Barbara Wachter – Iranian President Hassan Rouhani is visiting Zurich and Bern at the invitation of the Swiss Federal Council and Austria afterwards. The timing of the visit – two months after US President Trump’s breach of the Iran Nuclear Deal by unilateral withdrawal – must be understood as part of Europe’s attempt to show adherence to the agreement. It also points to Iranian eagerness for the deal’s dividends. This article explores the question if and how Europe will be able to safeguard the historical agreement.
The Joint Comprehensive Plan of Action (JCPOA) is the multilateral agreement between Iran, the Permanent Members of the UN Security Council and Germany, that lifted international and American sanctions on Iran from 2016. In exchange for curbing Iran’s ability to produce fissile material for nuclear weapons, the country was due to receive vaunted foreign capital for its economy. While the withdrawal of one signatory does not terminate the deal de jure, the re-imposition of American sanctions may be answered by Iranian breach or withdrawal. In this case, the agreement would become entirely obsolete.
The EU, Russia and China want the deal to continue, not least because Iran, according to independent observatory bodies, is adhering to its obligations. Nevertheless, ensuring the practical implementation of the agreement faces major obstacles: the Europeans are under great political pressure from Washington to stop Iran from realising the very economic benefits needed to justify the deal’s worth.
In Iran, the deal has so far yielded little economic reward. Trade has increased – far below expectations – and the deal’s benefits have not yet manifested in the micro-economy. Earlier this year, the country was shaken by a wave of demonstrations, largely motivated by economic grievances. One reason for the relatively small economic dividend is the uncertainty created by the constant 120-day intervals for US re-confirmation of the deal. With Trump now unequivocally disavowing the US’ commitment, Iran’s hardliners, who oppose the deal, and reformists, representated by President Rouhani, are reconciling. Through confidence-destroying rhetoric and blunt economic warfare, the Trump administration has rendered the relationship with Iran toxic to an extent where renewed negotiations are downright impossible. The emphasis, therefore, must be on Europe and the other signatories. Supreme Leader Ali Khamenei requires demonstration from European partners that trade relations continue after American withdrawal. While he reserves Iran’s right to restart the suspended enrichment in case its demands are not fulfilled, both Iran and Europe want to prevent a return to the pre-2015 status quo or a radical lift off of a nuclear arms race in the Middle East. If Europe can indeed guarantee economic benefits from the continuation of the deal, it may more successfully underwrite its core regional interests by bringing Iran’s involvement in regional conflicts such as Syria, Iraq or Lebanon into negotiations.
In 2015, the JCPOA was concluded and adopted in Geneva and Lausanne. That Rouhani’s first travel to Europe after the US withdrawal begins in Switzerland is therefore symbolically significant. Iran and Switzerland are traditionally connected through strong bilateral relations. Switzerland’s protective power mandate for the US and Saudi Arabia in Tehran – the second key topic of the visit – is indicative of the countries’ deep trust. Switzerland’s commercial interests in Iran have been increasing from an already significant base. However, these have been jeopardised: for example Stadler Rail withdrew from their Iran operations, publicly attributing Trump’s resanctioning of Iran. Switzerland is a business hub for Europe and has the reputation of being a politically neutral country that provides a platform for dialogue and crisis mediation. It is among the best equipped to support breakthrough negotiations.
Saving the Deal
Without doubt, Europe is faced with a perilous balancing act between Washington and Tehran. The first indicator will be whether the governments of Europe actively enable their companies to continue business in Iran. However, even if Europe finds paths to protect private investment in Iran, American secondary sanctions confront those companies with a stake in the US market or involvement with US entities with a stark choice between the US and Iranian markets. To most, America’s market matters far more than Iran’s. This problem is eminently practical – and difficult to solve. Secondly, it will be decisive to what extent Europe acts on its condemnation of the US breach of international law in practice. The current transatlantic tension should not only be evaluated through the prism of the Nuclear Deal; abrupt unilateral ruptures of traditionally strong transatlantic allegiances have dominated Trump’s attitude towards Europe. His threat to abandon the Paris Climate Change agreement and NATO are dangerous precedents that underline the fickleness and discarded credibility of the current US administration. Europe must realise the importance of asserting boundaries and pushing back in defence of its values and interests, not only to prevent disastrous political consequences, but to maintain relevance for global security.
Whether or not Europe and Iran can secure the agreement will emerge in coming months. While President Rouhani’s visit to Switzerland and Austria offers important space for dialogue and maintaining good relations, verbal commitment is not enough. The EU and other European countries face a critical choice. They must demonstrate robust political will in defiance of the current US administration by asserting pragmatic solutions that satisfy Iran, achieve Europe’s goals, and mollify Trump.