Obama's Iran policy could lead to tensions with Europe

13th January 2009, Comments 0 comments

Obama's proposed initiative of harsher economic sanctions could lead to tension with European countries, which have closer financial ties to the Iran.

Washington -- American election euphoria, the financial crisis and the Middle East crisis have upstaged the issue of Iran's nuclear activities, a coalition of top think tanks said.

Concern over the threat prompted a coalition of top think tanks -- the Council on Foreign Relations and the Brookings Institution -- to warn last month that Iran poses the biggest challenge for President-elect Barack Obama when he takes office January 20.

The idea that Iran could develop and test its first nuclear weapon as early as 2009 is shared by high profile organizations, including the US-based Institute for Science and International Security, headed by David Albright, and the UN nuclear watchdog in Vienna, the International Atomic Energy Agency (IAEA.)

The American intelligence community, however, believes Iran's ability is at least several years away.

Mohamed ElBaradei, who heads the IAEA, has called American and international efforts to restrain Iran's nuclear ambitions a "failure." But the 2005 Nobel Peace Prize laureate also told the Los Angeles Times recently that he holds out "lots of hope" for Obama because "he is ready to talk to his adversaries."

Tehran has trumpeted the news of its growing mass of enriched uranium and successful test of new rockets. Israel, according to the Jerusalem Post, is prepared for a preventive strike against Iran, even without American support.

But Obama's avowed intentions for Iran could put him on a collision course with Europe – particularly with Germany, who has a robust trade relationship with Iran.

Obama has vowed to "do everything that's required" to prevent Iran from getting a nuclear weapon. "We will never take military options off the table," he declared in a presidential campaign debate in October.

Although he has also said he would negotiate directly with the Iranian leadership, his first intention is to use "tough ... direct diplomacy," beginning with harsher sanctions which he wants to be put in place by the West independently of the United Nations.

The UN Security Council has already passed three sets of limited sanctions that have failed to slow Iran's ambitions. China and Russia have been unwilling to support stronger sanctions.

A new sanctions effort would raise issues with American allies and others in the international community who continue to sell goods to Iran and who have financial connections with Iran's banks.

Such trade elements are not specifically forbidden under UN Security Council sanctions, which only limit sales of technology that could be used in the weapons industry.

The United States already has comprehensive unilateral sanctions on Iran, but Obama could try to broaden sanctions through a coalition of countries that now do business with Iran -- such as Germany.

Close financial ties to Iran

In November, the German-Iranian Chamber of Commerce (GICC) met in Hamburg to discuss the UN sanctions and their practical consequences for German firms. The offerings included advice on obtaining German government guarantees for trade with the Islamic republic, according to the Fars news agency of Iran and other media reports.

The reaction in the US has been a growing outcry, particularly in the conservative press.

"Germany loves Iran,” the Wall Street Journal wrote in an internet headline for commentary by editorial writer Dan Schwammenthal. He pointed out that German-Iranian trade increased by 14.1 percent in the first seven months of 2008, adding that Germany had huge leverage over Iran, where 75 percent of all medium and small businesses use German equipment.

Germany, he wrote, is apparently less worried about an Iranian nuclear bomb than about tighter sanctions.

German Chancellor Angela Merkel, who has repeatedly emphasized Germany's special responsibility to protect Israel, insists that Germany is only obligated to obey the UN sanctions and should not undertake any further unilateral moves.

Thus, Iranian banks -- such as the government-owned Bank Melli, and Saderat Bank, which have been blacklisted by Washington for their roles in funding terrorists and weapons research -- have flourishing business in Germany.

A wide range of opinions

Among American Iran experts, there is little disagreement about the threat posed by Iran, but wide ranging opinions about strategy.

The president of the Council on Foreign Relations, Richard Haass, urges direct negotiations without conditions even though, in his words, "diplomacy is not guaranteed to work." The military option, he says, may gain time but would not solve the problem and would likely trigger retaliatory attacks by Iran against American facilities in Iraq and Afghanistan. It would definitely push up oil prices, he added.

Other US experts are skeptical about peaceful resolution.

James Phillips, of the conservative Heritage Foundation, believes that a diplomatic path with Iran is not promising. A sticks-and-carrot policy toward Iran holds little hope because for Iran, “a nuclear weapon is the biggest carrot," he wrote. The years-long efforts by Europeans as part of the EU3 talks -- with Germany, Britain and France -- have showed that negotiations bring nothing, he added.

He is also dismayed that the German government, for example, still undertakes credit guarantees for Iranian businesses.

Another analyst, Peter Brookes, also of the Heritage Foundation, believes it is wishful thinking to try the same thing over and over again.

An expert in the Middle East, in an article Phillips warned Obama against meeting with Iranian leaders, saying they would use the event for propaganda and delay tactics.

Iran is not interested in dialogue and reconciliation with "the Great Satan," Brookes wrote. According to Brookes, the real Achilles' heel is Iran's economy; if it is hurt by harsher sanctions, the rule of the fundamentalists could be seriously challenged.

Phillips noted that Iran temporarily and realistically halted its nuclear plans after the US invaded Iraq in 2003.

As for the vital role of the Europeans in a new sanctions effort, many American analysts believe that they are more worried about keeping the US from invading Iran than they are about Iran's development of nuclear weapons.

Laszlo Trankovits/DPA/Expatica

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