Europe’s Bad Iran Bet Like the mullahs, the Euros think they can outlast Donald Trump.
https://www.wsj.com/articles/europes-bad-iran-bet-1537916797
President Trump will lead a United Nations Security Council session Wednesday on weapons of mass destruction and Iran, and European leaders are signaling that they’re more than willing to disagree with the U.S. Meanwhile, Europeans are looking for ways to duck U.S. financial sanctions—without much success.
On Monday European Commission foreign-affairs chief Federica Mogherini unveiled a new “special-purpose vehicle” to facilitate trade with Iran after U.S. sanctions go back into effect in November. Restoring Iran’s access to the global financial system and trade was a central plank of the 2015 nuclear pact. Ms. Mogherini and the three European co-signers of the deal—Germany, France and Britain—have been scrambling to keep those commercial benefits and they view trade as the main carrot for Tehran to comply.
Recent months have shown what a diplomatic mistake this has been. European companies have withdrawn from Iran to avoid U.S. sanctions, despite the European Union’s so-called blocking statute barring compliance with this U.S. pressure. Access to the U.S. market and financial system are too important no matter how noisily European diplomats complain about the Trump Administration.
Brussels also hasn’t found a financial workaround for Iranian trade. Vague proposals to establish direct links between Iran’s central bank and its European counterparts to move euros have faltered in part because European central banks and finance ministries worry about Iran’s money laundering.
The same concern hinders German Foreign Minister Heiko Maas’s aspiration to develop a European alternative to the global Swift system for exchanging transaction messages between banks. Belgium-based Swift is likely to be included in the next U.S. sanctions, which would cut off Iran’s banks from most of the world. But developing an alternative could make it harder for Europeans to track terror financing and money laundering.
There’s no evidence that Monday’s idea would work any better. Ms. Mogherini said technical experts are working on the details, but the special-purpose vehicle is supposed to facilitate barter in which Iran would exchange oil for foreign goods perhaps without using cash to settle the trades. This might dodge financial sanctions, but it is too cumbersome to handle much trade. And it would still antagonize Washington.
The puzzle is why Europe insists on sticking so doggedly with Barack Obama’s 2015 nuclear deal. European leaders know the deal is flawed. French President Emmanuel Macron laid out many of the weaknesses in his visit to Washington this year: It ignores Tehran’s ballistic-missile program, turns a blind eye to Iran’s military adventurism, and includes a sunset after which Iran could sprint to a bomb. Apparently they can’t bring themselves to agree on anything with the Trump Administration.
Europe would get better results—and maybe a better deal with Iran—if it coordinated with Washington to apply pressure on Iran to reopen the 2015 deal. Iran will refuse to talk as long as the mullahs think they have Europe on their side. Maybe Europeans think they can outlast Mr. Trump and restore the deal’s terms with a new President in 2021. But opposition to Iran’s nuclear and imperial ambitions is bipartisan in Washington. And there’s always the chance that Mr. Trump could win again.
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