European efforts to launch a payments channel to facilitate trade with Iran, INSTEX, suffered a fresh setback on Thursday when a former German diplomat who was set to take over as its new chief was forced to pull out at the last moment, Financial Tribune.
The move by Bernd Erbel, 72, a former ambassador to Tehran, followed revelations in the German daily Bild of a recent YouTube interview in which the designated INSTEX president voiced sympathy for Iran along with pointed criticism of Israel, the Financial Times reported.
Among other things, he said that Israel was “more than ever an alien body” in the Middle East.
He also described the fall of Saddam Hussein as the “greatest tragedy of the early 21st century”. The foreign ministry in Berlin said Erbel, who was presented as the new head of INSTEX only last month, would not take on the role after all: “Mr Erbel has informed the foreign ministry that he will not be available for personal reasons.”
Erbel was announced as the new chief of INSTEX in July. A Middle East expert, he served as ambassador to Iraq, Egypt and Iran between 2004 and 2013. Though he is no longer a member of the German Foreign Service, he had a formal role in the training program for junior diplomats from 2014 to this year, the paper reported.
INSTEX was launched in January as part of a broader effort by Germany, France and Britain — the so-called E3 — to preserve the 2015 nuclear agreement with Iran after the US abandoned the deal last year.
The new body is supposed to help companies in Iran and Europe maintain trade flows in defiance of the US threat of sanctions, by offering a payments channel that is not subject to US penalties.
However, INSTEX has been beset by delays and bureaucratic hurdles, most of which are linked to complications caused by the US sanctions.
The sudden reversal of Erbel´s appointment will do little to dispel skepticism that INSTEX is unlikely to have a big economic impact for Iran and is little more than a symbol of European resistance to the US policy of “maximum pressure” on Tehran.
Esfandyar Batmanghelidj, founder of Bourse & Bazaar, a publication focused on Iranian politics and economics, wrote on Twitter that Erbel’s withdrawal was an “avoidable setback for INSTEX”, according to the Financial Tribune report.
The financial channel began to process its first transactions only in June after months of wrangling over how it would work and where it would be based.
It has not disclosed the nature or value of its deals so far, although it has said it will initially focus on humanitarian goods such as food and medicines that are not subject to US sanctions, writes FT, first Iranian English Economic Daily.