Shoot first, ask questions later. That was the decision made by Donald Trump last week when he chose to violate and withdraw from the Iran nuclear deal. To hear U.S. and European officials tell it, the Trump administration does not have a Plan B in place, and its attempts to construct one on the fly have been a mess. Moreover, not a single treaty ally supports Trump’s decision. At face value, this amounts to an extraordinary isolation of the United States. The reality, however, is more complicated. Precisely because these dynamics remain fluid, two key uncertainties remain in the global quest to keep the Iran deal alive: Europe’s ability to have an Iran policy independent of Washington; and the degree to which U.S.-EU policy divergence on Iran will damage transatlantic relations.
While Trump, Israel and Saudi Arabia have escalated their shared hostility toward Iran, Europe has consistently pushed for cooler heads to prevail. EU foreign policy chief Federica Mogherini said that the United States has no right to unilaterally terminate the Joint Comprehensive Plan of Action (JCPOA). French President Emmanuel Macron, German Chancellor Angela Merkel, and British Prime Minister Theresa May issued a joint statement reaffirming their support for the agreement, describing it as “in our shared national security interest.” Macron went a step further, stating publicly what many European officials have told me privately: “The official line pursued by the United States, Israel and Saudi Arabia… is almost one that would lead us to war,” and this attempt to trigger military confrontation was “a deliberate strategy for some.” And this was all before Trump violated and withdrew from the JCPOA on May 8.
Since then, Trump has faced a barrage of verbal condemnation from America’s allies in Europe who remain verbally committed to the deal. Mogherini did not mince her words, saying “it seems that screaming, shouting, insulting, and bullying, systematically destroying and dismantling everything that is already in place, is the mood of our times…This impulse to destroy is not leading us anywhere good. It is not solving any or our problems.” Merkel said Trump’s decision “undermines trust in the international order,” and demonstrates that “it is no longer such that the United States simply protects us, but Europe must take destiny in its own hands.” Macron followed suit, emphasizing that it was a “pity” and a “mistake.” Merkel, Macron, and Theresa May issued a joint statement expressing “regret and concern” and urging the U.S. “to avoid taking action which obstructs its full implementation by all other parties to the deal.”
All of this begs the question: Can Europe go it alone? The short answer is: Yes, but it’s going to be a herculean task. After 15 months of Trump’s presidency, a variety of factors—from abandoning the Paris climate accords, to hedging on America’s NATO obligations, to violating and withdrawing from the JCPOA—have demonstrated to Europe a heightened degree of unreliability emanating from Washington. As a result, Europeans will likely be forced to continuously confront a set of decisions on previously shared policy approaches, including on Iran: Try to buffer and modestly move U.S. policy, or strike out on its own. European officials have privately acknowledged to me that this is a decision they may have to make ad infinitum, leading some to call for Europe to be more assertive in setting foreign policy according to its own interests rather than those of the United States. “Germany cannot afford to wait for decisions from Washington, or to merely react to them,” former German foreign minister Sigmar Gabriel stated matter-of-factly this past December before leaving his post. “We must lay out our own position and make clear to our allies where the limits of our solidarity are reached.”
One does not have to look far into Europe’s past to find an Iran policy independent of the U.S. From 1992 to 1997, the EU established a “Critical Dialogue” with Iran to address a variety of issues. From 1998 to 2002, the two parties established a “Comprehensive Dialogue” to deepen cooperation and work towards signing a trade and cooperation agreement. During Mohammad Khatami’s presidency (1997-2005), the European Union became Iran’s largest trading partner. In an interview with Iranian media, Federica Mogherini said: “We are the ones that used to be Iran’s first partner on the economic fields, on trade, investment, and we want to be back to that.”
The 1990s and early 2000s were a time when Europe not only had a different Iran policy, but also faced Dick Cheney-esque excoriations for doing so. “I can remember a conversation with Cheney when I was in Washington. I bumped into him at an embassy function, and he said to me, ‘the Iranians know what they have to do.’ That was America’s policy,” a former European ambassador to Iran explained to me. “In other words, surrender on all fronts. Change their policy on all fronts. That was the line then, and that is the line now, and Europe took a distinct stance then, and will continue to do so. I’m absolutely sure that [my] government will stay resolute behind an engagement policy.”
In all of my recent conversations with European officials, they felt their respective countries were pursuing their own policy, trying to maximize their leverage through the European Union, and use the EU as well as their own bilateral relationships in pursuit of objectives that differed from the U.S.—and they believe Europe should continue to do so during Trump’s presidency. To hear some European Union officials tell it, the future can be bright. “I definitely think as far as Europeans are concerned, we have our autonomous policy when it comes to Iran,” a senior EU official told me. “One of the great things that happened since the JCPOA was concluded is that the context of EU-Iran relations has been institutionalized. Iran is not seen as enemy anymore in the EU. It’s seen as sometimes adversarial. It’s definitely seen as a country with problems, but it also is seen as an opportunity.”
Moreover, the political changes that have taken place in Washington since Trump entered the White House have no parallel across the pond. Most European officials who helped negotiate and implement the JCPOA are still serving in their same professional capacities. Thus, it is beyond belief that they would be willing to kill an agreement which they: 1) Signed off on three years ago; and 2) Continue to assert is both working and in their shared interest. “Europe has a vested political and institutional interest in getting positive things done on Iran,” a senior EU official explained to me. “This is why we have such a lively traffic of officials traveling to Tehran, commissioners, working groups, task force, and Iranian officials coming to Brussels.” Indeed, the obstacles to more positive EU-Iran relations that existed a few years ago—both in Tehran and Brussels—have been significantly reduced precisely because securing and implementing the JCPOA has further incentivized breaking previous hostility.
To that end, the EU and Iran have exchanged numerous visits at the foreign minister level; President Rouhani made the first visit to Europe by an Iranian president in 16 years; and Mogherini has traveled to Iran with her colleagues on multiple occasions to solidify political and economic ties. The Europeans also established an Iran Task Force to boost cooperation, and EU-Iran trade increased by 94% in the first year of nuclear deal implementation.
“After the JCPOA,” a senior EU official told me, “the structure of incentives has changed completely. Therefore, I don’t think that Trump’s hostility will completely reverse EU policy.” Mogherini has been steadfast in this regard, repeatedly conveying this sentiment to her American interlocutors: “Europe feels a responsibility to engage with Iran [politically and economically]. I know this is not the U.S. policy, but it is the European policy and it will continue.”
Europeans, however, are not the only ones who believe the EU can and should keep the Iran deal alive regardless of Trump’s prerogatives. Many Americans share this view, emphasizing that Europe can have an Iran policy of its own. “Europe should be persuaded to keep the JCPOA with Iran, and we pay the price unfortunately,” a former senior U.S. official and ambassador to multiple countries told me. “I don’t like the price, but that price is less susceptible to producing conflict, but not susceptible at all to improving the deal.”
It has been clear from the outset of the Trump administration that America and Europe are not on the same wavelength. Trump abandoning the JCPOA is only the latest example—and it almost certainly will not be the last. Before Trump undercut Europeans on the JCPOA, the divide over Iran policy was painfully obvious. For example, on the same January 2018 day that the European Parliament hosted Alaeddin Boroujerdi—the chairman of the Iranian Parliament’s Foreign Affairs and National Security Committee—to discuss counter-terrorism, climate change, migration and trade, Vice President Mike Pence was in Israel telling Europeans they have to “decide whether they want to go forward with the United States or whether they want to stay in this deeply flawed deal with Iran.”
After Trump announced his withdrawal from the JCPOA, my iPhone was inundated with emails and text messages from current and former European officials expressing identical disbelief and displeasure: America is thus presenting the EU with another “you’re with us or against us” ultimatum, eerily reminiscent of George W. Bush in 2001. “Europeans are not at all allies in relation to Iran,” a former senior State Department official and U.S. ambassador explained to me. “They’re not at all on the same page, and they’re basically more annoyed by us, and our obsessions and fixations, than they are sympathetic to them.”
This sentiment becomes harder to deny with each passing day. While the Trump administration attempts to kill nuclear deals, clings to trade embargoes, and obsesses over adding new Iran sanctions to its books, Europe is seeking ways to capitalize on its long-standing interest in a more robust political and economic relationship with Tehran. The Iranians are keenly aware of this, and have doubled down on their efforts to build a successful relationship with Europe. Sustained progress on this front likely means that Trump’s effort to escalate hostilities—in scenarios not clearly provoked by Iran—will cause damage to transatlantic relations.
Even before Trump abandoned the JCPOA, Europe was already taking initial steps to assert its independence from the U.S. in unprecedented ways. 25 EU governments signed a defense pact—separate from NATO—to integrate their armed forces and lower their reliance on the United States. Giving the EU a military capability that it did not previously have reflects deep disillusionment with the United States, and to hear Western diplomats tell it, the Iran element in this decision-making should not be disregarded. After Trump slapped Europe in the face by violating and pulling out the JCPOA, European officials are openly discussing efforts to go their own way on Iran policy. French finance minister Bruno Le Marie has been the most outspoken thus far, stating that Europe must introduce a variety of countermeasures to U.S. sanctions on non-American firms doing business with Iran. It is ironic that Trump is getting a degree of the European self-reliance he claimed to want—because he has made Washington out to be unreliable and unpredictable.
Rebalancing in the U.S.-EU alliance does not change the relationship overnight, but it is a sign that a different context is emerging. This creates an opening—however small—for Iran to pursue. “If I were Zarif, trying to figure out where Iran should go, the last thing on Earth I’d worry about is trying anything with Washington or Riyadh at this time,” a former senior State Department official and U.S. ambassador told me. “I’d try to flank them by working with the Europeans.”
Europe has made clear that it will go to great lengths to save the Iran deal and avoid a cycle of escalation that could lead to war. European efforts to cooperate with Trump’s team on issues outside of the deal—ranging from Iran’s regional policies to its missile program—in return for full American compliance with its JCPOA commitments failed because Trump never wanted them to succeed. Europe now must conduct a delicate degree of balancing as Tehran continues to verifiably fulfill its end of the nuclear deal: To keep the agreement alive, Iran must receive concrete guarantees that it will receive the economic benefits that it was promised—which in turn requires Europe to enact measures of economic protection for its businesses from U.S. sanctions. And therein lies the rub. There are important caveats to any independent European policy on Iran.
For starters, the predominant school of thought in the Trump administration is wildly aggressive, seeking to strong-arm Europe into adopting Trump’s hardline position due to a belief that when forced to choose, the EU will side with Washington. This presents European governments with a significant dilemma: Any continued efforts to build a common approach with the U.S. will almost certainly fail, and a re-imposition of U.S. sanctions that were lifted as part of the JCPOA is around the corner. Indeed, European business efforts in Iran have already encountered a litany of problems. European subsidiaries to American firms are only capable of doing business with Tehran when it does not involve American citizens. There is no capacity in the international system to use U.S. dollars as a method of exchange in doing business with the Iranians. Major EU banks are refusing to work with Iran for fear of steep U.S. sanctions and corresponding fines. All of these problems stand to worsen while adding an unprecedented layer of complexity to the equation.
Thus, any independent EU policy on Iran will come down in large part to how much European governments can and will do to shield their businesses and financial institutions from the extraterritorial reach of the U.S. Congress and Treasury Department. In other words, Europe will have to, through its own legislative means, take additional steps to provide an unprecedented degree of shielding—literally creating political and economic infrastructure that does not currently exist. Anything short of that likely will result in European private sector institutions either avoiding Iran like the plague, or running afoul of unilateral American sanctions and losing business ties in the U.S. as well as billions of dollars in potential fines.
A key question, then, is whether EU governments can construct the necessary incentive structure to make their companies and banks comfortable with doing business in Iran. In my conversations with European companies, they are not happy with the conflict of law situations they are being thrown into by the United States. Thus, they are more comfortable with a separate EU policy that provides remedial support from their governments to make companies feel more secure. That is the crux of the matter: Europe is more than capable of having an independent Iran policy, but if they cannot keep their companies invested, either through giving them back-stopping or by threatening to punish the United States, that is where everything falls apart.
Even before Trump abandoned the JCPOA, Europe took some initial steps to that end. European governments have actively encouraged businesses to work with Tehran, and explained that doing so is legal and legitimate with the proper due diligence. While it is up to the companies to make the final decision on whether to pursue business in Iran, some have been willing to engage and governments have taken steps to facilitate the process. Austria’s Oberbank established a credit line worth up to 1 billion Euros with Iranian banks for Austrian companies to invest in Iran. France’s state investment bank has earmarked up to 500 million Euros a year into French businesses in Iran. It also agreed to offer Euro-denominated export guarantees to Iranian buyers of French goods and services. There is reportedly a pipeline of approximately 1.5 billion Euros in potential contracts from interested French exporters. Denmark’s Danske Bank established a 500 million Euro line of credit for deals involving some of Iran’s largest banks. And Denmark’s export credit rating agency guaranteed 100 percent of the financing of export deals—including against U.S. sanctions. The fact that medium-sized companies are pursuing business despite geopolitical instability and risk speaks to Europe’s clear interest in the Iranian market regardless of American preferences. Thus, there is a limit to how much damage Trump can do to European-Iranian relations without also doing serious damage to U.S.-European relations.
This is particularly true as the Trump administration prepares to unilaterally re-impose sanctions that were removed as part of the JCPOA, thereby trying to force Europe to choose: Cower to Trump or engage in a degree of brinkmanship with the United States. In the 1990s, Europe passed blocking legislation on U.S. secondary sanctions that were aimed at punishing companies that made energy investments in Iran. Rather than obey American diktats, European governments told their companies that they should not comply with U.S. sanctions, and the EU would protect them accordingly. Europe also told the Clinton administration that if it pulled the trigger on such sanctions, they would take America to the World Trade Organization (WTO) and engage in retaliatory sanctions. With the EU saying that it intends to press ahead in terms of making investments and engaging in trade with the Iranians, it is also clearly stating that it views the re-imposition of U.S. secondary sanctions as a capriciously hostile move—hence the aforementioned threats of its own regarding counter-measures.
Looking ahead, the key question is whether the Trump administration is willing to start a full-fledged trade war with Europe. And let’s be clear: It would be economically suicidal to do so. However, Trump does fancy himself an economic nationalist, so it is difficult to know for sure whether he might take the bait being served up by John Bolton and other ideologues on his national security team. If you assume a rational actor model, then America will blink. But with Trump, we may not be dealing with a rational actor. The degree to which Trump is actually prepared to punish a litany of European companies remains unknown. On the one hand, a self-described dealmaker who delivered a $1.5 trillion dollar tax cut for American businesses would seem among the least likely to damage U.S. business interests in Europe. On the other hand, this would not be the first instance in which Trump’s “America First” stance damaged both U.S. and EU interests.
U.S.-EU divergence on Iran policy is already clear, but the depth and scope of damage caused by this divergence going forward will depend entirely on Washington’s actions. In other words, it has become a sliding scale: The more hostile that Trump’s actions become, the more damage that will ensue—and the more likely Europe is to retaliate. The path ahead looks increasingly treacherous. Historically, since 1945, there have been significant occasions where Europe and the United States have diverged. The Vietnam War and 2003 Iraq War are prime examples. Politically, transatlantic relations suffered for a few years, and French fries were temporarily renamed “Freedom fries” in a rebuke to France, but no lasting damage was done and considerable overlap on policy matters remained.
This time, however, may be different. With Trump following through on his threat to leave the JCPOA and re-impose secondary sanctions, he is now trying to bully Europe into ignoring a UN Security Council resolution enshrining the nuclear deal—and instead surrendering to his bad faith desecration of international law. It is hard to see how such U.S.-EU policy divergence would avoid deeply damaging transatlantic ties. The concept of a rules-based world and effective multilateralism defines the foreign policy identity of the European Union. Trump’s deviation from that makes Europe less likely to count on the United States as much as it has in the past. As these things continue to happen, the transatlantic link is going to weaken. If Washington does not recognize that and take immediate steps to accommodate it, the United States is going to be in trouble.
As Europe seeks to diversify its geopolitical and economic relationships, the JCPOA provides unique opportunities to forge closer ties to Iran that can help prevent both military confrontation and the nuclear deal’s demise. The question is not whether the EU should pursue these objectives, but rather the best way to do so. Thus, Europeans should consider the following:
1) Open a EU Office in Tehran
To the credit of European diplomats, efforts to do so have commenced under the leadership of foreign policy chief Federica Mogherini, as well as with public support from the European Parliament—but have not yet yielded concrete results. While the EU has demonstrated its political will to achieve this objective, the best it has been able to do thus far is send diplomats to Tehran for weeks at a time every month. To that end, the merits of establishing a EU office are relatively straightforward. The symbolism is a clear sign of Europe’s commitment to deepening bilateral relations, and having people on the ground provides irreplaceable insight into what is going on inside Iran.
As the U.S. government’s 39-year absence of an embassy in Tehran repeatedly demonstrates, the quality of information gathering and country assessments cannot be replicated through intelligence or open-source information. Analyzing local developments requires a deep understanding and appreciation of the issues, culture, and pulse of Iran’s government and people. The personal contacts and interactions that a EU office will facilitate provide a more accurate assessment of local opportunities, risks and developments—all of which gives Europe a huge competitive advantage vis-à-vis Washington.
To hear senior Iranian officials tell it, the key obstacle to opening an EU office are hardliners who believe it will be used as an outpost to pressure Iran on human rights issues in ways that Europe does not when it comes to Saudi Arabia and other chronic human rights abusers in the region. This is not an insurmountable obstacle. Empowering like-minded Iranian counterparts to win this domestic debate can likely be achieved by applying standard human rights metrics and enforcement to all countries, and putting this in writing as official EU policy. Doing so will demonstrate to Iran that it is not treated any differently than Saudi Arabia, Israel, or the UAE.
2) Appoint a EU Senior Advisor for U.S.-Iran Conflict Prevention
The EU is already well positioned to assess Iran-related matters from a position of strength vis-à-vis a U.S. government that has no eyes and ears on the ground. Opening a EU office in Tehran will solidify its comparative advantage. In order to institutionalize and capitalize on this momentum, Europe should appoint a Senior Advisor for U.S.-Iran Conflict Prevention that reports to Mogherini—preferably selected from a country with a reputation for peace building, such as Sweden. Based out of the EU’s Tehran office, the Senior Advisor should regularly travel to Washington for consultations, and publish quarterly reports that document provocative actions taken by both sides and the necessary steps to reduce tensions.
By creating a senior European official whose mandate is preventing U.S.-Iran conflict, Europe will send a powerful message to both capitals. The former will see an EU that seeks to create stronger ties to Iran by playing the role of balancer rather than taking sides—thereby creating goodwill and loyalty amongst Iran’s government and people. The latter will see an EU that refuses to be strong-armed into adopting hostile U.S. policies that contradict European political, economic, and security interests—thereby signaling to Washington that it risks going it alone if diplomacy continues to be abandoned and a march to war commences.
3) Establish a EU-Iran Strategic Partnership
With a Tehran office and conflict prevention envoy locked in, Europe will have the building blocks in place to fast-track negotiations with Iran on a strategic partnership, using similar agreements with India, Brazil, China, and seven other nations as a model. Negotiations over a comprehensive political, trade, and security agreement will confirm the EU’s willingness to deepen and create a stronger framework for cooperation with Iran. Formalizing its acknowledgement of Tehran’s role as a regional power pivotal for resolving security challenges will help safeguard core EU interests and objectives.
While Europe’s strategic partnerships are underpinned by different political and legal frameworks, the metric applied to Iran should be as similar as possible to those already on the books. Creating such harmonization will demonstrate to Iran that its goodwill will be reciprocated, which in turn rewards Europe’s devotion of negotiating resources and energy by giving it a greater global sway as Washington’s interests vis-à-vis Tehran diverge. The economic aspect of a strategic partnership with Iran will boost EU competitiveness in a globalized economy as well as spread its established norms and standards. The political and security aspects will enhance cooperation on a number of key issues, including but not limited to: counter-terrorism, cybersecurity, non-proliferation, maritime security, climate change, development, and avoiding war—all of which empowers Europe as a global security guarantor at a time when Trump’s America retrenches.
4) Update and Reinstate Blocking Regulations
As Congress continues to consider new sanctions targeting Iran that violate America’s JCPOA obligations, the EU should take immediate steps to amend Council Regulation (EC) No. 2271/96 to add those U.S. sanctions whose application was ended pursuant to the nuclear deal. This regulation was instituted following Congress’s passage of the Iran-Libya Sanctions Act (ILSA), which imposed sanctions on foreign parties investing in Iran’s energy sector and inaugurated European frustration with U.S. attempts to impose sanctions on an extraterritorial basis.
Formal amendment of Council Regulation (EC) No. 2271-96 would have the express purpose of guarding against efforts of the Trump administration to impose sanctions on Iran inconsistent with America’s JCPOA obligations. Because such U.S. sanctions would have extraterritorial application and would run interference on EU attempts to develop and strengthen commercial relations with Iran, this amendment would be for the express purpose of: A) Insulating the JCPOA from U.S. attempts to torpedo on the agreement; and B) Protecting European interests in developing a multi-faceted relationship with Iran. The institution of new U.S. sanctions provides a ready basis for the EU to assert its prerogatives vis-à-vis the JCPOA.
5) Help Facilitate Iran’s FATF Compliance
The European Union should encourage member states to provide the technical expertise required for Iran to amend its anti-money laundering and countering the financing of terrorism (AML/CFT) regime to ensure it has the opportunity to come into full compliance with the global standards promulgated by the Financial Action Task Force (FATF). So long as Iran remains on FATF’s “blacklist,” the willingness of first-tier EU financial institutions to engage their Iranian counterparts will be exceptionally limited, thereby continuing to frustrate European efforts to develop and strengthen normal, sustained commercial relations between the EU and Iran.
Such measures should include EU-wide encouragement of private parties to lend their technical expertise over AML/CFT compliance matters to Iranian banks seeking to put into practice amended Iranian laws and FATF recommendations. To the extent necessary to ensure the provision of such technical expertise, the EU should encourage the United States to provide legal authorization for American citizens to engage in the provision of such technical expertise, particularly insofar as the willingness of European firms to engage Iranian parties in these matters may be dependent on limiting the costs of U.S. sanctions compliance.
6) Instruct European Central Banks to Process Iran-related Payments
Perhaps the biggest roadblock to full implementation of the JCPOA is the ability of Iran to attract foreign investment by way of access to capital. In a world of global banking infrastructure interconnectivity, access to financing for major industrial projects requires prime banks to provide capital at competitive interest rates. Iran is currently viewed by many as having too much “political risk” associated with investment, but this is not often the reason why European banks decide to turn down Iranian business. They do so under the pretense that major European financial institutions are so intertwined with American financial system, be it as counterparty to transactions with American banks or holdings of U.S. dollar reserves. This exposure and the legal compliance that accompanies it has limited the appetite for prime European banks to jump into the Iranian market, despite Iranians longing to embrace European companies for their technological expertise and global reach.
For Europe to regain its footing in Iran, the European Central Bank (ECB) must look to support small to midsize banks under its regulatory authority that have no (or very little exposure) to the U.S. financial system. The ECB along with the CBI (Iranian Central Bank) should designate a few Iranian and European banks as certified to carry out trade and investment for EU companies in Iran. These banks can then have as their counterparty Iranian banks that meet EU regulatory and standards for best practices (as well FATF) and have the backing of the CBI in Tehran. This “safe banking zone” can expand over time as both Brussels and Tehran become comfortable and see that it is working to their satisfaction. The EU needs to expand from banks that only operate as clearinghouses for Iran related transactions and also encourage these banks to underwrite trade and investment with Iranian counterparties. If these banks feel comfortable in the backing they receive from Brussels and the correct financial incentives are in place, it would be a victory for the EU’s commercial aspirations in Iran, help Iran derive the economic benefits promised in the JCPOA, and aid Europe’s efforts to mitigate continued U.S.-Iran conflict escalation.
7) Establish a Joint EU-Iran Bank
Perhaps the boldest step Europe and Iran should take is to create a EU-Iran bank with no ties to the U.S. banking system. Such a bank could be a 50-50 joint venture with multiple Iranian institutions that meet stringent compliance requirements (shareholders are Iranian nationals or companies that are not on UN, U.S. or EU sanctions lists) along with European stakeholders who wish to participate. The bank would be capitalized with Euros, receiving license to operate both in the EU and Iran by the respective central banks of each. Its board would maintain a rotating chairmanship between the two sides every two to three years, which would cast deciding votes on issues. However, the better route for the EU to take is to have a majority stake in the bank to always maintain the chairmanship so as to insist on the highest level of compliance and make sure it directionally can control the bank and safeguard it from allegations that it is being run by nefarious Iranian interest—as is so often the case from U.S. institutions against Iranian banks.
The purpose of such a bank would be like the banking channel: to make sure EU companies have a mechanism where they can invest in Iran, access financing, and repatriate proceeds of income they generate from Iranian business back to Europe. Iran could also start processing transactions and accessing trade finance more easily than is the case today. All letters of credit issued by Iranian counterparties would be in Euros or Swiss Francs. The European shareholders would be smaller financial institutions with little or no exposure to the U.S. banking system.
8) Right-size Expectations on Ballistic Missiles
The EU should submit a request to Tehran for dialogue without preconditions on Iran’s ballistic missile program as a component within the aforementioned Strategic Partnership. Europeans honed in on this issue while trying to prevent Trump from abandoning the JCPOA, but they should proceed carefully and avoid cutting off their nose to spite their face. An Iran that fully implements its JCPOA commitments is clearly not working to deploy ballistic missiles designed to carry nuclear weapons—because it has rejected the motive of deploying such weapons. Moreover, Iran has unilaterally announced the limitation of its ballistic missile range to 2,000 kilometers. While this gives Tehran regional reach, Saudi Arabia’s missiles have a range of approximately 4,000 kilometers, and Israel’s missiles are equipped with nuclear weapons.
Therefore, Western arms exports to Riyadh, Tel Aviv, and Abu Dhabi should be re-evaluated because the context for security and conflict in the region has clearly changed since Trump entered office. For example, missile sales to Saudi Arabia are typically seen as a normal aspect of partner reassurance. In the current climate, however, it is far more destabilizing and escalatory. Arming these countries to the teeth makes the EU’s ballistic missile efforts vis-à-vis Tehran less likely to succeed—particularly when each of their defense budgets dwarfs Iran’s. The Iranians now view such sales as the EU undermining their security, given the increased threats they face from Saudi Arabia, Israel, and the UAE. A wiser course of action for Europe would be to follow Germany’s lead and halt weapons exports to Saudi Arabia until their hostile regional policies cease.
Can Europe save the Iran deal? Yes. Will doing so require a demonstration of political and economic independence from United States not seen this the end of World War II? Yes. Facing this daunting reality, skepticism is understandable and dissent within the EU is likely. Few would envy the dilemma facing Europe. However, the decisions it makes today will cement the realities of tomorrow. Europeans must learn the right lesson from their failed negotiations with Trump’s team over the past year: Trump is a bully, and if you give him an inch, he will take a mile. Europe can push back in pursuit and protection of global interests, or it can continue to get pushed around to its detriment. Europeans did not ask to be put in this position by Trump, but here we are. In the days and weeks ahead, as Europeans deliberate over whether or not to take a stand, they should keep one question in the front of their minds at all times: If not now, when?
Reza Marashi is research director at the National Iranian-American Council. He previously served in the Office of Iranian Affairs at the U.S. Department of State. His articles have appeared in the New York Times, Foreign Policy, Atlantic, and National Interest. On Twitter: @rezamarashi.
Subscribe to Our Newsletter