LUDOVIC MARIN/AFP/Getty Images
French President Emmanuel Macron (L), Britain’s Prime Minister Theresa May (C) and German Chancellor Angela Merkel take a moment to discuss as they walk together during an EU-Western Balkans Summit in Sofia on May 17, 2018.
European leaders said Thursday they will do their utmost to protect the region’s companies from the adverse effects of U.S. sanctions on Iran as they met at a European Union (EU) summit.
President Donald Trump’s decision to withdraw from the Iranian nuclear deal will not only see sanctions re-imposed on Tehran, although the extent of these is unknown, but is likely to include extra-territorial “secondary sanctions” too. These could hit European firms doing business in Iran and is a topic high on the agenda for EU leaders meeting in Sofia, Bulgaria, today.
European companies including Total, Maersk and Allianz have signaled that they could exit Iran, fearing they could be hit by U.S. penalties for doing business there.
French President Emmanuel Macron said Thursday that the EU must protect its companies trading with Iran. “International companies with interests in many countries make their own choices, according to their own interests. They should continue to have this freedom,” he told reporters as he arrived at the EU-Western Balkans summit.
The U.S. withdrawal from the nuclear deal — which was brokered by Washington alongside U.K., France, Germany, Russia and China in 2015 — has drawn criticism from the rest of its signatories. But their focus has moved from trying to persuade the U.S. to salvage the deal to seeing whether they can maintain it without Trump. Protecting European companies is a key concern.
Arriving at the summit Thursday, Lithuanian President Dalia Grybauskaite said the EU was looking at “technical solutions” to protect its companies, including a “blocking” clause that “could partially protect European companies working in Iran.” She said that it was important to remain a part of the deal, however, in order to be able to influence it.
On Tuesday, the EU’s head of foreign policy, Federica Mogherini, met with the foreign ministers of France, Germany, Iran and the U.K. The Europeans pledged then to explore “maintaining and deepening economic relations with Iran,” including the continued sale of Iran’s oil and gas and banking transactions with Tehran. The solutions might not be that simple, however.
There had been talk of using European powers to ban banks in the region from complying with U.S. sanctions, but European Commission Vice President Valdis Dombrovskis said Thursday that any such move would be of “limited effectiveness.”
Speaking to the EU parliament, Dombrovskis said “the EU blocking regulation could be of limited effectiveness there, given the international nature of the banking system and especially the exposure of large systemic banks to the U.S. financial system and U.S. dollar transactions,” Reuters reported.