France proposes $15bn of credit lines for sanctions-bashed Iran if US gives nod

France on September 3 proposed offering Iran around $15bn in credit lines until year-end if Tehran comes fully back into compliance with the 2015 nuclear deal, although the move hinges on Washington not blocking it, Western and Iranian sources were cited as saying by Reuters on September 3.

French Foreign Minister Jean-Yves le Drian said talks on the credit arrangement, to be guaranteed by Iranian oil revenues, were continuing, but US approval would be crucial to going ahead. French Finance Minister Bruno Le Maire was due in Washington on September 3 to discuss the credit mechanism and see what the US might accept.

The idea is “to exchange a credit line guaranteed by oil in return for, one, a return to the JCPOA [Joint Comprehensive Plan of Action, as the nuclear deal is formally named] ...and two, security in the Gulf and the opening of negotiations on regional security and a post-2025 [nuclear programme],” Le Drian told reporters. “All this (pre)supposes that President Trump issues waivers.”

On the last day of his visit to Biarritz in France for the end of August G7 summit, Donald Trump indicated he might be open to some economic easing for Iran if it was provided in advance of talks with Iranian President Hassan Rouhani.

Trump told a news conference: “[…] they may need some money to get them over a very rough patch and if they do need money, and it would be secured by oil, which to me is great security, and they have a lot of oil, but it is secured by oil, so we are really talking about a letter of credit. It would be from numerous countries, numerous countries.”

At the point at which he spoke, there seemed to be some prospect of Rouhani agreeing to nuclear deal talks if the US relented on its “economic war”, but on September 3 the Iranian president appeared to definitively slam the door on the prospect of bilateral negotiations between Tehran and Washington.

Rouhani said Iran’s standpoint was that the removal of sanctions against it would allow for multilateral talks with parties including those who signed a nuclear accord in 2015—along with Iran, they are the US, UK, France, Germany, Russia and China.

Speaking at an open session of parliament, Rouhani added that Iran was ready to further reduce its commitments to the 2015 deal "in the coming days" if current negotiations fail to yield any results. "No decision has ever been taken to hold talks with the US.and there has been a lot of offers for talks but our answer will always be negative," Rouhani said.

Trump unilaterally pulled the US out of the multilateral nuclear deal in May 2015. It was drawn up to assure Iran it would gain non-sanctioned access to world trade in return for compliance with curbs on its nuclear development that would keep it purely civilian in nature.

UN inspectors had never questioned Iran’s compliance and Europe’s major powers protested at the US move to switch to a policy of ultra-aggressive sanctions designed to strangle Iran’s economy and force concessions on its nuclear and ballistic missile programmes and backing for militias across the Middle East who are variously enemies of Israel and Arab allies of Washington. However, the sweeping nature of the sanctions has provoked a huge drop in European trade and investment with Iran, despite promises from the Europeans that they would commit to significant measures to protect the Iranians from the US measures. EU member states have not even managed to come to Iran’s assistance to help it battle the American plan to force lifeline Iranian oil exports to zero, such is the anxiety among commercial parties that they could be hit with secondary sanctions freezing them out of the global financial system and US market.

It is this lack of help in facing the oil sanctions that has angered the Iranians to the point where they have started gradually started moving towards the nuclear deal exit door by incrementally reducing their compliance with its measures. Europe has been served notice that unless meaningful economic help is forthcoming soon, Iran will be out the door.

French President Emmanuel Macron has spent the summer trying to create conditions that would bring Iran and the US back to the negotiating table.

An Iranian delegation was in Paris on September 2. It included oil and finance officials who entered into marathon talks to fine-tune details of credit lines that would give Iran some respite from sanctions that have sent its economy back into a bitter recession.

“The question is to know whether we can reach this $15 billion level, secondly who will finance it, and thirdly we need to get at the very least the tacit approval of the United States. We still don’t know what the US position is,” one source aware of the negotiations told Reuters.

The news agency also quoted an Iranian official as saying: “Although the EU and particularly France have goodwill, they should convince the U.S. to cooperate with them ... If not, Iran is very serious about decreasing its nuclear commitments. There is no logic to respect the [nuclear] deal, if it has no benefits for us.”

Behrouz Kamalvandi, spokesman for the Atomic Energy Organization of Iran (AEOI), meanwhile, said on September 3 that Iran was capable of resuming enrichment of uranium to 20% fissile purity within two days. Twenty percent purity is considered an important intermediate stage in moving towards producing the 90% pure fissile uranium needed for an atomic bomb. Iran, however, has said a fatwa from the supreme leader means it would be forbidden for the country to attempt to build a nuclear weapon.