European corporations that eagerly embraced the Iran nuclear deal three years ago with euro signs in their eyes may find it a little awkward to fulfill some of those multi-billion contracts they signed with the evil regime.
The U.S. has refused to grant exemptions to European governments and corporations from new sanctions Washington has placed on the Tehran regime.
The United States has rejected an appeal from Britain, France and Germany to grant broad exemptions to European firms doing business in Iran, saying it would press ahead with sanctions intended to exert “unprecedented” economic pressure on the Tehran regime, U.S. and Western officials told NBC News.
Replying to a June 4 letter from the European powers, Secretary of State Mike Pompeo and Treasury Secretary Steven Mnuchin wrote that the Trump administration would not agree to wide-ranging protections for European companies operating in Iran and instead would grant only limited exceptions based on national security or humanitarian grounds, the officials said.
The stern message comes as the White House has ratcheted up its rhetoric toward Iran, accused Tehran of plotting terrorist attacks in Europe and vowed to hammer the country’s economy.
Before the sanctions were lifted by the Obama administration, Iran was on the ropes financially. Sky-high unemployment, ruinous inflation, and economic malaise led to unrest and dissatisfaction with the ruling mullahs.
Then, the tens of billions of dollars in assets handed over to the terrorist regime by Obama, followed by more billions in contracts signed by Europe’s biggest corporations, staved off disaster for Tehran. Now, the Trump administration wants to put the pressure on the Iranians again and our friends in Europe are howling in protest.
Last month, the foreign and finance ministers of Britain, France and Germany wrote to their counterparts in Washington saying their governments believed the Iran nuclear deal was worth preserving as it offered the best chance of preventing a nuclear-armed Iran. And they asked the United States not to take action to prevent them from providing sanctions relief to the Iranians as promised under the accord.
In their letter, the ministers said they expected the United States — as a close ally — not to enforce sanctions against EU companies doing business in Iran. And the ministers asked the United States to refrain from punishing firms in certain commercial sectors, including energy, auto manufacturing, aviation, infrastructure and pharmaceuticals.
Without some protections from Washington, most major European companies will have little choice but to pull out of Iran, as they can’t afford to lose access to the much larger U.S. market or to jeopardize their ability to finance deals in U.S. dollars.
The key is denying Iran access to the international banking system by severely restricting the flow of dollars into the Iranian central bank. No dollars, little international business. It’s the most effective weapon the U.S. has and Trump just told the Europeans to go climb a tree.
Once again, the Iranian economy is in crisis and U.S. sanctions are only going to make the situation worse. Is collapse far off? The Iranians have proven to be geniuses at avoiding sanctions, so it’s probable that they will be able to cheat just enough to get by. But the people are restless and some kind of economic shock could set off more waves of protests that would threaten the mullahs’ hold on power.