What's behind Europe's tough stance on Iran?

European powers have agreed in principle to embargo Iranian oil, the lifeblood of Iran's economy, adding to tough sanctions already in place.

By , Staff Writer

Europe may give an impression of favoring diplomacy over sanctions on Iran, compared with American and Israeli approaches, but it has been early and consistent in pushing both. France in particular spearheaded robust action on Iran’s nuclear program, becoming one of the leaders of European Union sanctions in mid-2010 to ban investment and business activities with Iran, notably in the energy sector.

On Jan. 4, European powers agreed in principle to an oil embargo, expected to be implemented gradually after a Jan. 23 meeting of EU foreign ministers to work out the details.

“We don’t see sanctions as an alternative to negotiations but as part of them,” says Bruno Tertrais, of the Foundation for Strategic Research in Paris. “Even though there is little demonstrated hope for negotiations to resume, we haven’t given up.”

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With mounting tensions in the Strait of Hormuz, and increased invective and incidents between Tehran and the West, European states that do not want war see sanctions as a pragmatic alternative. The premise is that, with sanctions, the EU is doing everything possible to avoid a military outcome. Sanctions are also seen here as a step toward opening the issue at the UN Security Council

“France and the UK are concerned about unintended consequences of military action on Iran,” says Richard Whitman of Chatham House, an independent foreign-policy think tank in London. “Like many in Europe, they support every effort to delay a military answer.”

Europe’s decision to punish Iran with oil sanctions stems directly from the November report from the International Atomic Energy Agency (IAEA) on Tehran’s nuclear program, which found that Iran had continued nuclear weapons development until as recently as 2009. Iran maintains that its nuclear program is for civilian purposes only. 

The report was debated in nuclear watchdog circles, since there was no clear smoking gun. Yet EU officials saw the report as showing enough evidence of Iran’s intent to build a nuclear weapon to warrant global action. That the assertions came from the conservative, plodding IAEA – and not US or Israeli intelligence leaks – added to their credibility.

“The report shook people up, and Iranians were seen as dissembling,” Mr. Whitman says, “while they blithely go along towards weaponization.”

Europe is Iran’s biggest trading partner, according to European Commission figures. About 90 percent of Iran’s exports to Europe are energy related, and Europe takes between 450,000 and 550,000 barrels of Iranian oil a day, rivaling China’s 600,000 barrels as Iran’s biggest buyer. Thus EU oil sanctions would exert significant leverage. European oil imports account for 18 percent of Iran’s oil sales abroad, while a US em­bargo simply keeps the United States from buying any oil from Iran.

Sanctions gained momentum after Iran’s Nov. 29 attack on the British Embassy in Tehran, and were reportedly sealed by EU assurances to the Greeks that any oil shortfalls resulting from a boycott of Iranian oil would be compensated.  

While about 6 percent of EU oil comes from Iran, debt-addled Greece gets about 30 percent of its oil from there, according to the IAEA. Italy and Spain each get 13 percent of their oil from Iran.

In the Jan. 23 meeting, EU ministers will work out the how and when of the embargo. Italy has proposed “phased sanctions” to take effect over three to six months to allow for supply to adjust to an embargo, particularly important in struggling EU economies. Iran owes Italy’s energy giant ENI some $2 billion, which Iran is repaying in oil; the issue was suddenly in dispute days ago, but Iranian authorities have confirmed the contract terms. 

France may push the EU for collective sanctions on Iran’s Central Bank, the main conduit for oil revenues, following the lead of the US. 

Some critics say Iran is in political disarray, and that sanctions may aid forces there that want conflict, or create dynamics or cause mistakes that bring conflict. Rouzbeh Parsi of the EU Institute of Strategic Studies in Paris says the problem is that sanctions and a military response are portrayed as the only options for dealing with Iran.

“Our policy is on autopilot,” he argues. “There is no creative thinking on where this ends up. The EU doesn’t know how to play the ball. There’s sanctions and nothing else, which plays to those that want a military solution.

“The EU is voluntarily cutting its [energy] imports, and there isn’t much else it can sanction from Iran, and we are now coming to the end of that game,” Mr. Parsi adds. “The danger of sanctions ... is that people think there isn’t anything else to do.”

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