[News] Iran and Europe, 'till death do us part

[Anti-Imperialist News]

Iran and Europe, 'till death do us part

May 26, 2012
By Pepe Escobar
http://www.atimes.com/atimes/Middle_East/NE26Ak03.html

So the grand Barack Obama administration foreign policy strategy of 
trying to square the circle between an Iranian nuclear deal and 
getting the eurozone economy back on the road slouches towards ... 
what exactly? (See 
<http://www.atimes.com/atimes/Middle_East/NE22Ak02.html>War and 
cheeseburgers Asia Times Online, May 22)

Not even Zeus knows. At least what was on the table this week in both 
Baghdad and Brussels has kept the ball rolling further on down the 
road in Moscow and Paris/Berlin.

The story in Baghdad
The much-anticipated meeting of the five permanent members of the UN 
Security Council - the US, China, Russia, Britain and France plus 
Germany (P5+1) with Iran in Baghdad at least produced a result; a 
third round of negotiations in Moscow next month.

It couldn't be any other way. A divided P5+1 (the US and the 
Europeans on one side, BRICS members China and Russia on the other) 
wanted Iran to totally halt their uranium enrichment to 19.75% - to 
which it has a right, as it subscribes to the nuclear 
Non-Proliferation Treaty (NPT). In exchange, the P5+1 offered a 
"sanctions-lite" package, allowing the sale of US aircraft spare 
parts and a vague "assistance" in developing Iran's energy sector.

Tehran was unmoved; to succeed, this P5+1 package had to be 
"significantly revised and reformed", according to the IRNA news 
agency. Tehran's ultimate objective in these negotiations is to 
soften the Security Council sanctions. For the leadership, a schism 
is very clear between the UN as a whole and the wall of mistrust 
involving any US government. Both Russia and China support Iran's position.

Tehran even accepts, in principle, the idea of a foreign supply of 
19.75% enriched uranium for the production of medical isotopes at its 
medical reactor. And it might even agree with the International 
Atomic Energy Agency (IAEA) inspecting the military base in Parchin 
(although that is not part of the IAEA mandate).

But the key point is still that the P5+1 has turned the NPT into 
dust. The mantra since 2006 has been the same; Tehran must stop all 
sorts of uranium enrichment. This is being enforced by a nasty 
financial blockade whose ultimate aim is essentially to paralyze the 
Iranian economy - by preventing it from selling oil using the 
international banking system.

Unfair doesn't even begin to describe it.

Then steps in the European Union (EU) - with its extra sanctions cum 
oil blockade, to be in effect in theory by July 1, in fact going 
beyond the Security Council sanctions, and virtually illegal to boot. 
This is compounded by a US law in effect on June 28 forbidding any 
foreign bank to be involved in payment for Iranian oil.

Yet the Obama administration needs a deal - be it in Moscow, or 
beyond. That will be essential for Obama to milk as a foreign policy 
triumph - in fact much more substantial than the milking of the Osama 
bin Laden raid (see 
<http://atimes.com/atimes/South_Asia/NE25Df03.html>Osama re-elects 
Obama Asia Times Online, May 25). If there is no deal, the Obama 
administration will have to exert much pressure for the EU to scrap, 
at least until the end of 2012, the ban on insurance of tankers 
carrying Iranian oil (EU companies control most of the global 
maritime insurance industry).

Who's suffering with the sanctions? Not the suspected "regime change" 
target - the Tehran leadership. The military dictatorship of the 
mullahtariat stays comfortably in place with oil above $54 a barrel 
(Brent crude is at around $106, and West Texas Intermediate at $90). 
Moreover, Tehran is selling energy in every currency from yuan to 
Indian rupees, and is engaged in wholesale barter with its customers 
- especially Asian.

The bottom line though is clear; the EU will have to scrap its absurd 
Iranian oil blockade to avoid badly hurting itself and also, by 
extension, the US economy.

The story in Brussels
It was up to German weekly Der Spiegel [1] to gleefully register the 
birth of Merkollande.

New French President Francois Hollande drew a monster crowd during 
his first press conference after a EU summit - starting way beyond 1 
o'clock in the morning and speaking for over an hour; for her part 
German Chancellor Angela Merkel faced a half empty room for five minutes.

The stage is set for a Gotterdammerung-style clash. Hollande will go 
no holds barred to prove to Merkel that issuing euro bonds is the 
only way out of the eurozone disaster.

Hollande insists that would be a mighty help to hyper-troubled Spain, 
for instance, in terms of saving on huge interest payments and using 
the money on productive investment. Hollande is supported by Spain, 
Italy, Ireland and Austria.

Merkel's argument is the troika (European Central Bank, European 
Commission, International Monetary Fund) argument; euro bonds violate 
EU law. She is supported by Sweden, Finland and the Netherlands. Yet 
even Hollande admits EU treaties would have to be modified to 
accommodate euro bonds - and that would be a mess, as Britain and the 
Czech Republic already rejected an amendment to the treaties late last year.

The whole situation is immensely complex. Hollande let it be known 
that some EU members would accept euro bonds only in a distant 
future; some may accept them for a very specific purpose; and some 
reject it outright.

European bankers, for their part, take refuge in a fuzzy "debt 
sustainability" concept; somebody's got to pay, and it's basically 
the bulk of the salaried population. No wonder Nobel laureate Joseph 
Stiglitz is fuming with the "pontifications" of "those who, at the 
helm of central banks, finance ministries and private banks, steered 
the global financial system to the brink of ruin - and created the mess".

No one seems to be betting on multi-year subsidies of core European 
countries to the periphery, most of them part of the Club Med. At the 
same time, everyone knows there's never been an "exit" sign on the 
euzone. Now, though, the unthinkable is already thinkable.

Anyway, what is being described as a Orwellian "growth package" will 
only be decided on at the next formal EU summit in late June - after 
two crucial events on June 17; the French parliamentary elections, 
and the possible victory of the left-wing Syriza party in Greece, 
whose key platform point is to renegotiate the country's bailout 
imposed by Berlin/Brussels.

Incidentally, EU political leaders have absolutely no clue what to do 
with Greece. While they reassure the god of the market saying Greece 
will never leave the euro, they threaten Greece saying, "If you don't 
vote the right way, you will be out of the euro." No wonder the Obama 
administration is perplexed. Compared to this, killing Osama was a 
piece of cake.

Note
1. See 
<http://www.spiegel.de/international/europe/euro-bond-discussion-dominates-european-union-summit-a-834865.html>here. 


Pepe Escobar is the author of 
<http://www.amazon.com/exec/obidos/ASIN/0978813820/simpleproduction/ref=nosim>Globalistan: 
How the Globalized World is Dissolving into Liquid War (Nimble Books, 
2007) and 
<http://www.amazon.com/Red-Zone-Blues-snapshot-Baghdad/dp/0978813898>Red 
Zone Blues: a snapshot of Baghdad during the surge. His most recent 
book, just out, is 
<http://www.amazon.com/Obama-Does-Globalistan-Pepe-Escobar/dp/1934840831/ref=sr_1_1?ie=UTF8&s=books&qid=1233698286&sr=8-1>Obama 
does Globalistan (Nimble Books, 2009).

He may be reached at pepeasia at yahoo.com



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