Guest blog post by Georges Ugeux, former president of the European Investment Fund and Group EVP International of the New York Stock Exchange. He teaches international banking and finance at Columbia Law School.
Persia has been an integral part of European civilization since the 6th century BC. It was the centre of the world for centuries. Europeans have more Persian roots that Arab roots. Interaction between European and Iranian leaders and companies is natural, from a historical and contemporary perspective. Iran counts on European leadership not to go back to the decades of restrictions and sanctions under the threat of the United States. The Iran agreement raised unique hopes. Today, with the US withdrawing, opportunities are human, social and cultural. They also are political and economic.
The Iran deal is neither one-sided nor inefficient – and is essential to nuclear non-proliferation
The Iran agreement – officially called the Joint Cooperation Plan of Action (JCPOA) – provides for limitations on the development of nuclear military weapons by Iran. Iran complied with the rules. The inspectors confirmed that fact. The agreement is the only shield we have against the proliferation of nuclear weapons to Iran. In that sense, it is neither one-sided nor inefficient.
It is supported for that reason by Russia, China and the signatories of the Non-Proliferation Treaty (NPT), a landmark international treaty whose objective is to prevent the spread of nuclear weapons and weapons technology, to promote cooperation in the peaceful uses of nuclear energy and to further the goal of achieving nuclear disarmament and general and complete disarmament.
There is no alternative to the JCPOA to protect the world against a nuclear attack by Iran, While Israel legitimately fears a nuclear attack, it should not forget that it does have the nuclear arsenal Iran does not have.
Iran has announced that it will stick to the agreement provided that the Europeans stay in it.
The White House tries to dismantle multilateral cooperation
There is no rational reason for the US to withdraw from the Iran agreement. It is a result of a man who does not understand multilateralism. It is the case for the Paris Environment agreement (COP 21), the Trans Pacific Partnership (TTP) or the North American Free Trade Agreement (NAFTA). The current administration viscerally opposes to any form of multilateral cooperation and is even threatening NATO and the United Nations.
The US have never been great supporters of multilateral agreements. They were in favour of the International Criminal Court, to hold those accountable for their crimes – provided that US citizens were exempt, hence their refusal to join.
This US President only believes in bilateral negotiations. It is up to its counterparts to decide whether they want to accept that weak negotiation position or stick with other allies. The three European leaders, Teresa May, Emmanuel Macron and Angela Merkel fell into that trap: they thought that, in their individual styles, they could convince Trump to stay course on the various agreements. Canada and Mexico are experiencing the same on NAFTA.
Disenclaving Iran from the claws of financial isolation
I had serious conversations with the Iranian leadership in Tehran over the past two years.
Their priority is to disenclave Iran financially and allow a flow of capital between Iran and the rest of the world through the Eurozone. The US dollar (as BNP Paribas found out) is a weapon used by the US to restrict trade and commerce with Iran. By using the US dollar to extraterritorially sanctioning the countries it does not like, the US is effectively excluding its currency as part of the Iranian solution.
Europe should counter the US Treasury who announced this week they would withdraw the license of Boeing and Airbus to sell planes to Iran. We need to challenge this type of outreach of the US. It is critical to call the US to the World Trade Organization. If retaliation is needed, it might be the only thing Donald Trump understands. He may believe he masters the Universe, but Trump will not be able to deprive Boeing and Airbus of a $ 40 billion market.
The end of the World War II leadership of the US
I have witnessed close and personal the demise of the US leadership ever since I left the European Investment Fund to become the Executive Vice President for Research and International of the NYSE in 1996. I am a dual citizen of Belgium and the US.
The US have become, under a series of administrations, an addict to military conflicts that they could not win: Vietnam, Iraq, Afghanistan and Syria to name a few. Their military size and sophistication makes their threat dangerous; nobody wants to cross the US military establishment. Thanks to the leadership of China and the remarkable statesmanship of the South Korean President, a nuclear confrontation seems to be receding and makes it difficult for Trump to conduct a war.
Today that leadership is, however, eroding on several fronts: morally, financially, socially and intellectually. Overturning Parent Parenthood, Obamacare. The assistance to immigrants is now the legacy of a President who fundamentally hates anybody who is not a white male supremacist.
Peace will only be possible if European leaders recognize that the US is incompatible with their own ideas of democracy, privacy, solidarity and social values. It is time for Europe to grow up. It is also a unique opportunity.
Welcome to European leadership
It is only through the European collaboration that the effects of the US’ decision on Iran will have limited effects. This effort includes the United Kingdom. The brave attempts of Emmanuel Macron, Theresa May and Angela Merkel did not persuade Mr. Trump, but did consolidate their joint position. Hopefully, this will put an end to the notion that Europe is an all-time ally of the US.
It is important that Iran continues to interact with the free world. China will benefit from the collapse of the JCPOA, as they did for the past decade. Russia will benefit on the oil and gas.
At the centre of this web, Europe has all the tools to stand up for its values and to keep the Iranian deal alive. It is the world’s best interest. The US will scream: let the pit-bull bark. The long term counts.Guest contributor