Squeezing Iran: The European Connection

Negotiations on Iran’s nuclear program are due to start again shortly, and once again the European Union is called upon as a “mediator.”  This is no minor challenge.  With Iran insisting on discussing Israel’s nuclear capacity and the United States preparing a tougher uranium swap agreement, a deal seems as far away as ever.  Nevertheless, the EU, a lead negotiator since 2002, is a trusted US ally as well as Iran’s most important trade partner, so no actor appears better placed to broker a mutually beneficial agreement.  But is the EU still willing to play the part?

From Mediation to Confrontation

Up to 2004, EU mediation appeared rather successful.  Iran had acknowledged Western concerns over its nuclear intentions, temporarily and voluntarily suspended uranium enrichment, and opened up to more stringent inspections.  In turn, the EU recognized that suspension was not a legal obligation under the Non-Proliferation Treaty (NPT) while welcoming it as a voluntary confidence-building measure in the process of verifying Iran’s commitment to peaceful nuclear technology.  Neither the United Nations nor the International Atomic Energy Agency found proof of a nuclear weapons program, and the way seemed paved for a comprehensive agreement.  In a surprise move, however, the EU suddenly abandoned its mediating stance and agreed on a common Iran strategy with then US president George W. Bush.  The EU’s 2005 proposed Framework for a Long-Term Agreement bluntly asked Iran to go beyond its NPT obligations and renounce pursuit of any nuclear fuel-cycle activities.  Changing the legal basis of the negotiations, away from the NPT, guaranteed, ex ante, Iranian refusal of any “generous” proposal.  Over time, incentives offered to Iran in exchange for abandoning its nuclear activities were gradually decreased as well.  The 2005 Framework still promised Iran support for its World Trade Organization candidacy and facilitated access to advanced technologies and spare parts for civil aviation.  It also guaranteed enhanced trade relations, recognized Tehran’s role in Iraq and Afghanistan, and spoke of a possible regional security agreement.  In the 2006 5+1 Package, in contrast, security guarantees virtually disappeared.  In exchange for accepting rigorous inspections and suspending uranium enrichment, the 5+1 Package offered little more than a “conference to promote dialogue and co-operation.”1  Promises of economic cooperation were now worded far more vaguely as “improving Iran’s access to the international economy,” “the possible removal of restrictions,” and “possible access to US and European agricultural products, technology and farm equipment.”2  The June 2008 Package was no better.  It even explicitly suspended Iran’s rights under the NPT until international confidence in its nuclear program would be restored while disregarding Iranian concerns about the Israeli nuclear arsenal.  Rather than trying to work out a mutually beneficial solution, it seems Brussels used its position in the negotiations to maneuver Tehran into a corner and make sanctions “unavoidable.”

In this carefully orchestrated scenario of increasing demands and decreasing incentives, Iran’s 2009 acceptance of the West’s uranium-swap proposal caught the EU, and indeed the whole West, by surprise.  In order to avoid an agreement, European leaders virulently denounced Iran’s request for guarantees on when and how its uranium would be returned and joined the US in a rush to sanctions.  Even when a nuclear swap deal was officially brokered by Brazil and Turkey, the EU still refused to take “yes” for an answer.  Jason Ditz quite accurately observed that “in the long run it seems the only objection to Turkey’s deal was that it stood in the way of the sanctions, which seem to have been an end unto themselves.”3  Indeed, not satisfied with UN Security Council Resolution 1929, the Union approved “by some way the most far-reaching sanctions adopted by the EU against any country.”4  These decisions indicate a major shift in EU foreign policy.  Long reluctant to adopt coercive measures, the EU has today become one of the most ardent advocates of crippling sanctions.  What underlying policy objective led to this policy shift?

Making Sense of Sacrifice

Whatever the objective may be, it must be important enough for Europe to sacrifice its economic interests.  In 2007, the German Finance Ministry calculated that tough sanctions on the Iranian economy could cost Germany over €2 billion.5  Even more striking than the strictly financial cost is the loss in market share.  Laurent Maillard, writing for AFP, describes how Western sanctions have opened the way for Chinese companies.  Between 2006 and 2007 EU-Iran trade decreased by around 7 percent.6  Italian-Iranian trade, still on the rise in 2007, equally dropped from €6 billion to less than €4 billion in 2009.  Over the same year, German-Iranian trade dropped another 5.8%.  Although EU trade with Iran increased again by around 10% during the first half of the current year, this was mainly a consequence of changes in oil prices and exchange rates on the one hand and a lack of compliance with political directives on the other.  The Italian government for example vouched that Italy’s bigger companies had suspended their transactions and that the rise concerned primarily small and medium business owners not tied to the government.  In turn, Chinese competitors, such as ZhenHua Oil, are steadily replacing EU companies.  Significantly, and in sharp contrast with EU sanctions, a Russian-Chinese partnership between Lukoil and Zhuhai Zhenrong resumed fuel supplies to Iran just a few weeks after the EU adopted its latest unilateral sanctions.

Iran’s nuclear stance is unlikely to warrant the new policy.  Even while nuclear talks were still ongoing, EU member states were already pushing their national companies for divestment.7  Concern over Iran’s nuclear program simply fails to justify these economic sacrifices.  For all the hysteria surrounding it, there still is no proof of a military nuclear program.  And even if such a program existed, knowledgeable experts such as Martin van Creveld and General John Abizaid, as well as Israeli policy-makers Ehud Barak and Tzipi Livni, have all admitted that an Iranian nuclear weapon poses no real threat to Western security interests.8  Western nuclear superiority is such that an Iranian bomb would have a deterrent effect at most.  In fact, rather than destabilize the region, an Iranian nuclear weapon might actually re-stabilize it by neutralizing Israel’s comparative advantage.  Like the 2003 Iraqi WMD crisis, the Iranian nuclear crisis is hence very much an artificially created crisis.

If not Tehran’s nuclear stance, what then explains Europe’s change of heart?  The answer dates back to 2003.  The Iraq war accentuated the fragmentation of EU foreign policy formulation.  The Union simply split down the middle: France and Germany led the anti-war bloc, while the UK, Spain, and Central and Eastern European countries aligned with the US.  In order to defend its interests in the world, the EU desperately needed a unified and autonomous foreign policy, yet the first serious Franco-German attempt at such a policy had failed utterly.  Not only did Europe appear more fractured than ever, with EU-US relations at an all-time low, Washington made clear that it would not tolerate an independent EU military planning centre separate from NATO’s SHAPE (Supreme Headquarters Allied Powers Europe).  General Henri Bentégeat, then President of the EU Military Committee, suggested a way out: “if France normalizes its relations with NATO, European defense projects will become easier to progress.”  And indeed as France reintegrated itself into NATO’s military command, the EU Lisbon Treaty set up stronger military cooperation between EU member states, incorporated a European mutual defense clause, and created a single representative for Foreign Affairs and Security Policy to whom EU military chiefs report.  In international affairs as well, the Union decided to take one step back: from a more independent stance on Iraq, Brussels returned to bandwagoning with the US on Iran.  Sarkozy sought to square the circle thus: “The more we are friends with the Americans, the more we can be independent.”9

Reaffirming transatlantic relations is hardly the only motive behind Europe’s change of course.  The recent Franco-British agreement on the creation of a Combined Joint Expeditionary Force preparing troops to deploy on operations together illustrates an increasing acceptance of the idea, even in Eurosceptic Britain, that EU member states need to stick together to defend their interests overseas.  And just as Afghanistan is considered a test for the political will of NATO member states to sustain complex commitments together, the Iranian nuclear issue is thought to offer a similar chance to unite EU member states.  The artificial sense of urgency surrounding it helps build a remarkable consensus among them.  That consensus-building is facilitated by the central role that Iran plays in many of the (soft) security challenges facing EU member states.  Energy is an obvious example.  Since the Islamic Revolution, access to Iran’s energy resources has had to be negotiated with a more nationalist government.  In recent years, moreover, Tehran has gradually strengthened its negotiating position by diversifying its trade partners.  The country went to great lengths to develop trade relations with non-Western powers such as India, Japan, and Turkey, as well as various African and Latin American nations.  Not without success, as Sino-Iranian economic ties illustrate: while commercial ties between Beijing and Tehran amounted to only 400 million US dollars in the mid-nineties, bilateral trade between them surged to 14.4 billion US dollars in 2006 and 21.2 billion in 2009.10

Consequences for Europe were far-reaching.  Tehran had never been keen on adapting its foreign policy to European security interests, but especially since 2004 increasing South-South cooperation has offered it the possibility to compete for political and economic influence.  Politically, Iranian policy clashed head-on with the objectives of the European Neighborhood Policy (ENP), designed to enlarge Europe’s sphere of influence, in both Lebanon and Palestine.  In a similar vein, Tehran helped Hezbollah defeat quasi-member state Israel, forced the West to the negotiating table over Iraq, and has the International Security Assistance Force, including most EU member states, asking for its support in Afghanistan.  Iran’s international relations complicate matters for the EU economically as well.  Earlier this year, for example, Turkmenistan opened new export routes to Iran and China for its gas resources.  By diversifying its markets, Ashgabat can now charge higher (market) prices for its gas.  The European Union as well as Russia is an obvious loser.11

Choice and Consequence

A challenge to Western predominance in the Middle East and Central Asia, Iran came to be perceived as a useful vehicle through which to solder relations with the US and strengthen foreign policy unity within Europe.  Sanctions then became the logical policy choice.  Used against about two dozen countries since 1980, they are not only the most widely accepted negative policy instrument among EU member states, but also perfectly in line with US policy.  Insofar as they are designed to contain and weaken Iran, however, their effectiveness can be doubted.  With the possible exception of Libya, sanctions alone have never been terribly effective in achieving policy or regime change.  More often than not, they impoverish the population and strengthen the regime.  Iran is unlikely to be an exception.  Suspicious “that the West’s focus on the nuclear issue is merely an excuse — an opening wedge — to achieve regime change,” the Iranian government will not cede any ground without a fight.12  Internally, it is extending the hold of the Islamic Revolutionary Guards Corps over the country and its economy, a move paradoxically facilitated by the withdrawal of European companies.  Internationally, it is using regional and international ties to circumvent sanctions.  Sanctions alone are therefore unlikely to achieve the purpose intended by their architects.  It is worth recalling, moreover, that, in Haiti, Yugoslavia, and, more recently, Iraq, sanctions merely constituted a first step towards military intervention.13  In the last case, sanctions were especially instrumental in weakening Iraq’s national defense and making military regime change less costly.  Meanwhile, so as to increase European pressure on Iran, the German frigate Hessen jointed the US Sixth Fleet and France opened a permanent military base in the Persian Gulf.  By choosing confrontation, the EU has entered a dangerous game.  Far from serving as a mediator to avoid war, it may be engaged in preparing it.


1  Flynt Leverett and Hillary Mann Leverett, “The United States, Iran and the Middle East’s New ‘Cold War’,” The International Spectator, Vol.45, No.1, March 2010, pp.75-87 (83).

2  Elements of a proposal to Iran as approved on 1 June 2006 at the meeting in Vienna of China, France, Germany, the Russian Federation, the United Kingdom, the Unites States of America and the European Union, www.css.ethz.ch/Documents/Incentive_package_2006.pdf; Statement, Letter by P5+1 Partners on New Incentives Package for Iran, 17 June 2008.

3  Jason Ditz, “Iran Would Halt 20 Percent Uranium Enrichment for Fuel Swap,” Antiwar.com, 28 July 2010.

4  BBC, “EU Tightens Sanctions over Iran Nuclear Programme,” 26 July 2010.

5  Reuters, “Tough Iran Sanctions to Hit Germany Hard: Report,” 24 November 2007.

6  Michel Makinsky, “French Trade and Sanctions against Iran,” Meria Journal, Vol. 13, No. 1, March 2009.

7  Clément Therme, “L’Iran: exportateur de gaz?” Note de l’Ifri, Paris, March 2008, p.24.

8  See for example Martin van Creveld, “The World Can Live With a Nuclear Iran,” Forward, 28 September 2007; and Gidi Weitz and Na’ama Lanski, “Livni behind Closed Doors: Iran Nukes Pose Little Threat to Israel,” Haaretz, 25 October 2007.

9  Michael Moran, “French Military Strategy and NATO Reintegration,” Council on Foreign Relations, 12 March 2009.

10  Laurent Maillard, “China Takes over from West as Iran’s Main Economic Partner,” AFP, 15 March 2010.

11  Aleksandra Jarosiewicz, “China and Iran, Rather Than Russia, Will Be the Main Buyers of Turkmen Gas,” Eastweek, Centre for Eastern Studies, 13 January 2010.

12  Shahram Chubin, “The Iranian Nuclear Riddle after June 12,” The Washington Quarterly, Vol.33, No.1, January 2010, pp.163-172 (164).

13  Simon Chesterman and Beatrice Pouligny, The Politics of Sanctions, Policy Brief, International Peace Institute, May 2002.

Marc Botenga (Ph.D., IMT Institute for Advanced Studies-Lucca, Italy) is a Belgian political analyst.  He spent over a year studying in Iran.

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