What this adds up to is that the fate of the Iran deal is bigger than Iran—it stands to fundamentally shift how EU foreign policymakers view the trans-Atlantic alliance. If the Paris climate accord, the steel and aluminum tariffs, and the digs about NATO spending weren’t enough, the Iran deal has reinforced the European perception that on certain issues they are on their own.
“It is no longer such that the United States simply protects us, but Europe must take its destiny in its own hands,” Merkel said after Trump withdrew from the deal. “That’s the task of the future.”
Similar comments echoed across the bloc in the wake of the U.S. withdrawal. Federica Mogherini, the EU’s foreign-policy chief, said that while the signatories to the JCPOA “regretted” the U.S. action, the bloc would look to maintain and deepen “economic relations with Iran.” French Finance Minister Bruno Le Maire told Europe-1 radio: “Do we want to be vassals who obey decisions taken by the United States while clinging to the hem of their trousers? Or do we want to say we have our economic interests, we consider we will continue to do trade with Iran?”
The most potentially significant response from Europe came Thursday when European Commission President Jean-Claude Juncker said the commission would work to enact a never-used statute that blocks European companies from complying with U.S. sanctions. That statute—the so-called blocking regulation—would make it illegal for European companies to comply with U.S. sanctions laws that have extraterritorial reach. But European officials have acknowledged that the blocking regulations have limited impact, and the U.S. reportedly is considering ways to ensure European compliance.
“There has not been a huge rush by European companies precisely because the chilling debate about whether this agreement would continue, whether sanctions might come back, has meant that there’s been a very limited amount of economic benefits for Iran,” David O’Sullivan, the EU ambassador to Washington, said this week.
Now, Iran says it will remain in the agreement as long as the Europeans guarantee the economic benefits that were supposed to come with the JCPOA. Because this wasn’t realistic even when the U.S. was part of the agreement—when political uncertainty over its fate prevented promised investments from materializing—it will now be virtually impossible for Europe to create by itself the economic climate that will draw investors to the Islamic Republic under the possible threat of U.S. sanctions. For the largest European companies, the choice of doing business in the United States, a country with an $18 trillion economy, and Iran, one with a $400 billion economy, is simply no choice at all.
Indeed, Total, the French oil giant that has investments in Iran, has already said it will withdraw from the country if it can’t get waivers on the U.S. sanctions. And Airbus, the European aircraft manufacturer that has signed an agreement to sell 100 passenger planes to Iran, will almost certainly back out without a waiver, as well.