticking half-heartedly to the nuclear deal, the Trump administration sees the legacy of President Obama on Iran as disastrous for the interests of the US and the stability of the region. Obama’s reluctance — for the sake of protecting the nuclear deal — to pressure Iran to be more collaborative and less confrontational in various regional theaters has been interpreted by Iran’s hard-liners as weakness.
The dominant view in Europe is that the path of sticks and no carrots has been tried before, with no results in changing Iran’s regional policies and curbing the influence of hard-liners in Tehran. It risks igniting tensions, even war, and further empowering the hard-liners.
Plus, EU leaders and technocrats tend to be enthusiastic believers in the transformative and peaceful power of economic interdependence. That is the essence of the European project.
By engaging with Tehran — on trade, investment, and other areas beyond the economy — Europeans expect to capitalize on years of diplomatic efforts to boost more moderate factions within Iran and find a more cooperative interlocutor on the various regional crises where Iran is involved.
The European position has its merits, but its track record so far is problematic. There is little evidence that this economic opening is benefiting the private sector and the average Iranian citizen. Supreme Leader Ali Khamenei criticized the nuclear deal for exactly that last year. Instead, state-owned firms — many of them owned by Iran’s Revolutionary Guard Corps, and part of the “economy of resistance” — are winning most of the new contracts.

Regional policy a concern
This European rapprochement and its economic baggage does not also seem to have strengthened the prospects of the reformists or the more moderate factions represented by current President Hassan Rouhani.
Yet it is Iran’s regional and security policy, still mostly dominated by hard-liners, that should warrant the greatest concern in Europe, above all regarding the issue of Syria. With the crucial military and economic support of Iran and pro-Iranian groups, Assad has burned his own country to the ground and blocked any attempts to negotiate a reasonable political solution.
This makes Iranian forces one of the chief culprits in the worst human catastrophe the region and the world have witnessed in recent decades. The large-scale war crimes committed by the regime are not only a shocking violation of every basic principle, but the practical effects of it — refugee waves, social tensions, radicalism and terrorism — are threatening the EU’s own survival.
It is possible that European attempts to leverage its importance for Iran beyond economic ties are being carried out mostly behind closed doors. If this is not the case, Europe could be missing an opportunity to use the greater influence it now enjoys in Tehran to push the Iranian government to compromise on regional crises and restrain the influence of hard-liners.

• Dr. Manuel Almeida is a leading political analyst, providing research and consultancy services focusing on the Middle East.
He is the former editor of the English online edition of Asharq Al-Awsat newspaper, and holds a PhD in international relations from the London School of Economics and Political Science. He can be reached on Twitter: @_ManuelAlmeida.