(Persia Digest) -
European officials are looking at creating a multi-billion-dollar credit line for Iran to entice the sanctions-battered country to keep abiding by an international nuclear deal.
But their efforts face resistance from U.S. officials who oversee those sanctions, even though President Donald Trump has publicly flirted with the idea as part of broader nuclear negotiations.
that French officials said this week they have been discussing the possibility of a credit line with both Iranian and U.S. officials. The talks come as Iran has pledged to take more steps to violate the nuclear deal within days, its latest retaliation for Trump’s decision to quit the agreement and reimpose economic sanctions on Tehran.
In return for the credit line, Tehran would have to fully comply with the 2015 nuclear deal and commit to not threatening security in the Persian Gulf and not impeding freedom of maritime navigation. The country would also have to agree to future talks on Middle East security and on more long-term nuclear arrangements, French Foreign Minister Jean-Yves le Drian said Tuesday. The credit line would be guaranteed by Iranian oil.
The exact value of the credit line, and which countries will contribute to it, remains under discussion, although Iranian officials have said it would be around $15 billion.
“There is still a lot to figure out. It’s all still very fragile,” Le Drian said.
His remarks came a day after an Iranian economic delegation was in Paris for talks. French Finance Minister Bruno Le Maire was in Washington on Tuesday to meet with Treasury Secretary Steve Mnuchin, and Lawrence Kudlow, a top economic adviser to Trump.
Neither a credit line nor oil sales are possible without American waivers on sanctions, French officials said. And U.S. officials are not especially enthused about either idea, people familiar with the issue told POLITICO.
A senior Trump administration official reacted brusquely to questions about the credit line, saying “the Europeans are desperate to salvage a terrible deal.” A senior State Department official, meanwhile, insisted: “There are no discussions taking place between State Department officials and European officials to reinstate Iran waivers or relax our pressure in any way.”
“There’s no appetite for the credit line idea — at least the French version as we know it now,”another U.S. official separately told POLITICO.
The official added, however, that including a credit line might be something worth considering as part of a future deal with Iran that covers its nuclear activity as well as a range of other matters of dispute, such as its ballistic missile program.
Another person familiar with the administration’s discussions echoed the notion that none of Trump’s deputies appear enthused by the credit line concept. The challenge, as it often is, is that Trump himself may be on a different page than his aides.
“The big question is, ‘What the hell’s in Trump’s mind?’” the person said.
While in France last month for the Group of Seven summit, Trump indicated he was open to the idea of a credit line so long as the U.S. doesn’t pay for it.
“No, we are not paying, we don’t pay,” Trump said. “But [the Iranians] may need some money to get them over a very rough patch and if they do need money, and it would be secured by oil, which to me is great security, and they have a lot of oil, but it is secured by oil, so we are really talking about a letter of credit. It would be from numerous countries, numerous countries.”
Le Drian told reporters that French President Emmanuel Macron had felt it was worth pursuing the credit line idea after talking to Trump during the G-7.
“President Macron felt that President Trump was open to attenuating the maximum pressure strategy [against Iran] and was open to finding a new itinerary that would lead to a deal,” Le Drian said.
Whether Trump decides to support the credit line idea could come down to if Iran’s president, Hassan Rouhani, agrees to meet with him, sources told POLITICO.
“All this won’t work unless at some point Rouhani accepts to see Trump. If they refuse, it won’t happen,” a senior French diplomat said.
An ideal opportunity for a Rouhani-Trump meeting will occur later this month during the United Nations General Assembly in New York. Trump has in the past sought to meet Rouhani during that annual gathering, but he’s been rebuffed.
Trump pulled the U.S. out of the Iran nuclear deal last year. He said the deal, negotiated under his predecessor, Barack Obama, was too narrow and time limited. After pulling out of the agreement, Trump has imposed a slew of U.S. sanctions on Iran, badly damaging its economy.
Iran at first kept abiding by the agreement, hoping that European countries, as well as Russia and China, could help its economy survive the U.S. sanctions. But the other countries have not been able to give Iran the relief it wants because U.S. sanctions have deterred European companies from doing business with Iran, for fear of losing access to the much more lucrative U.S. market.
In recent months, Iranian officials have taken small steps to violate certain aspects of the agreement. They have said they will take more steps at the end of the week if the European signatories don’t “fulfill their obligations.”
France’s Macron has staked significant political capital in trying to save the deal and broker some sort of détente between Trump and Iran.
In recent weeks, France has been having extensive conversations with China, India and Japan, the three main purchasers of Iranian oil pre-U.S. sanctions. French officials say the three countries are ready to resume buying Iranian oil if the U.S. reissues waivers.
The Trump administration has kept up its ongoing sanctioning of Iran, which it dubbed its “maximum pressure campaign.”
On Tuesday, the administration announced it is imposing sanctions on the Iran Space Agency and two of its research institutes on grounds that their work advanced the country’s ballistic missile program.