EU provides €18 million for Iran amid increasing US pressure on European companies
ERBIL (Kurdistan 24) – The EU Commission adopted the first package of €18 million for economic projects in Iran, including €8 million assistance for the private sector, in an attempt to salvage the nuclear deal after the US pulled out in May.
“Today’s projects are the first of a wider package of €50 million for Iran, aiming to support the country to address key economic and social challenges. They are part of the renewed cooperation and engagement between the European Union and Iran following the conclusion of the Joint Comprehensive Plan of Action (JCPOA),” the EU Commission said in a press release.
“Since the renewal of the EU-Iran relations as a result of the Iran nuclear deal, cooperation has developed in many sectors. We are committed to [sustaining] it, and this new package will widen economic and sectoral relations in areas that are of direct benefit to our citizens,” High Representative of the EU for Foreign Affairs Federica Mogherini said.
The move comes after several European companies have stopped their work in Iran amid the threat of US sanctions.
Both British Airways and Air France on Thursday declared they would stop flying to Iran next month, suggesting the flights were economically unviable.
Moreover, on Monday, France’s largest energy company, Total, announced it was pulling out of a $4.8 billion (€4.1 billion) Iranian gas field project.
Analysts say the EU decision will have limited impact on US sanctions targeting Iran.
“This is a concrete effort on EU’s part to show Tehran that it is serious and that it wants to encourage investments in Iran,” Amir Toumaj, an independent analyst on Iran, told Kurdistan 24.
“However, especially after Nov. 4, every EU entity including the International Trade Center would be risking ending up in a blacklist and losing access to the US financial system.”
The chairman of the Iran-Italy joint chamber of commerce, Ahmad Poorfallah, said in an interview with Tasnim News Agency on Thursday that Italy has permitted many of its banks including bankrupt ones to work with Iran using the euro.
“This underscores the fundamental challenge for EU that no major bank or entity that wants exposure to the US financial system—the lifeline of the global financial system—will choose Iran over the US,” he added.
However, he did not rule out some smaller entities that have little or no US exposure to do business with Iran.
“In terms of the JCPOA nuclear implementation, though, Iran will likely remain committed because it would not want to give a reason for a united political front just as the last rounds of sanctions, and also it feels confident in advancing nuclear industry,” Toumaj said.
According to Middle East Analyst Raman Ghavami, however, the EU decision will not stop companies from leaving.
“They got 18 million today, but more companies are leaving. Germany is backing off because of Turkey-US tensions,” Ghavami told Kurdistan 24.
“[The] Chinese will leave too but not now. If [the] US dollar value continues to increase then China will not be in a position to become the biggest economy by their plans,” he said.
As a result, it will be increasingly difficult for the European Union to challenge Trump’s new Iran policy.
Editing by Karzan Sulaivany