Iran deal advocate says EU will have to bend to U.S. sanctions

Bloomberg – Europe will have no choice but to comply with U.S. sanctions on Iran, according to Javier Solana, a former NATO secretary general and early advocate of the nuclear deal abandoned by Donald Trump.

Solana, who was a long-time promoter of diplomacy with Iran as the European Union’s foreign envoy, said that the U.S.’s international financial clout means EU efforts to get around sanctions are doomed to fail.

“I wish I could say yes,” Solana said when asked if European moves to circumvent sanctions will succeed. Rather, the U.S. Treasury’s ability to sanction transactions carried out in dollars effectively kills those plans, he said in an interview in Madrid.

“The power of the U.S. today is not military, it’s the dollar,” said Solana, 76, who is now chairman of the Center for Global Economy and Geopolitics at ESADE business school in Madrid. “They squeeze you out.”

France and Germany are exploring ways to sidestep the penalties, with French Finance Minister Bruno Le Maire last month referring to work on “an independent European or Franco-German financing tool” to avoid falling foul of U.S. measures. Pressure is growing on Europe to act to save the accord, with U.S. sanctions against Iran’s oil industry set to come in from Nov. 4 and Iran telling the parties to the nuclear deal to come up with ways to offset the economic impact by then.

Solana pointed to French oil major Total SA’s decision to withdraw from the South Pars gas field after failing to secure an exemption from sanctions as evidence of the U.S.’s power to enforce extra-territorial measures.

“You have to cut off your relationship with the U.S. because they don’t allow your dollars to go through,” he said.

Total made a real effort to be in Iran after the lifting of sanctions, said Solana. “So if Total is leaving, imagine the smaller players.”

— With assistance by Ben Sills, and Jonathan Tirone