European banks won’t be able to protect companies that invest in Iran from American sanctions, French Finance Minister Bruno Le Maire said Tuesday.
Le Maire, one of the most ardent critics of President Trump’s decision to exit the 2015 nuclear deal and renew sanctions on the Islamic Republic, predicted that most French companies will scrap their plans to work in Iran. They’ll have to do so, because Iran won’t be able to make payments for the deals.
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“They cannot be paid because there is no sovereign and autonomous European financial institution [that can protect them from sanctions],” Le Maire told BFM television.
That’s a near-admission of defeat from an official with one of Europe’s largest economies. European leaders attempted to “mitigat[e] the impact of US sanctions on European businesses” through a blocking statute that barred the companies from paying fines. French energy giant Total, one of the nation’s largest companies, announced in May that it would cancel its involvement in a major natural gas project if Trump’s team refused to provide a sanctions waiver, citing the risk of having its American operations shut down.
“Total has always been clear that it cannot afford to be exposed to any secondary sanction,” the company said.
The European Commission, in an attempt to generate financing at least for smaller businesses that do not have large operations in the United States, previously voted to “encourag[e] Member States to explore the possibility of one-off bank transfers to the Central Bank of Iran.” But Le Maire’s statement implicitly acknowledged that even major European banks can’t risk being blacklisted by Trump’s Treasury Department. That’s why he wants Europe to develop a plan to challenge U.S. hegemony over the international financial system.
“Our priority is to build independent, sovereign European financial institutions which would allow financing channels between French, Italian, German, Spanish and any other countries on the planet,” he said. “It’s up to us Europeans to choose freely and with sovereign power who we want to do business with.”
Secretary of State Mike Pompeo issued an unflinching warning to European allies in his first major speech as the nation’s top diplomat.
“We will hold those doing prohibited business in Iran to account,” he said, days after Total’s announcement. “Anytime sanctions are put in place, countries have to give up economic activity.”
He added that the sanctions deprive the Iranian Revolutionary Guards Corps of funding for aggression throughout the Middle East. “Every country is going to have to understand that we cannot continue to create wealth for [Iranian general] Qassem Soleimani,” Pompeo said. “That’s what this is about. At the end of the day, this money has flowed to him.
European officials, who credit the Iran deal with defusing a nuclear crisis, are frustrated by the lack of exemptions for their companies. “The United States should not be the planet’s economic policeman,” Le Maire fumed.
