Iran has gravely misread Europe's position

The ground is shifting markedly against any more concessions, just when Tehran needs them most
Iranian President Hassan Rouhani (C) visits in the Iraqi central city of Najaf on March 13, 2019. - Iran's President Hassan Rouhani hit back on March 11 against pressure from the "aggressor" United States on Iraq to limit ties with its neighbour, during his first official visit to Baghdad. Shiite-majority Iraq is walking a fine line to maintain good relations with its key partners Iran and the United States which themselves are arch-foes. (Photo by Haidar HAMDANI / AFP)

The US policy on Iran is universally known in diplomatic circles in Tehran as “maximum pressure”, but if anything this underestimates how far Washington is willing to go.

As the name implies, the toll on Iran is heavy. The signs are the regime is starting to crack but can do little to save itself.

In pursuit of its containment goals, the US is steadily turning up the heat by phasing out waivers for states that have been buying the country's crude output. While Brian Hook, the US State Department envoy, stopped short of a complete shutdown of US concessions when he spoke on Friday, the measures are being steadily curtailed.

Remember, Donald Trump wants to force Iran to the table. A serious foreign policy rupture is under way, as the regime turns inward to shore up its hold on power.

Most experts in Iranian affairs were caught out by the powerful effect of Trump’s decision to pull out of the 2015 accord less than three years after the pact temporarily mothballed the country’s nuclear programme.

At the time of the decision, the Iranians affected a lack of concern. President Hassan Rouhani and his US-educated foreign minister Mohammad Javad Zarif made two key assumptions. Asia would keep buying Iranian oil and Europe would keep Iran's international trade system going.

Both theories have now proven wrong, and Mr Zarif is scrambling to come up with a plan B.

But Iran has alienated the very partners it needs to rescue its rapidly collapsing economy.

The IMF predicts it will shrink by six per cent this year. Middle-class Iranians are feeling the pinch more than ever and prices have risen by sharply in the past 12 months.

Oil exports are already down by 1.6 million barrels since the Trump announcement – and now Washington has set its sights on pushing the figure closer to zero.

For a government that was elected twice on a mandate of stabilising the living standards of ordinary Iranians, this is disastrous. Presenting a more amenable face to the world has not delivered for the Iranian population.

The revamp failed because Iran blew the chance to change its role on the international stage. The country is seen as part of the problem in Yemen. It played an outsized role in events in Syria, but is now marginalised in the reconciliation talks – both those led by Russia and those led by the UN – because of its sectarian bias and links to the regime of Bashar Al Assad.

On the global stage, Iran continues to misjudge its position with Europe. The ground is shifting markedly against any more concessions to Tehran, just when Iran needs them most.

When Donald Trump pulled the plug on the Joint Comprehensive Plan of Action (JCPOA), European diplomats were adamant that the deal should not be overturned.

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European nations are increasingly exasperated by missiles targeting Riyadh and bellicosity over the Strait of Hormuz shipping lanes

US sanctions to curb European business deals with Iran were considered illegal by the EU Commission. Britain, France and Germany moved to act as co-guarantors for Instex, a trade mechanism that sheltered transactions from the US Treasury’s punitive measures.

Iran has since complained that the impact of this support has fallen short of expectations. It now cries foul that there has been no broader rescue plan to justify continued compliance with the deal.

Iranian officials warn that the JCPOA must, in effect, be renegotiated. A policy of “less for less” is being mooted by figures such as Abbas Araghchi, the deputy foreign minister, as he speaks with European counterparts.

However, there are dangers for the Iranians. European frustration with Iran could soon go the other way. Instead of concessions, there is pressure for more sanctions to target Iran’s missile development activities.

The production of longer-range and more advanced missiles has been a story of flagrant expansion to contrast with the nuclear shutdown.

European nations are increasingly exasperated by regional concerns over missiles targeting Riyadh and bellicosity over the Strait of Hormuz shipping lanes.

There is also recognition of the need to align policy with the US as the smoke clears from the original meltdown of transatlantic ties.

Tehran has also done its own work to alienate states around Europe. The detention of Nazanin Zaghari-Ratcliffe, a dual UK-Iranian national, is a key example. Active assassination plots have been uncovered in six countries, including the Netherlands and Denmark. When the trials of the arrested suspects start in the coming months, the consequences of Tehran will be severe.

At the same time, Iran is looking beyond the Rouhani era. The rise of the Islamic Revolutionary Guard Corps commander Qassem Soleimani has taken on an air of inevitability.

The pressure on the regime has translated into a focus on survival. The IRGC has captured swathes of the government and many lucrative economic franchises.

Its last outstanding goal is to take the presidency. For the hardliners, the price of power comes on the back of collapse. President Trump has poisoned the prize.