LUXEMBOURG: European Union nations agreed yesterday on the need for a new round of sanctions — targeting the oil and gas sectors in what would be the strongest punishment yet — to discourage Tehran from developing nuclear weapons.
Word of the agreement came after British Prime Minister Gordon Brown announced at a London news conference with US President George W. Bush that Britain will freeze the assets of Iran’s largest bank — and that the EU would target Iran’s oil and gas sectors. “Action will start today in a new phase of sanctions on oil and gas,” Brown said. “We will take any necessary action so that Iran is aware of the choice it needs to make.”
Brown said Britain was urging the EU — and that Europe “will agree” — to also impose the new sanctions because of Iran’s refusal to halt the uranium enrichment that could be used for nuclear weaponry.
The EU has not yet officially announced any new sanctions.
But Cristina Gallach, spokeswoman for EU foreign affairs and security chief Javier Solana — who failed last weekend to win Iran’s support for a package of incentives — said EU foreign ministers meeting in Luxembourg were prepared to take formal action. “It is clear they are ready to move further. We will definitely take a formal decision,” she said.
The proposed sanctions — the strongest yet against Iran — would follow three sets of UN Security Council penalties Iran has shrugged off while continuing to enrich uranium. These sanctions targeting Iran’s oil and gas industries could severely affect the country’s already-fragile economy. High inflation and rampant unemployment have already damaged its economy, which is heavily reliant on natural resources. More than 80 percent of Iran’s revenues come from oil exports, and the country has the world’s second largest gas reserves. Sanctions targeting Iran’s gas and oil sectors could also have an impact on the already soaring global oil prices.
Analysts said the proposed targeting of Iran’s largest bank, Bank Melli — which does not have many investments in Europe — would have limited impact.
“The Iranians certainly have been expecting it, and likely have been preparing for ways to work around it. Unless the Europeans (are) willing to sign on to a far more dramatic sanctions package, these measures seem likely to fail,” said Justin Logan, associate director of foreign policy studies at the Cato Institute in Washington.
