With Iran Deal Teetering on Brink, Europeans Assess Next Steps

By John Irish

BRUSSELS, July 15 (Reuters) – European foreign ministers will seek to flesh out how to convince Iran and the United States to reduce tensions and initiate a dialogue when they meet in Brussels on Monday amid fears that the 2015 nuclear deal is close to collapse.

U.S.-Iranian tensions have worsened since U.S. President Donald Trump decided last year to abandon the nuclear deal under which Iran agreed to curtail its atomic programme in return for relief from economic sanctions crippling its economy.

In reaction to the re-imposition of tough U.S. sanctions, which have notably targeted Iran‘s main oil revenue stream, Tehran has scaled back on some of its nuclear commitments under the deal, leading the European parties to the pact, France, Britain and Germany, to warn it about not fully complying with the terms.

The three powers, who are party to the deal alongside Russia and China, have sought to defuse the tensions, which culminated in a plan for U.S. air strikes on Iran last month that Trump called off at the last minute.

French President Emmanuel Macron dispatched his top diplomat to Tehran last week to offer suggestions on how to freeze the current status quo to gain some time and had said he wanted to review the diplomatic progress by July 15.

“We told President (Hassan) Rouhani what the parameters of a pause could be and we’re waiting for a response from the Iranians, but their point of departure is relatively far because they are demanding the immediate lifting of sanctions,” said a French presidential official.

Rouhani on Sunday reiterated Tehran’s stance that it would be ready to negotiate if the U.S. lifted sanctions and returned to the nuclear deal. Trump has shown no sign of backing down for now. Despite discussing Iran with Macron, Trump said last week he would push on with more sanctions.

In New York, Iranian Foreign Minister Mohammad Javad Zarif on Sunday pointed the finger at the Europeans.

“There is a serious difference between doing something and announcing your willingness,” Iranian state TV quoted him as saying.

The European are still trying to put its Instex trade mechanism in place with Iran, but the Iranian mirror entity has yet to be established and should it go ahead would initially only deal in products such as pharmaceuticals and foods, which are not subject to U.S. sanctions.

Diplomats have that in any case they fear U.S. blowback, while Iranian officials have repeatedly said Instex must include oil sales or provide substantial credit facilities for it to be beneficial.

“The deal is on the brink. The message on Monday will be to show EU unity, but make it clear to Iran that it needs to come back into line,” said a European diplomat. “For now nothing is reversible so we have more room for diplomacy.”

(Additional reporting by Robin Emmott, Marine Pennetier in Paris and Parisa Hafezi in Dubai Editing by Susan Thomas)