OpinionIran in the World PressWhy Europe has leverage with Iran

Why Europe has leverage with Iran


Wall Street Journal: European resistance to American triumphalism has its uses. But with respect to Iran, Europe’s behavior is downright dangerous. Our welcome guest, French President Nicolas Sarkozy — who just visited President Bush in Maine after vacationing in New Hampshire — could change this. The Wall Street Journal


August 14, 2007; Page A17

European resistance to American triumphalism has its uses. But with respect to Iran, Europe’s behavior is downright dangerous. Our welcome guest, French President Nicolas Sarkozy — who just visited President Bush in Maine after vacationing in New Hampshire — could change this.

Here’s the problem: The U.S. stopped investing in Iran’s energy industry in the 1990s thanks to sanctions imposed during Bill Clinton’s presidency. Unfortunately, Europe stepped in to fill the void, with state-owned oil firms providing capital and energy technology. Today 80% of the Iranian government’s revenue comes from oil exports and sales. Without Europe’s support, the theocracy’s fiscal lifeline would be a very thin thread.

That provides a little context to the lament common from the European Union that Iranian nuclear weapons are “inevitable,” as if they were unrelated to energy investments from their member governments.

Europe has sacrificed regional stability for profit before. In 1983, as a global recession wracked France, then-President François Mitterrand pondered “the banker’s dilemma” — whether to extend credit to a troubled debtor in hope of rescuing prior loans. The debtor was Saddam Hussein, who had invaded Iran. Iraq had become France’s best arms customer.

Mitterrand ultimately thought he had little choice. His treasury had become so dependent on Iraqi trade that, as a French businessman put it to Le Monde at the time, “Iraqi defeat would be a disaster for France.” So France offered Saddam a spectacular new loan of five Super Entenard fighters (advanced warplanes).

But it wasn’t enough and the Iran-Iraq war dragged on for nearly eight years, threatening to engulf other Gulf States, such as Saudi Arabia. As a result, the U.S. also supplied Iraq with weapons. Yet despite U.S. support for Saddam and many billions in new credit from EU states, Iran would not be defeated. Tragically, 750,000 soldiers would die on the battlefield following France’s 1983 arms deal.

Today, EU credit underwrites what could become a greater disaster. One might think that Europe, ostensibly committed to a peaceful resolution of the Iranian crisis, would seize any opportunity to force conciliation upon Tehran. As in 1983, however, Europe has put short-term profit before long-term security.

European nations disguise this choice from themselves by looking to the United Nations Security Council to impose investment sanctions on Iran. This is a ruse, because Europeans always defer to whatever watered-down measures Russia or China agree to, only to watch as Iran rejects even these.

The exercise allows Europeans to believe they are behaving responsibly. In reality, as talks lead nowhere, credit and technology flow to Iran from the state-owned or -controlled oil firms of France (Total), Norway (Statoil), Italy (ENI) and Spain (Repsol). Clearly, standalone European sanctions could do a lot.

Unfortunately, Europe’s oil firms are not merely investors in the terror state. France’s Total has reached even lower. Hostage to its recent investments, Total has developed a foreign policy all its own: outright pro-Iranian advocacy. “The Iran Daily” reported recently that a Total executive “called on foreign entrepreneurs to avoid black propaganda and incorrect conceptions about the country.”

Total seems to be complaining about verbatim repetition in the Western media of Iranian President Mahmoud Ahmadinejad’s own utterances. The executive went on to boast of Total’s investment leadership in Iran. While this astonishing behavior preceded Mr. Sarkozy’s election, the president has neither rebuked the firm nor stood against further investment in Iran.

The good news is that Iran’s regime is vulnerable economically. Government spending has outstripped revenue increases from rising oil prices, while oil exports are stagnant or declining. Gasoline rationing, once politically unthinkable, was implemented nationwide last month. Emblematic of its isolation is Iran’s refusal to pay off a tiny debt owed to Russia for the Bushehr nuclear reactor. Iran’s fear is that Russia will abandon it once the debt is retired. All of this, of course, makes it questionable whether Iranian nuclear weapons are really “inevitable.”

However lamentable and confrontational President Bush’s rhetoric may be, the U.S. has at least tried to constrain Iran peacefully using sanctions. Similar European pressure is desperately needed now. It’s the one thing short of U.N. sanctions that might force Tehran to be conciliatory.

But that’s up to Mr. Sarkozy. He could take the lead by pushing a prohibition on new French energy investment in Iran until that country verifiably rejects and abandons nuclear weapons development. He could also demand that fellow-EU leaders do the same. Oh, and Mr. Sarkozy, please come again.

Mr. Stern is a research associate in the department of Near Eastern Studies at Princeton University.

Latest news

To Stay in Power, Iran’s Regime Liquidates National Assets

For several decades, Iranian regime supreme leader Ali Khamenei has sold Iran's resources and wealth for the survival of...

Iran’s 2023 Budget Shrouded In Doubt

On January 22, the Majlis (parliament) approved the draft of the 2023 budget bill proposed by regime president Ebrahim...

Iran: People of Khoy Still Reeling From 5.9-Magnitude Earthquake

An earthquake with a magnitude of 5.9 struck northwest Iran on Saturday, killing at least three people and injuring...

Iran’s Unsolvable Air Pollution Problem

Air pollution will remain at dangerous levels and will increase for the next few days in most big cities,...

The World Must Acknowledge the Iranian People’s Right to Self-defense

Victor Hugo once said: “When dictatorship is a fact, revolution becomes a right.” Throughout history, this has been the...

Iran: 60% Of Population Is Poor

The livelihood baskets of the Iranian people are shrinking dramatically. This, in turn, has introduced new concerns to protect...

Must read

Iran authorities amputate fingers of man for alleged theft

Iran Focus: Tehran, Iran, Feb. 26 – Iranian authorities...

Iran has plans to stop oil sales in dollars: TV

Reuters: Iran's central bank governor said Tehran had plans...

You might also likeRELATED
Recommended to you