The Iran nuclear deal and the EU: a strategic awakening?

This September, the EU made a bold move. On the 24th, High Representative Federica Mogherini announced the setting up of a legal entity to shield European companies doing business in Iran from US sanctions. When in May this year the Trump administration announced its withdrawal from the Iran deal of July 2015, better known as the Joint Comprehensive Plan of Action (JCPOA)[1], economic sanctions on Iran were reimposed.

"Although there are limits to what the EU can do to counter the oil sanctions, the SPV is an important step by its remaining signatories to keep the Iran nuclear deal alive."

The EU initiative is the operationalisation of the so-called “Special Purpose Vehicle” (SPV), welcomed by the E3/EU+2[2]and Iran. In order to sustain trade with Iran, the new financial tool facilitates legitimate payments between European and Iranian companies, including both exports and imports. Iran’s President Rouhani has repeatedly stated that Iran will remain committed to the JCPOA as long as the remaining five signatories continue to abide by the agreement and if Iranian interests are protected. Mogherini said that the SPV could be in place before November, when the Trump administration is due to unleash a second round of penalties on Iran’s oil sector. Although there are limits to what the EU can do to counter the oil sanctions, this move is an important step by its remaining signatories to keep the Iran nuclear deal alive. It provides a way to uphold the economic benefits for Iran that were promised in the deal. Most notably, it shows the EU’s willingness and capacity to provide a strong answer to the predicaments caused by the unilateral decisions of the US. 

"In order to defend the deal, the EU needs a strategy to pursue its interests and is forced to operate autonomously from the US." 

After the US withdrew from the JPCOA deal, European Commission President Jean-Claude Juncker said: “At this point, we have to replace the United States, which as an international actor has lost vigour, and (…) influence.”[3]Indeed, since Trump took office, Washington has been effectively obstructing multilateralism by withdrawing from the Paris Climate Agreement and the UN Human Rights Council and recognising Jerusalem as the capital of Israel. While all these decisions led to dismay and criticism among the vast majority of EU member states and the EU itself, it was the withdrawal from the JCPOA that resulted in a real break-up of transatlantic unity, specifically regarding Iran. Unanimously endorsed by the UN Security Council in July 2015, the deal is considered crucial for the security of the Middle East region and an important step in global nuclear non-proliferation efforts. The E3/EU+2 have repeatedly stressed their commitment to the continued and effective implementation of the JCPOA, as long as Iran upholds its nuclear-related commitments. However, in order to defend the deal, the EU needs a strategy to pursue its interests and is forced to operate autonomously from the US. The US withdrawal from the JCPOA brings to light several reasons why the EU should do so. 

First, the US is pursuing its own (geo)political agenda. The E3 had already started talks with Iran over its nuclear programme in 2003. In the following twelve years of negotiations, the US and the E3 moved from complete opposition to cooperation. When the JCPOA became a political agreement in 2015, it served American geopolitical interests. Former President Obama used the deal as a way to constrain Saudi Arabia’s power in the region.[4]As long as the US and the EU have compatible agendas and goals, the underlying geopolitical dimension behind it may be of lesser importance. It obviously becomes a problem when both parties are not striving for the same purpose. Bearing in mind the changing US administrations and policies, the EU should be prepared in any case. The current Trump administration has a policy aimed at isolating Iran and is seemingly pushing for regime change. By reimposing sanctions and pulling out of the nuclear deal, the US puts pressure on Iran both economically and politically. Mike Pompeo, America’s Secretary of State, wants to hold a summit in January 2019 to launch a Middle East Strategic Alliance (MESA), likened to a Middle East NATO. The member states of the Gulf Cooperation Council (GCC), along with Egypt, Jordan and the US, are prioritising Iran as their main threat. While both the US and the EU have a strategic interest in the containment of Iranian nuclear proliferation, the means to reach that goal differ greatly. 

Second, the stakes are higher for the EU. In addition to the first argument, the US’s withdrawal, combined with its meddling in the Middle East, has increased the risk of a nuclear arms race in the region. Escalation of the current instability to a military confrontation could eventually directly impact the EU if it triggers an inflow of refugees. Given the geographical location, it will be the EU that needs to address this issue first, not the US. Since the start of the Syrian civil war in 2011, about one million displaced Syrians, either refugees or asylum seekers, have moved to Europe, whereas in the US the number amounts to 33,000.[5]A military confrontation could also easily disrupt oil and gas exports, in particular from the Gulf area. Therefore, it is of major importance that the EU continues to pursue its current diplomatic mission to uphold a deal that is working well. Brussels thereby conveys the message that the deal is more than a nuclear agreement. In addition, it provides a stepping stone for discussing Iran’s ballistic missile programme, its human rights record and regional activities in Yemen, Syria and Iraq, among others. President Rouhani has made clear that his government is not interested in direct talks with the US, enabling the EU to step in. 

Third, the EU is able to apply leverage because of its united stance. The EU currently faces many internal challenges, such as migration, Brexit and derogation from its core democratic values by some of its member states. However, despite internal disagreements, Brussels is conveying a single clear message of commitment to the JCPOA. Even in the current stage of Brexit negotiations, the UK, an initiator of the deal, has stated that the JCPOA is vital for its security and that it will remain committed to it. Countries such as Hungary and Poland, both seen as a challenge to the EU due to illiberal domestic developments, have also stressed their support for the deal. If Brussels is able to maintain this momentum, the EU will be in a position to play an important role in Middle Eastern affairs according to its own priorities. Furthermore, it enables the EU to take a leading political role as the promoter of a rules-based global order as underlined in its EUGS of 2016.

"Brussels needs to draw a line and stick to its fundamental principle of multilateralism."

The JCPOA pre-eminently provides an important step towards the achievement of EU strategic autonomy. Although the transatlantic alliance is considered the backbone of European security, Brussels needs to draw a line and stick to its fundamental principle of multilateralism. As Council President Donald Tusk rightly pointed out: “We realise that if you need a helping hand, you will find one at the end of your arm.”[6]