October 15, 2012 | Quote

EU Agrees to New, Wide-Ranging Iran Sanctions

European Union governments agreed further sanctions against Iran's banking, shipping and industrial sectors on Monday, cranking up financial pressure on Tehran in the hope of drawing it into serious negotiations on its nuclear program.

The decision by EU foreign ministers reflected mounting concerns over Iran's nuclear intentions and Israeli threats to attack Iranian atomic installations if a mix of sanctions and diplomacy proves fruitless in ushering in a peaceful solution.

In a joint statement following the announcement cited by the Wall Street Journal, EU ministers expressed “serious and deepening concerns” over the Islamic Republic's nuclear progress and stressed that “the restrictive measures agreed [to] are aimed at affecting Iran's nuclear program and revenues of the Iranian regime to fund its program and are not aimed at the Iranian people.”

EU foreign policy chief Catherine Ashton said she hoped that turning up the heat on the Islamic Republic would persuade Iran to make concessions and that negotiations could resume “very soon”.

“I absolutely do think there is room for negotiations,” said Ashton, who represents the United States, China, Russia, Britain, France and Germany in their on-and-off talks with Iran. “I hope we will be able to make progress very soon.”

The new sanctions mark one of the toughest moves against Iran by Europe to date and a significant change of policy for the 27-member bloc, which hitherto focused on targeting specific people and companies with economic restrictions.

German Foreign Minister Guido Westerwelle was more pessimistic than Ashton about the prospect that additional economic pain might drive Tehran – whose Islamic Revolution has long thrived on defiance of the West – to make concessions.

“Iran is still playing for time,” he told reporters. “We don't see a sufficient readiness for substantial talks about the nuclear program.”

The widening sanctions regime is already doing significant damage to the Iranian economy, notably due to an oil embargo imposed by the European Union this year and new financial sanctions applied by the United States.

Earlier this month, riots broke out in Tehran in protest at the collapse of the rial currency, which has lost some two-thirds of its value against the dollar in the past 15 months, stoking inflation that is now running at around 25 percent.

The new European measures include a general ban on financial transactions, with some exceptions for those involving humanitarian aid, food and medicine purchases and provisions for legitimate trade, an EU diplomat said.

Mark Dubowitz, the executive director of the Washington-based Foundation for Defense of Democracies and an Iran sanctions expert, said, “These EU sanctions fill loopholes in the current sanctions regime but they are a long way from the sweeping action required to deal with the only fundamental question that matters: Will Iran reach an economic cripple date — when its foreign reserves prove insufficient to head off economic collapse — before or after it becomes a threshold nuclear power? Based on our analysis of Iran's balance of payments, Iranian foreign reserves could last at least two years under current conditions. If so, Iranian nuclear physics will beat western economic pressure.”

He continued that” Europe needs to go to the next stage and ban all non humanitarian trade with Iran and blacklist Iran's central bank for its support of proliferation and terrorism. Only if the economic pressure is massively intensified will we know if economic collapse is enough to break Iran's supreme leader's nuclear will.”

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Iran Iran Sanctions