EU payment mechanism sign of resistance to US bullying

EU payment mechanism sign of resistance to US bullying

The new EU special payments channel devised to maintain business is viewed by many observers as a step in the right direction to save the 2015 Iran nuclear deal, which at the same time underlines the bloc’s desire to say ‘no’ to US bullying.

The last week’s announcement of the European Union’s foreign policy chief Federica Mogherini to establish a payments mechanism which allows countries to transact with Iran while avoiding US sanctions has angered US President Donald Trump and his team at the Department of the Treasury.

Called the ‘special purpose vehicle’ (SPV), this mechanism would aim to ‘assist and reassure economic operators pursuing legitimate business with Iran,’ according to a joint statement released by Mogherini and Iranian Foreign Minister Mohammad Javad Zarif after a meeting by the remaining members of the Iran nuclear deal — France, Britain, Germany, Russia and China — at the UN in New York.

‘This will mean that EU member states will set up a legal entity to facilitate legitimate financial transactions with Iran and this will allow European companies to continue to trade with Iran in accordance with European Union law and could be open to other partners in the world,’ Mogherini said.

The SPV has the potential to gradually become a trading system for Iran and the EU, something that can lure other countries like China and Russia to jump on the bandwagon as well without the fear of being punished by the US sanctions.

Washington is now trying to counter the EU payment mechanism, but the US officials are worried that they will not be able to do so without a direct confrontation and face-off with Europe.

White House officials maintain that the European countries have undermined Trump’s anti-Iran policies by coming up with the mechanism which is aimed at maintaining business ties with Iran to encourage it to stay in the nuclear deal – officially known as the Joint Comprehensive Plan of Action (JCPOA) – after the US abandoned the accord in May.

The European’s opposition against the Trump’s stances vis-à-vis Iran was on display when the French President Emanuel Macron told US president at a UN Security Council session he was chairing that Paris is not on the same page with Washington when it comes to Iran’s sanctions.

Trump vowed at the meeting that US re-imposed sanctions on Iran will be “in full force” and urged world powers to work with the United States to isolate Iran.

Addressing the council after Trump, Macron hit back, declaring that concerns about Iran cannot be tackled with “a policy of sanctions and containment.”

“What will bring a real solution to the situation in Iran and what has already stabilized it? The law of the strongest? Pressure from only one side? No!” Macron said in his address.

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