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EU Plan Unraveling for Non-Dollar Iran Trade, Oil Sales: Diplomats

  • It does not appear a new Iran Nuclear Deal will happen. No Covenant of 1 week.
  • EU Plan Unraveling for Non-Dollar Iran Trade, Oil Sales: Diplomats
    by John IrishFrancois MurphyRobin Emmott,
    PARIS/VIENNA/BRUSSELS (Reuters) – A special European Union initiative to protect trade with Iran against newly reimposed U.S. sanctions faces possible collapse with no EU country willing to host the operation for fear of provoking U.S. punishment, EU diplomats said.

    The main European powers – Germany, France and Britain – will raise pressure on Luxembourg to host the so-called Special Purpose Vehicle (SPV) after Austria refused to manage the plan, threatening its viability.

    The EU’s executive promised EU lawmakers on Wednesday to find a solution and said that technical work continued, adding that the bloc would not be cowed by U.S. sanctions.

    “We Europeans cannot accept that a foreign power, not even our closest friend and ally, takes decisions over our legitimate trade with another country,” European Justice Commissioner Vera Jourova told the European Parliament in Strasbourg, referring to the United States.

    The stakes are high, for Iran has warned it could scrap a 2015 accord on curbing its nuclear program reached with world powers, including the big EU trio, if the bloc fails to preserve the deal’s economic benefits against U.S. pressure.

    The SPV is a kind of clearing house that could be used to help match Iranian oil and gas exports against purchases of EU goods in an effective barter arrangement circumventing U.S. sanctions, based on global use of the dollar for oil sales.

    The goal was to have the SPV legally in place by this month though not operational until next year, but no country has offered to host it, six diplomats told Reuters. The SPV is seen as the lynchpin of European efforts to salvage the nuclear accord, from which U.S. President Donald Trump – who took office after the pact was clinched – withdrew in May, calling it flawed in Iran’s favor.

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November 16, 2018 - Posted by | Economics, GeoPolitics | , , ,

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