Europe split in confronting the US sanctions on Iran, Washington isolated

French President Emmanuel Macron speaks after receiving the prestigious Charlemagne Prize. Aix-la-Chapelle, 11 May 2018. (French Presidency work – snapshot from a video).

Donald Trump, the ‘America First’ President in withdrawing from the Iranian nuclear non-proliferation deal, doesn’t seem to be honoring his lead electoral motto. It seems that he is serving more the interests of Saudi Arabia and to a lesser extent of Israel. Riyadh has much at stake in its inimical interaction with Iran. Israel on the other hand, despite being more verbally abused by Tehran, doesn’t run any grave dangers from the Islamic Republic. Tel Aviv is very well equipped to politically and militarily defy the Iranians, while the Saudis have to try much harder to make the most out of their oversized military machine and spending.

At the same time, the Iranian affair is to put the US relations with America’s traditional strategic allies, the Europeans, to a hard test. It’s characteristic what Richard Grenell, the new US ambassador to Germany did, only hours after Trump announced the pulled out from the Iranian agreement. He posted a tweet saying, “US sanctions will target critical sectors of Iran’s economy. German companies doing business in Iran should wind down operations immediately.” No need to report how many hundreds or thousands of negative, aggressive and even belligerent reactions he got.

United in opposition

In a rare occasion, the three big European countries, Germany, France and Britain are firmly united in opposing this Trump’s decision. As for Russia and China, who have also co-signed the Iranian Agreement of 2015, they decisively stated they won’t follow Washington’s aggressive step. Tomorrow, Tuesday, the three European ministers of Foreign Affairs are planning to meet in Brussels to seek ways to block the American sanctions on Iran, hindering the European companies doing business with Tehran. However, this may prove difficult despite the fact that the Europeans have been preparing for that. The test case will be the sale of tens of Airbus planes, which the European airplane maker has agreed to deliver to Iran.

According to Reuters, Iran rushed to ask the Europeans if the deal for the commercial aircrafts is to go ahead or Europe is backtracking on it. Understandably, all three European countries have every intention to honor this contract, since all of them have important interests in Airbus. However the American Secretary of Treasury Steven Mnuchin stated last week, that all licenses to companies delivering or intending to sale passenger aircrafts to Iran have been withdrawn, including Airbus and Boeing.

It will be very difficult for all airplane makers to ignore the American ruling, given their large exposure to US markets. The larger the exposure of a company to US, the greater the leverage Washington has on them, under the threat of sizeable fines. The only hope for Airbus to go through with its multi-billion contract with Iran, is to get an exemption from the White House.

Get exempted or evade

It’s not only Airbus though. Hundreds of middle and even small French and German companies have a strong presence in Iran or export goods to the country. Last year, France and Germany delivered goods to Iran of a value of €1.7 billion and €3.1bn respectively. The French minister of Finance Bruno Le Maire has asked Washington for exemptions for some icon French firms like Renault, Total, Sanofi, Danone, Peugeot and others. Reportedly, Paris counts on the perfect relations with Washington it has and the exceptionally good chemistry between the two heads of state.

The Germans are reacting differently but probably more effectively. Handelblatt, the German business newspaper, authentically expressing the country’s business sector, published an article entitled, “Germany to US: We’re ready for your sanctions and we’re staying in Iran”. To support this ‘statement’ it asked Michael Tockuss the President of the German-Iranian Chamber of Commerce how they plan to overcome the US sanctions.

Being set in Tehran

Tockuss had very down to earth Teuton answers: “We’re not shocked. For some time now, companies doing business in Iran have been trying to find substitutes for any US-related aspects of their supply chains. For example, European companies in Iran do not work with dollars at all; they prefer euros or perhaps dirhams. Any US staff members are excluded from Iran-related business. There have been a wide variety of preparations and many companies have been building a fence around their Iran business. As long as the German government leaves us alone, we’re staying.” This is a typical reaction of a German producer, given the solid traditions of the country’s manufacturing sector.

In any case, the European Union as a club is not to follow the US in applying the sanctions against Iran. Federica Mogherini, the European representative for external relations has made it crystal clear, the club is not abandoning the Iranian deal, for as long as Tehran continues to honor it. This doesn’t mean there won’t be some member states to slam Iran. The first candidates are Poland, under the zealous Catholic ‘Crusader’ Lech Kaczyński, President of the Law and Justice ruling party and his like companion Victor Orban, Prime Minister of Hungary.

Apart from those rather insignificant reactions, there will surely appear much more strategically important differences between the big European powers. France and Germany are already acting quite differently in preparing to cope with the soon coming far and wide American sanctions on Iran. As explained above, this is manifest when the problem touches their business relations with the Islamic Republic. In confronting the sanctions, the options of Paris and Berlin depend on the nature of their relations with Washington. In this respect France appears as cooperating with the US by asking exemptions, while Berlin plans dodging.

Macron gives notice to Merkel

Last week, Macron and Merkel met on the occasion of the French President receiving the Charlemagne Prize. In their speeches the differences were evident in respect not only to the Iranian affair but more so in relation to their visions about the future of the European Union. The German Chancellor when it came to foreign policy – an obvious reference to the Iranian problem – appeared much in need for the French support.

According to Handelblatt, she said “in a dangerous world, a common European foreign policy is an ‘existential necessity’”. No question everybody agrees with that. Yet, it’s questionable if Macron is ready to continue supporting Germany in the foreign front, as long as Berlin denies undertaking its responsibilities on the European platform. Berlin has to understand it cannot have it both ways; having the EU as an exclusive export market and a solid political base, but not taking good care of it.

 

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Featured Stings

WEF Davos 2016 LIVE: “You just don’t know if the oil price will be 20$ or 100$ in the next 2-3 years!” top Harvard economist Kenneth Rogoff underscores from Davos

What we take for granted: The EU is not perfect

IMF: How can Eurozone avoid stagnation

Close to 7,000 evacuated from Syrian towns after enduring nearly 3-year siege

Is Eurozone preparing to abandon austerity and stagnation?

Force used against protestors in Gaza ‘wholly disproportionate’ says UN human rights chief

The rise of alternative medical practices in modern sports

Look Mom, even the House of Lords says the #righttobeforgotten is not right

EU: 13 major banks may pay fines 10% of worldwide turnover

Car clocking: MEPs call for new legislation to combat odometer fraud

10th ASEM in Milan and the importance of being one: EU’s big challenge on the way to China

The EU Commission fails to draw the right conclusions about corruption

Does research make sense any more? The dire need for new ways to measure success

EU leads the torn away South Sudan to a new bloody civil war

China’s cities are rapidly becoming more competitive. Here’s why

JADE Testimonial #3: Sebastian @ Fundraising

Draghi will not hesitate to zero ECB’s basic interest rate

Travel the world, find yourself

The Franco-German axis considers that all EU needs now is more armaments

Trump goes ahead with plan to undo globalization; targets China and EU

We’ll succeed together

The Bavarians threaten Berlin and Brussels with immigration crisis

Mobile 360 Series – Russia & CIS: Empowering the Digital Economy

Rights experts call for greater protection of indigenous people during migration

Mental health of health professionals: the alter ego

The ECB ‘accidentally’ followed IMF‘s policy advice for growth and job creation by printing more money

UN, Egypt help avert another Israel-Palestine war in Gaza that was ‘minutes away’, Security Council hears

Bankruptcy or referendum: which one is going to be first?

Samsung’s profits fall as cheaper smartphones gain market share

Europe should make voice ‘more heard’ in today’s ‘dangerous world,’ says UN chief

Can Kiev make face to mounting economic problems and social unrest?

FEATURE: Niger’s girls find sanctuary in fistula treatment centres

Is the EU denying its social character favouring a banking conglomerate?

Facebook and Google to treat Europe as the 51st State of the USA

Why Eurozone can afford spending for growth

Let’s Learn

IMF v Germany: Eurogroup keeps the fight under control

Military escalation will have ‘serious consequences’ for Yemeni civilians, warns UN Special Envoy

Brexit Update: EU endorses unprecedented compromise to help Cameron out of the referendum mess he got himself into

Commission presents far-reaching anti-tax evasion measures

Merkel, Mercedes and Volkswagen to abolish European democracy

Trying to cure bank cancer with analgesics

EU elections: The louder the threats and the doomsaying the heavier the weight of the vote

Resolving banks with depositors’ money?

CDU-SPD agree the terms for EU’s Banking Union

What would happen if we removed cars from cities?

GSMA announces first speakers for Mobile 360 Series-Middle East and North Africa

Discovering Europe: Free EU rail pass for 18 year olds

Heat-resistant crops, ‘green’ infrastructure, can prepare Near East and North Africa to better tackle droughts – UN agency

Lagarde’s metamorphoses, not a laughing matter

JADE @ European Business Summit 2014: Youth Unemployment – a drive to Entrepreneurship

It’s not kids’ screen time you should worry about – it’s yours

VW emissions scandal: EU unable to protect its consumers against large multinationals

Lithuania should find its own way in the EU

The Commission sees ‘moderate recovery’ but prospects deteriorate

20th EU-China Summit in Beijing, 16/07/2018

6 ways to ensure AI and new tech works for – not against – humanity

New UN agriculture agency report underscores value of fishing in fight against global hunger

What the world will look like after the Iran and 5+1 deal; the US emerges as major power broker in Middle East

Press conference by EC Vice-Presidents Valdis Dombrovskis (left) and Jyrki Katainen, on the Commission's proposals in the framework of the financial union (Source: EC Audiovisual Services / Copyright: EU, 2018 / Photo by Georges Boulougouris)

EU Finance ministers agree on new banking capital rules and move closer to Banking Union

More Stings?

Comments

  1. Orbán is hungarian, not czech.
    Everything else is great and informative!

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s