EU Needs Creativity with Iran

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EU Needs Creativity with Iran

The diplomatic tools for an EU breakthrough on Iran’s nuclear program are there, but creative use is needed.

The upcoming Iran talks this weekend with the U.K., France, Germany and US, Russia and China (the EU 3+3) don’t set the hearts of most European policy makers racing.  The reality is that previous disappointing experiences of negotiations over the past decade suggest that a breakthrough on Iran’s nuclear program is unlikely.

What, then, should the EU strive for? The existing tools in the diplomatic arsenal are adequate, however they can be applied in a more effective and imaginative way in order to tackle Europe’s core aims: to prevent Tehran from developing nuclear weapons, to deter Israel from launching a preemptive strike and to contain sanctions from deepening the recession in Europe.

There hasn’t been much progress in the recent EU3+3 meetings with Tehran. Confidence building measures in the form of fuel swaps were rejected, pre-conditions for further progress fell on deaf ears, and letters calling for more talks were left unanswered. Meanwhile, the centrifuges keep spinning: in the period from February 2009 until February 2012, Tehran has increased the amount of its Low-Enriched Uranium (LEU) fivefold, enough for 4 nuclear bombs if enriched further.

Those relying on the same old formula for negotiations may not accord enough importance to two key factors. First, the infighting within the Iranian regime that had previously impeded even the smallest degrees of rapprochement (such as in 2009, when Iranian President Mahmoud Ahmadinejad  indicated a willingness to engage in negotiations concerning the nuclear fuel swap, only to be rebuked and have the deal rejected upon touching down in Tehran). The March Majlis elections show that Ahmadinejad continues to lose political clout, while other hardliners gather influence as the 2013 presidential race begins to gather pace. The second factor is that the most biting set of sanctions – the EU’s embargo of Iranian crude oil – doesn’t come into full force until this July. Far from re-considering its policies, the Ayatollah regime seems to be living in denial, not only working hard on ways to circumvent international sanctions, but even helping Assad’s bloodied Syrian regime to circumvent theirs.  

So, how can the EU tackle its three key problems?

1) Persuade Iran to change course

While some policy “hawks” would argue that nothing can or will deter Tehran from pursuing its nuclear program, experience shows that one event has made it change tack: the 2003 Iraq war and the perception in Iran that it may be next.  In the same year, the regime stopped what the International Atomic Energy Agency (IAEA) called a “structured program” on a nuclear warhead design. To this day, the country hasn’t resumed substantial work on a nuclear warhead (although the November 2011 IAEA report notes that “some [related] activities may still be ongoing”). As such, a palpable threat of force is necessary to persuade Iran to change course.

At the same time, such measures should be coupled with more attractive incentives than offered previously. The demand Iran has consistently made is to be allowed to enrich uranium, according to the Non-Proliferation Treaty (NPT). The EU 3+3 already recognize this, provided the enrichment is for peaceful purposes. If what Iran wants most is a place among the nuclear energy family of nations, then it’s possible to offer it an incentive in the form of the Germany/Japan nuclear model. After World War II, the two countries received assistance with building their own nuclear power plants, in exchange for certain assurances. For example, Japan endorsed a three point policy of not possessing, producing or allowing entry of nuclear weapons into the country. A similar package could be offered to Tehran – in return,  it will be required to sign up to the IAEA Additional Protocol, allowing extensive access for IAEA monitors, and operate full disclosure on its projects. By putting a country that is still a “pariah state” in the same category as two of the G8 economies, the EU would be repackaging the existing formula in a way that would (hopefully) satisfy Tehran’s thirst for international recognition and respect. Instead of being sanctioned, Iran will have an opportunity to join a select group of countries, gain favor (and trade contracts) with the international community and set its economy back on track.

2) Preventing Israel from launching a preemptive strike

Experience of Iraq in 1981 and Syria in 2007 demonstrates that when Israel believes it’s directly threatened by one of its nuclear weapons bent adversaries, it will not hesitate to act alone. At the same time, most analysts dispute its capacity to deliver a definitive blow to Iran’s nuclear program. An Israeli strike could risk triggering a major war in the already unstable and angry region, and one that’s armed to the teeth.

Instead, the EU can go a step further in convincing Israel that it won’t allow a nuclear-armed Iran, while putting measures in place to discourage it from acting alone. Clear red lines for the Iranian nuclear program should be set, alongside stronger and more detailed assurances for Israel. For example, the EU should state that Israel won’t be alone in dealing with the threat and that all necessary measures will be taken to prevent Iran from acquiring a nuclear weapon if there is conclusive, empirically verifiable proof that it is on the brink of doing so.  At the same time, the EU should place a high price tag on a unilateral preemptive strike. Possible measures could include the threat of cutting the EU-Israel Association Agreement – where the EU holds substantial leverage as Israel's top trading partner.

3) Preventing sanctions on Iran from deepening the recession on Europe

Common wisdom suggests that tensions with Iran cause a rise in oil prices, resulting in increasing market costs against the background of a sluggish economy threatened by a double-dip recession. Some analysts suggest that the increasing oil prices have nothing to do with political tensions, but are rather the result of growing demand for oil in the U.S. and China – the former is emerging out of a recession, while the latter is enthusiastically stocking up its Strategic Petroleum Reserves. Arguably, the disruption of supply is less of a problem – while 90 percent of the EU’s imports from Iran in 2010 were oil and related products, this constituted only 5.8 percent of the EU’s total oil imports. Saudi Arabia is ready to fill the void left by Iran, alongside Libya and Iraq. However, the EU is still certainly potentially exposed to some supply disruptions. Therefore, the most effective solution is for the EU to calm the markets by signaling at the earliest possible opportunity that it’s looking to expand its pool of energy suppliers, for example exploring the options of shale gas, wind farms, solar energy, amongst others. The Liquefied Natural Gas (LNG) market is another viable option – one of the world’s biggest exporters of LNG, Algeria, is located just across the Mediterranean from potential EU clients. Previously, the EU has dithered over energy corridors, e.g. the Nabucco project, which was intended to act as an energy source independent of Russia. Such hesitation, or indeed absence of a stated official “energy vision,” can create uncertainty and nervousness in the markets – the EU needs to act swiftly in order to prevent the oil prices from continuing to rise.

The nuclear negotiations with Tehran are too important for Europe to settle for unimaginative repetition of old strategies. The existing tools can be deployed in a much more effective way to combine incentives and penalties to keep Iran at the negotiating table and serve the EU’s interests.

Inna Lazareva is a Middle East and North Africa Analyst and a Program Coordinator at the Legatum Institute in London. Her work can be found on www.innalazareva.com.