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Europe unveils financial aid package for Iran

The European Commission said the multimillion-dollar package is part of an effort to keep the U.N.-backed nuclear agreement with Iran functioning.

By
Daniel J. Graeber
European Union foreign policy chief Federica Mogherini (R) unveiled a multimillion-dollar support package to help prop up an Iranian economy under U.S. sanctions pressure. Photo by Maryam Rahmanian/UPI
European Union foreign policy chief Federica Mogherini (R) unveiled a multimillion-dollar support package to help prop up an Iranian economy under U.S. sanctions pressure. Photo by Maryam Rahmanian/UPI | License Photo

Aug. 23 (UPI) -- The European Commission stated Thursday that a multimillion-dollar assistance package for Iran was a sign it meant to keep the U.N.-backed nuclear deal alive.

"Since the renewal of the EU-Iran relations as a result of the Iran nuclear deal, cooperation has developed in many sectors," Federica Mogherini, the European foreign affairs representative, said in a statement. "We are committed to sustain it and this new package will widen economic and sectoral relations in areas that are of direct benefit to our citizens."

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The commission announced Thursday it adopted its first assistance program that provides $20.8 million to support an Iranian economy under U.S. sanctions pressure.

U.S. President Donald Trump in May erased the U.S. signature from the Joint Comprehensive Plan of Action, a multilateral agreement that gave sanctions relief to Iran in exchange for peaceful nuclear commitments. Trump argued the deal was flawed and his announcement set a clock ticking on renewed sanctions.

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By November, those sanctions will hit the Iranian oil sector and potentially sideline around 1 million barrels of oil per day from a market where spare capacity is at a premium.

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European Commission President Jean-Claude Juncker after Trump's announcement said there was a unified position in Europe that respecting the U.N.-backed agreement with Iran was essential for peace. So long as Iran upholds its end of the bargain, European powers will stay in the deal, he said.

The commission stated Thursday the first tranche was part of a broader $58 million package for Iran.

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"They are part of the renewed cooperation and engagement between the European Union and Iran following the conclusion of the Joint Comprehensive Plan of Action," the commission's statement read.

Blocking statutes enacted by the European Commission were aimed at protecting companies that still do business with Iran, though French supermajor Total announced earlier this month it was leaving the country's energy sector.

Trump has said that any company that continues to work with Iran would be cut off from the U.S. economy. Earlier this week, German Foreign Minister Heiko Maas proposed the creation of the European equivalent of the SWIFT payment scheme to keep financial channels with Iran open.

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SWIFT, based in Belgium, had no statement. Bypassing that mechanism would theoretically give European financial maneuvers freedom from U.S. sanctions.

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