France sees progress in $15bn credit line for Iran

Efforts under way to secure Washington's backing for President Emmanuel Macron's mediation over 2015 nuclear deal

Iranian President Hassan Rouhani speaks at a session of parliament in Tehran, Iran, on September 3, 2019. EPA

France has offered Iran access to $15 billion in credit to stave off economic collapse if Tehran returns to the terms of the 2015 nuclear deal and negotiates over security issues including its regional policies.

Officials engaged in intense discussions with Iran believe a staged release of funds, equal to the revenues Tehran believes it has lost under US sanctions, could unlock the crisis.

France, Germany and the UK are ready to offer the credit facility if Tehran accepted conditions and the US approved the deal.

Bruno Le Maire, the French Finance Minister, has arrived in Washington to consult with US Treasury Secretary Steve Mnuchin on the initiative.

The idea was launched by French President Emmanuel Macron at the G7 summit in Biarritz last month.

Talks in Paris on Monday involving the Iranian deputy foreign minister Abbas Araghchi made progress on the issue.

Ali Rabiei, a spokesman for the Tehran government, said on Tuesday that differences had advanced to technical issues of implementing the European offer.

Mr Macron has set an ambitious goal of direct talks between US President Donald Trump and Iranian leader Hassan Rouhani.

The two sides remain apart on how a meeting could take place, with Mr Rouhani telling Parliament on Tuesday that he was not ready to engage with Mr Trump.

"No decision has ever been taken to hold talks with the US and there has been a lot of offers for talks but our answer will always be negative," he said.

Mr Rouhani also suggested that Tehran remained intent on winding down its commitments under the 2015 deal with world powers, an indication that Iran is ready to reveal new breaches as soon as Friday.

A European official said on Tuesday that talks remained fragile but that those involved were increasingly confident mediation would deliver a resolution.

The lack of trust lies behind the European decision to offer the $15bn (Dh55.09bn) in tranches for pre-purchasing Iranian crude, with $5bn already on the table.

Iran has demanded its oil exports be restored to 700,000 barrels a day, the level before Mr Trump withdrew from the deal signed by his predecessor, Barack Obama.

While the US is unlikely to reverse sanctions, it could reintroduce waivers and make other concessions that would allow the French arrangement to go into effect.

Iran has already gone over the limits set by the 2015 deal, making a series of moves at intervals of 60 days.

The country’s stockpile of low-enriched uranium has exceeded the 300 kilogram limit set in the accord, a report from the International Atomic Energy Agency confirmed.

In July, Tehran restarted uranium enrichment at 4.5 per cent, above the maximum allowed 3.67 per cent.

The next deadline is September 6 when Tehran threatens to increase the enrichment process to 20 per cent.

It is unlikely that US or the Europeans will be able to complete an agreement by then.

The European official said there were hopes that Tehran would announce a more limited breach, perhaps in the area of research and development, not the “strong step” that Iranian Foreign Minister Javad Zarif warned about on Monday.

Jean-Yves Le Drian, the French Foreign Minister, said on Tuesday that there was some distance to go in securing an agreement and there was still uncertainty about US approval.

To get the line of credit, Tehran would have to return to its nuclear agreement, commit to easing tension in the Arabian Gulf and take part in Middle East talks on improving regional security.

"There is still lots to work out, it's still very fragile," Mr Le Drian said. "It all supposes, of course, that President Trump allows waivers on some points.”

But the French are keen to prove that the G7 moves by Mr Macron created a diplomatic opportunity.

"The president sensed that Mr Trump was open to softening the strategy of maximum pressure, to find a path that could allow a deal to be reached," Mr Le Drian said in Paris.

Dominic Raab, the British Foreign Secretary, told the House of Commons that Iran had a chance to bring itself out of international isolation.

To do so it must show it respects international law, freedom of navigation in the Strait of Hormuz, the nuclear deal and fair treatment of dual nationals who have been locked up in its jails.

"We want to de-escalate tensions with Iran," Mr Raab said. "We want Iran to come in from the cold."