Europe cannot afford diplomatic confrontation with the US
The US has been a key player in the inception and containment of Iran’s nuclear development. In the 1950s, Iran’s nuclear program was launched with the help of the US as part of the Atoms for Peace program. This continued until Iran’s revolution of 1979.
From then on, its nuclear development was seen as a threat until 2015, when it agreed to limit its sensitive nuclear activities and allow international inspections in return for the lifting of crippling economic sanctions. But that deal is now in jeopardy as President Donald Trump has withdrawn the US from it. Faced with such uncertainty, European powers are seeking to keep the deal from falling apart.
To those involved in negotiations with Iran prior to the deal, exhaustion and weariness were the key sentiments fed back. Iran’s nuclear program was greatly menacing and its negotiators wily. The international community breathed a huge sigh of relief as the deal promised at least a decade of peace. To decision-makers in Iran, the deal was a necessity — the economy had begun creaking after years of isolation.
Iran’s nuclear program cost as much as $160 billion in lost oil revenues and lost foreign direct investment due to international sanctions. The figure is as high as $500 billion when including other opportunity costs. Under the deal, Iran gained access to more than $100 billion in assets frozen overseas, and was able to resume selling oil on international markets and using the global financial system for trade.
With the deal now in trouble, both Iran’s economy and Western financial interests in the country will be hurt. Such concerns are reflected in the frenzied activity of European foreign ministers seeking to keep the deal in place.
Trump’s denouncement of the “rotting deal” extends to a pledge to re-impose tough economic sanctions on Iran that will no doubt harm the carefully built peace between Tehran and the international community. EU foreign policy chief Federica Mogherini and the foreign ministers of Britain, France and Germany — signatories of the deal — have been keen to show Tehran their commitment to the deal.
Combining diplomacy with promises of economic benefits, European powers are seeking to maintain Iranian cooperation. Brussels considered the 2015 deal its greatest foreign policy coup, importantly resting on allowing business with Iran in exchange for it ceasing to obtain any capacity to build an atomic bomb. It is this compromise that European representatives sought to discuss with their Iranian counterpart in Brussels on Tuesday.
Following the meeting, the foreign ministers of the UK, France and Germany agreed on a nine-point economic plan to keep the deal in place. The plan, which has been welcomed by elements of the Iranian leadership, aims to tackle financial concerns such as business, financial transactions, and possible interruptions to oil and gas production.
With the Iranian rial in crisis, the European offer arguably comes at a good time. The currency plunged to a record low against the dollar the day after Trump announced the US withdrawal from the Joint Comprehensive Plan of Action (JCPOA).
Though the EU is the largest trading bloc in the world, it cannot feasibly rely on Russia or China for its security.
Zaid M. Belbagi
But the Europeans’ diplomatic effort is not over. They must carefully engage both sides without causing a deterioration in the already-troublesome relationship with the Trump administration. The US has often been at odds with its European allies since John Bolton’s appointment as national security adviser.
Trump denounced the nuclear accord, completed under his predecessor Barack Obama, in part because it did not cover Iran’s ballistic missile program or its interventions in Middle East conflicts, and because the deal did not outline the nature of relations following its expiration in 2025.
Simultaneously, Ali Akbar Salehi, head of Iran’s Atomic Energy Organization, has been pessimistic about European overtures, and warned that Tehran is prepared to resume “industrial-scale” uranium enrichment “without any restrictions.” In this context, Europe will have to provide solid guarantees that Iran will be able to maintain the economic benefits it gained from the nuclear agreement despite Washington re-imposing sanctions.
German Chancellor Angela Merkel has now, for the second time in a year, declared that Europe can no longer rely on the US, a sentiment that has grown across the continent since the start of Trump’s presidential term. But given the magnitude of security risks Europe faces, it cannot afford a diplomatic confrontation with the US.
Though the EU is the largest trading bloc in the world, it cannot feasibly rely on Russia or China for its security. European banks and companies do a great deal more business in the US than they will ever do with Iran. Given the very real Russian desire to divide and weaken Western alliances, European diplomats must seek to improve relations with Washington.
The nuclear deal was borne out of 12 years of cautious diplomacy, designed to a large extent in Europe. A total collapse of the deal would not only increase the likelihood of Iran expanding its nuclear program, but also encourage it to continue its regional interventionism, further destabilizing the Middle East. Europe can guide the US on Iran, but it cannot presume to lead it and thereby compromise the transatlantic relationship.
• Zaid M. Belbagi is a political commentator, and an adviser to private clients between London and the Gulf Cooperation Council (GCC).