The EU is preparing for the aftermath of a possible US withdrawal from a landmark deal with Iran, drawing up contingency plans to support European companies trading with Iran, a UK report says.
They are considering providing emergency credit lines and funding support to the companies which face “potentially devastating loss of financial support by commercial banks” if President Donald Trump goes ahead with his threat to ditch the deal, the Guardian reported.
Earlier this week, EU foreign ministers discussed contingency plans in Brussels where the bloc’s foreign policy chief Federica Mogherini made a reference to the European Union’s program to shield Europe from US sanctions.
The EU, she said, was “starting to prepare in case it will be needed to protect European interests in case other decisions are taken elsewhere”.
According to the Guardian, former UK Foreign Office political director Sir Simon Gass who was the British ambassador to Tehran between 2009 and 2011 has proposed practical steps to keep the European part of the plan alive if Trump pulls out.
His roadmap submitted to the pan-European think tank European Leadership Network “argues that EU member states should be ready to respond robustly to the imposition of swinging penalties on EU companies that have acted in good faith”, the paper said.
They “should be prepared to extend non-dollar lines of credit and credit guarantees to preserve as much of the deal as possible”, wrote Gass who was the key British official responsible for negotiating the 2015 nuclear deal with Iran.
“The Europeans will also be acutely aware that if the US does withdraw, there will be an onus on them to show how they could preserve as much as possible of the economic benefit from the agreement, given that Iran will have fully lived up to its obligations,” he added.
Total Chief Executive Patrick Pouyanne has already called on the Europeans to protect the French oil and gas group’s $5 billion project in Iran.
Last September, Iran’s Foreign Minister Mohammad Javad Zarif urged Europe to defy US sanctions if Trump abandoned the nuclear agreement.
In an interview with the Guardian and the Financial Times, Zarif stressed that Tehran would only abide by the restrictions under the nuclear deal if the other signatories – the UK, France, Germany, Russia and China – all remained committed to the deal and defied any subsequent US sanctions.
Ahead of Trump's May 12 deadline for Congress and the Europeans to "fix" the deal, France, Britain and Germany have intensified talks with the US in an effort to convince the US president to stick to the agreement.
The European Council on Foreign Relations, another pan-European think tank, on Thursday urged the bloc to toughen its position in ongoing talks with the Trump administration if they are to preserve the Iran nuclear deal.
“Europeans should therefore be clear-eyed about the chances of success of current talks with the United States. Based on recent precedent, Trump is likely to perceive Europe’s flexibility and accommodation over Iran policy as a weakness that he can exploit to raise the benchmarks of demands,” it said.
“Moreover, by threatening imminent withdrawal from the nuclear deal, Trump is increasingly pressuring the E3 (France, Britain and German) to jump on board with his efforts to undermine the agreement,” it said in a commentary.
The think tank said Trump’s recent nomination of Mike Pompeo as US secretary of state and another hardliner, John Bolton as the new national security adviser, “should be a trigger for European policymakers and companies to step up contingency planning to salvage the deal even without the US”.