Future of Iran deal may depend on European intervention

The future of the landmark Iran nuclear deal hangs in the balance and its survival may depend on the unlikely success of last-minute European interventions with President Donald Trump. (AFP)
Updated 16 April 2018
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Future of Iran deal may depend on European intervention

WASHINGTON: The future of the landmark Iran nuclear deal hangs in the balance and its survival may depend on the unlikely success of last-minute European interventions with President Donald Trump.
French President Emmanuel Macron and German Chancellor Angela Merkel are to visit Washington separately later this month and, barring a sudden trip by British Prime Minister Theresa May, will likely be the last foreign leaders invested in the deal to see Trump ahead of his mid-May deadline for the accord to be strengthened. Trump has vowed to withdraw from the 2015 agreement by May 12 unless US, British, French and German negotiators can agree to fix what he sees as its serious flaws.
Iran has said US withdrawal from the nuclear deal and reimposed sanctions would destroy the agreement and has threatened a range of responses, including immediately restarting nuclear activities currently barred under the deal.
Negotiators met for a fourth time last week and made some progress but were unable to reach agreement on all points, according to US officials and outside advisers to the Trump administration familiar with the status of the talks. That potentially leaves the Iran deal’s fate to Macron, who will make a state visit to Washington on April 24, and Merkel, who pays a working visit to the US capital on April 27, these people said.
“It’s important to them and I know they’ll raise their hopes and concerns when they travel here to the United States in the coming days,” Mike Pompeo, the CIA chief and secretary of state-designate, told lawmakers on Thursday.
Pompeo’s testimony at his Senate confirmation hearing came a day after the negotiators met at the State Department to go over the four issues that Trump says must be addressed if he is to once again renew sanctions relief for Iran, officials said.
Those are: Iran’s ballistic missile testing and destabilizing behavior in the region, which are not covered by the deal, along with inspections of suspected nuclear sites and so-called “sunset provisions” that gradually allow Iran to resume advanced nuclear work after several years, which are part of the agreement.
Two senior US officials said the sides are “close to agreement” on missiles and inspections but “not there yet” on the sunset provisions.
“Malign” Iranian activities, including its support for Lebanon’s Hezbollah movement, Syrian President Bashar Assad and Houthi Shiite rebels in Yemen, were dealt with in a separate session that ended inconclusively, according to the officials, who like the outside advisers were not authorized to discuss the matter publicly and spoke on condition of anonymity.
The two officials and two outside advisers said the missile and inspections issues are essentially settled, but would not detail exactly what had been agreed or predict whether it would pass muster with Trump, let alone his new national security adviser John Bolton and Pompeo. Both men are Iran hawks and share the president’s disdain for the deal, which was a signature foreign policy achievement of former President Barack Obama.
Bolton and Pompeo’s voices on Iran could be heard as senior US officials discussed Trump’s decision to launch airstrikes against Syria on Friday. In addition to punishing Syria for its apparent use of chemical weapons, the strikes were meant to send a message to Iran about its role in the country, the officials told reporters on Saturday.
The officials and advisers said the main sticking point on the Iran deal remains the sunset provisions, with the Europeans balking at US demands for the automatic re-imposition of sanctions should Iran engage in advanced nuclear activity that would be permitted by the agreement once the restrictions expire.
To clear the impasse, one official and one outside adviser said a compromise is being considered under which sanctions would be re-imposed if Iran did enough work to reduce the time it would need to develop a nuclear weapon to less than a year. The current deal aims to keep Iran’s so-called “breakout time” to a year. But the expiration of the sunset provisions, the first of which is in 2024, means that the breakout time could eventually drop.
The Europeans, who along with the Iranians, have said they will not re-open the deal for negotiation, are reluctant to automatically re-impose sanctions for permitted activity, but have agreed in principle that Iran dropping below a one-year breakout time should be cause to at least consider new sanctions, according to the official and the adviser. How that breakout time is determined is still being discussed, they said.
Given the remaining differences, US national security officials are stepping up planning for various “day after” scenarios, including how to sell a pullout as the correct step for national security, how aggressively to reimpose US sanctions on Iran that had been lifted under the agreement and how to deal with Iranian and European fallout from such a step.


IMF says Egypt’s structural reforms key for sustainable development

Updated 53 min 32 sec ago
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IMF says Egypt’s structural reforms key for sustainable development

  • Egypt has implemented tough reforms under a $12 billion loan program agreed in late 2016
  • Egypt’s inflation eased to its lowest level in almost two years in May
CAIRO: IMF managing director Christine Lagarde has praised Egypt’s economy saying it was showing “strong signs of recovery” under a three-year reform plan, and stressed the importance of structural reforms to achieve more sustainable development.
Egypt has implemented tough reforms under a $12 billion loan program agreed in late 2016 that involved deep cuts to energy subsidies, new taxes, and a floated currency in a bid to draw back investors who fled after its 2011 uprising.
Financial markets have been closely watching how the government keeps to the terms of the deal, which has helped Cairo receive loan installments on schedule.
In a statement after she met with Egyptian President Abdel Fattah El-Sisi in New York on Sunday, Lagarde said the IMF remained committed to supporting Egypt.
“Egypt’s economy is showing strong signs of recovery, and its economic growth is among the highest in the Middle East,” Lagarde said in the September 23 statement.
She said she agreed with El-Sisi on the importance of capitalizing on Egypt’s “macroeconomic gains to advance the authorities’ home-grown structural reforms.”
“These reforms will help achieve more sustainable, inclusive and private-sector led growth which will help create jobs for Egypt’s young population, while also ensuring adequate resources are available for social protection,” she added, according to the statement.
Egypt’s inflation, which had soared to a record high of more than 33 percent in July 2017 after the import-dependent country floated the Egyptian pound in November 2016, eased to its lowest level in almost two years in May.
Core inflation in August stood at 8.83 percent while foreign reserves reached $44.419 billion compared with $36.143 billion in the same month last year.
Egypt in June raised fuel and electricity prices as part of the reforms agreed under the IMF plan in measures that had made it harder for ordinary Egyptians to make ends meet. Another fuel price rise is scheduled next year.