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Europe can still save the Iran deal. Here's how.

“The time for pleasantries and accommodation is truly over now.”

by Tim Hume
May 9 2018, 1:24pm

Donald Trump’s announcement Tuesday that he is pulling the United States out of the Iran nuclear deal created geopolitical shockwaves, and left the future of the landmark agreement hanging by a thread.

The other signatories to the deal — Iran, Britain, France, Germany, China and Russia — have said they intend to stick to the agreement. But critics, including emboldened hardliners in Iran, argue the deal can’t hold without the backing of the world’s leading power. The Joint Comprehensive Plan of Action may well be dead in the water.

What have the signatories said?

The 2015 agreement, signed by the so-called P5+1, lifted sanctions on the Islamic Republic in exchange for curbs on its nuclear program, with the goal of stopping it developing a nuclear bomb.

Calling the deal “a great embarrassment to me as a citizen and to all citizens of the United States,” Trump announced Tuesday that he was pulling out of the accord and reimposing “the highest level” of economic sanctions against Iran. Any country that helps Iran develop its nuclear program going forward would also face sanctions, he added.

Despite these threats, the other signatories have insisted it can continue without the Washington. Britain, France and Germany issued a statement reaffirming their commitment, saying: “Our governments remain committed to ensuring the agreement is upheld, and will work with all the remaining parties to the deal to ensure this remains the case.” France’s Foreign Minister Jean-Yves Le Drian said he and his British and German counterparts would meet with an Iranian delegation on Monday to address the situation, while the French and Iranian leaders will speak by phone Wednesday.

Russia’s Foreign Minister Sergei Lavrov said Wednesday that his government remained committed to the deal, while China’s special envoy to the Middle East, Gong Xiaosheng, told a news conference in Iran that the agreement promoted security.

“Having a deal is better than no deal. Dialogue is better than confrontation,” he said.

Iran’s President Hassan Rouhani also vowed to stay in the pact. “The nuclear deal will continue if Iran’s interests are assured,” he tweeted

Could it survive without America?

There is a chance the deal can still survive without the U.S., analysts told VICE News. But achieving this would require Europe to forcefully and openly push back against Washington’s threats of sanctions against foreign companies that continue to trade with Iran.

“The time for pleasantries and accommodation is truly over now,” Ellie Geranmayeh, senior policy fellow at the European Council on Foreign Relations, told VICE News. “A P4+1 arrangement is workable, but it requires an extensive degree of political will and capital from Europe.”

At the crux of the issue is whether European powers can push back to protect non-American companies trading with Iran from the threat of so-called “secondary sanctions” from the U.S, which target international companies with operations or investments in the U.S. This arrangement would allow international companies to continue trading with the Islamic Republic, delivering Tehran economic benefits that would encourage it to continue adhering to the deal.

“When you have the U.S. ambassador in Germany coming out with a statement that all German companies have to stop doing business with Iran immediately — we’re in uncharted territory here.”

While the roadmap for how the reintroduced sanctions would affect other countries and companies doing business with Iran is yet not clear, the message from the White House has been unambiguous. Trump’s hawkish national security adviser John Bolton warned Tuesday that European companies doing business in Iran faced a six-month deadline to wind up their investments, or risk facing American sanctions; Richard Grenell, the new U.S. ambassador to Germany, tweeted that German companies doing business in Iran “should wind down operations immediately.”

In the face of such threats, Geranmayeh said the only path ahead was for European signatories to the deal to push to secure guarantees that certain sectors of trade activity could be protected from the threat of U.S. sanctions. If the Trump administration refused to budge — as the tough rhetoric implies is a strong possibility — then European countries would need to threaten countermeasures, potentially including threats against American companies operating in European jurisdictions if required.

READ: Obama is super pissed that Trump killed the Iran deal

“When you have the U.S. ambassador in Germany coming out with a statement that all German companies have to stop doing business with Iran immediately — we’re in uncharted territory here,” she said.

“There needs to be talk of countermeasures — if there is a weaponization of U.S. secondary sanctions, we will do x, y and z, and they need to have teeth to them. The middle ground is only going to reached if the European nations are assertive in their the political conversations with the U.S.”

There are already signs that a more robust European approach is underway. AFP reported Wednesday that plans were being developed in Brussels to introduce measures blocking U.S. sanctions, while France’s Economic Minister said it was unacceptable for the U.S. to act as the “the economic policeman of the planet.”

Geranmayeh said there was no guarantee that such efforts would be enough to save the deal — but it was the only option on the table.

“I think America is on the offensive now and we don’t really have a precedent for this in trans-Atlantic sanctions policy,” she said. “I don’t know whether this will be effective in changing the President’s attitude, but it’s now the only option left on the table other than Europe completely folding to U.S. strategy over Iran.”

How is the U.S. decision playing out in Iran?

Trump’s decision to pull out of the deal has also weakened the hand of Iranian moderates and boosted the arguments of hardline factions who have long opposed the contentious agreement.

Anger over the announcement was on display in Iran’s parliament Wednesday, where lawmakers burned a text of the nuclear agreement along with an American flag, chanting, “Death to America.”

While Rouhani has said he will stay in the deal if it continues to serve Iran’s interests, he also warned his country could resume uranium enrichment “without limit” if the agreement fell apart completely.

Sanam Vakil, associate fellow at Chatham House, said the disintegration of the deal threatened to leave Rouhani marginalized and his legacy of engagement with the international community undermined. “Rouhani will be marginalized, his legacy will be rendered dead and hardliners will use that to reinvigorate and reconnect with the Iranian electorate,” she told VICE News.

But Geranmayeh said while the developments would weaken Rouhani, Iran’s leaders were likely to give the other signatories time to see if they could salvage the deal. “There’s a clear consensus from the ruling establishment that they need to give some time to see what they can get from the rest of the international community.”

Cover image: Donald Trump signs a document reinstating sanctions against Iran after announcing the US withdrawal from the Iran Nuclear deal, in the Diplomatic Reception Room at the White House in Washington, DC, on May 8, 2018. (SAUL LOEB/AFP/Getty Images)