Sunday, April 15, 2018

BERLIN — Europe’s leading powers aren’t waiting for President Trump’s May 12 deadline to decide whether the U.S. is withdrawing from the Iran nuclear deal and are cooking up contingency plans to keep the agreement with Tehran afloat.

With China and Russia vowing to support the agreement, America’s leading European allies have a lot riding on the success of the deal. An American departure from the pact — and the possible reimposition of U.S. sanctions on companies that do business with the Islamic republic — would likely damage Europe’s economic and political relations with Tehran and increase instability in the Middle East.

Many note that Europe — unlike the U.S. — would be well within range of nuclear-tipped Iranian ballistic missiles if Tehran resumes nuclear programs that are curbed under the 2015 deal negotiated with the Obama administration.

But the extent to which nations including Germany, France and Britain can contain the fallout from a U.S. withdrawal is the subject of nervous uncertainty.

“They have limited leverage and cards to play,” said Ellie Geranmayeh, a senior policy fellow with the European Council on Foreign Relations. “But if they resign to just watching the deal fall apart, that will burn any influence that they have with Iran to be able to moderate its reaction on the nuclear issue.”

Since taking office, Mr. Trump has repeatedly referred to the Obama-era deal to lift international economic sanctions on Iran in exchange for restrictions on Iran’s nuclear program as a “bad deal” with “terrible flaws.”

Even so, the International Atomic Energy Agency, the party that oversees the deal, has said over the course of 11 reports since 2015 that Iran is adhering to the stipulations of the arrangement to decrease nuclear stockpiles and enrich uranium only for peaceful purposes.

European, Chinese and Russian companies have routinely been visiting Tehran on trade missions seeking deals and partners as a market with 82 million consumers rejoins the world economy. But relatively few big deals have been nailed down given the continuing legal and financial uncertainties hanging over the nuclear accord since Mr. Trump’s election.

Critics say Iran’s adherence to the letter of the agreement has been overshadowed by Tehran’s continued involvement in messy conflicts across the Middle East. Mr. Trump sees the actions as a violation of the spirit of the agreement.

Seeking a deal ‘fix’

The White House now faces a May 12 deadline on whether to once again waive U.S. sanctions on Iran. Mike Pompeo, the former CIA director nominated to be secretary of state, told his Senate confirmation hearing last week that Mr. Trump hopes the European allies will help “fix” the agreement so the U.S. does not have to withdraw totally. Among the fixes: push off “sunset” provisions in the deal, open more Iranian research and military sites to international inspectors, and address Iran’s behavior in areas outside the nuclear sphere.

“I’ve heard [Mr. Trump] say his goal is to take the three shortcomings and fix them,” Mr. Pompeo told the Senate Foreign Relations Committee.

The specter of a U.S. withdrawal prompted a chilling response from Iranian President Hassan Rouhani at Iran’s National Nuclear Technology Day last week.

“Iran will not violate the nuclear deal, but if the United States withdraws from the deal, they will surely regret it,” he said. “Our response will be stronger than what they imagine and would see that within a week.”

The situation presents economic and political challenges for the deal’s European partners, France, Germany and Britain, all of which oppose U.S. efforts to undermine the deal.

European leaders want Mr. Trump to decide to stay with the Iran deal before tackling other geopolitical issues that worry the White House, such as Tehran’s involvement in Syria and Yemen.

German parts manufacturer Daimler and French automaker Peugeot had planned big investments in Iran.

The Bourse & Bazaar website, which tracks Iran’s economy and business climate, cited Austrian news accounts last month that Oberbank, one of the first Western banks to negotiate a financing deal with Iran after the signing of the nuclear accord, has put a highly touted $1.2 billion line of credit on hold indefinitely because of the uncertainty.

Another threat to Europe’s big plans for rapprochement with Iran is the push by key U.S. allies Israel and Saudi Arabia to scuttle the deal.

“I am 100 percent certain that Iran has never abandoned its military nuclear vision for a single instant,” Yossi Cohen, head of Israel’s Mossad intelligence agency, said in leaked comments from a recent closed meeting of top Israeli officials. “This deal enables Iran to achieve that vision.”

Economic and strategic interests are widening the divide between Europe and the U.S. over the benefits of the Iran deal, analysts say.

“In the wake of the nuclear deal, we’ve seen some glorification of Iran by the European side that’s been economically and politically motivated, whereas with the U.S. administration under Trump, we’ve seen a return to the demonization of Iran,” said Ali Fathollah-Nejad, a visiting fellow with the Brookings Doha Center in Qatar. “Both narratives are extreme and inadequate. The truth lies somewhere in the middle.”

Mr. Pompeo and new White House National Security Adviser John R. Bolton are longtime critics of the Iran deal, Ms. Geranmayeh said.

“They take a very different position from the Europeans on Iran, which is to say you can’t cut any deals and it’s all about containment and confrontation,” she said. “The Europeans have had a much different history with Iran and have had diplomatic relations with Iran for the past 40 years.”

Building a ‘firewall’

With economic and diplomatic interests on the line, European players are trying to develop a strategy to get the Trump administration to halt its plan to quit the deal.

Though German Foreign Affairs Minister Heiko Maas called for a “firewall” to be erected between the nuclear deal and Iran’s other activities as early as last week, Europe and the United States have been holding high-level talks since January to reinstate some sanctions on Iran for its meddling in regional conflicts in return for a guarantee that the nuclear deal remain in place.

German Chancellor Angela Merkel and French President Emmanuel Macron will visit Washington at the end of the month. The nuclear deal is expected to be a key issue on the agenda.

“The European strategy is twofold,” said Mr. Fathollah-Nejad. “One is to talk about and possibly also take action on areas of concern under Trump. Second, it’s to lay the groundwork for securing European economic interests in Iran.”

If European partners can’t persuade Mr. Trump to stay in the deal, they will try to jockey for an arrangement that would at least allow Tehran to strike economic deals with the Europeans, the Russians and the Chinese in ways that would include Iran adhering to its nuclear obligations, Ms. Geranmayeh said.

“In my view, that would be the best-case scenario, because you keep the deal alive and you allow the U.S. to come back in when there’s a more amicable administration, all the while keeping Iran tied to its nuclear commitments,” he said.

Even so, there is the risk that the U.S. departure from the pact could undermine the nuclear controls entirely, raising the risk of Iranian nuclear proliferation in the region and increasing the chance of targeted strikes by Israel, the United States and others on Iranian facilities.

“We’d essentially go back to the pre-2013 dynamic of very high risks of military conflict over this issue,” Ms. Geranmayeh said. “And that’s exactly what the Europeans have been trying to avoid for the last decade.”

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