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* Missed messages on Iran  Robert Kagan

* Envoy Condemns US Officials' Irresponsible Comments on Iran  News Report

* 'Israel will be destroyed if it attacks Iran'  News Report

* Warning of long war if Israel attacks Iran  News Report

* Iran unlikely to halt nuclear program, secret letters show  News Report

* Iran denies Ahmadi-Nejad was attacked  News Report

* Sanctions set stage for a new push on Iran  News Report

* اطلاعیۀ آیت الله منتطری دربارۀ حرام بودن مقاومت در برابر رأی مردم  Ali Behrooz

* لیست اسامی با حروف فارسی، تا تاریخ 08/09/08  Ali Behrooz

* War of words, or words of war  Ali Behrooz

* Could Israel use submarines against Iran?  News Report

* Iran deplores UAE claim on 3 islands  News Report

* 'Iran will respond to any attack'  News Report

* Carter to meet Hamas leadership in Cairo  News Report

* No Peace Without Hamas  News Report

* Ahmadinejad again voices Sept. 11 doubts  News Report

* Clinton, Obama tackle Iran issue in debate  News Report

* Bomb kills at least 9 in Iran mosque  News Report

* Iran demands Israel stop force threats  News Report

* Ahmadinejad to dismiss 2 cabinet ministers in Iran  News Report

* Iran: Naval encounter routine check  News Report

* Tony Blair's Palestine  News Report

* Clinton attacks Obama and McCain over Iraq  News Report

* Reza Pahlavi: Leadership for Democracy in Iran  News Report

* Petraeus: Return to 'pre-surge' troop levels, then wait  News Report

* Blast rocks US complex in Sanaa  News Report

* Clashes in Nile Delta after strike aborted  News Report

* When a great power goes mad  News Report

* Iranians defy censor with bootleg DVDs  News Report

* Putin says Iran is no threat  News Report

* Creating a US-Iran Bridge  News Report

* Court removes PKK from terror funds list  News Report

* 12 militants wanted by Israel flee Palestinian jail in West Bank after fight  News Report

* Limiting Tehran’s Influence?  Ali Behrooz

* UAE detains ship as grip on Tehran tightens  News Report

* Iranian critic not guilty of espionage  News Report

* Israelis and Palestinians pledge to reach peace pact by end of 2008  News Report

* Conference in Qom focuses on Iran-US challenges  News Report

* FM spokesman: Iran's plan on Iraq not put for voting  News Report

* Iran's top dissident cleric calls for U.S. talks  News Report

* Islamic militants take fight against Musharraf to 'Pakistan's Switzerland'  News Report

* 'Desperate' Musharraf declares martial law  News Report

* US Sanctions on Iran Leave Europeans in a Quandary  Sir Cyril Townsend

* After Thamilselvan  News Report

* Analysis: Is Abbas playing his cards right ahead of ME summit?  News Report

* Bahrain accuses Iran of nuclear weapons lie  News Report

* Senior Tamil Tiger leader killed  News Report

* US declares PKK 'a common enemy'  News Report

* Iran urged to join Gulf nuclear deal  News Report

* Iran's leaders need enemies like Bush, and at every turn he obliges them  News Report

* Giuliani hits Democrats on Iran  News Report

* Iran: We have no information on Arad  News Report

* Clinton hails US move on Iran  News Report

* Israel to prepare for potential missile attack  News Report

* US First Lady in Kuwait  News Report

* Rice: Mideast solution in jeopardy  News Report

* Kurdish fighters defy the world from mountain fortress as bombing begins  News Report

* Protesters confront Condoleezza Rice as she testifies on Middle East  News Report

* Showdown With Iran  News Report

* U.S. outlines Baghdad security handover plan  News Report

* Poll shows global opposition to Iran - and U.S.  News Report

* Iraq promises Turkey it will curb Kurdish rebels  News Report

* Big shoes to fill  News Report

* LUKOIL says halts Iran oil project on US sanctions  News Report

* Three soldiers killed in Darfur camp attack - UN  News Report

* There's a better - and cheaper - way that Washington can help Lebanon  News Report

* Lebanese patience for Nahr al-Bared displaced wears thin  News Report

* Iran, Syria urge diplomatic means instead of military incursion into Iraq  News Report

* Talabani refuses to deliver PKK leaders to Turkey amid protests against incursion  News Report

* Turkey vows to defeat PKK rebels  News Report

* Iran N-case on Olmert's Paris agenda  News Report

* Motaki (FM): US in No Position to Attack Iran  News Report

* We will fight to the death, Kurdish rebel leader vows from his hideout  News Report

* Deaths And Hostages In Border Clash  News Report

* Flash News: Kurdish separatistand 12 Turkish soldiers killed  News Report

* IRGC Commander:Aggressions to Be Reciprocated with a Rain of Rockets  News Report

* 2 leaders back Blair as European Union president  News Report

* Babacan stresses dialogue as key to solving Lebanese crisis  News Report

* Jordan hopes for positive outcome of Annapolis meeting  News Report

* Iran's nuclear negotiator resigns  News Report

* Larijani Resigns  Ali Behrooz

* NATO says shipment of roadside bombs was 'from Iran'  News Report

* Israel impeding effort to clear cluster bombs  News Report

* Bhutto defiant over bomb attack  News Report

* Democrats' stance on Iran criticized  News Report

* Top Palestinian negotiator may resign  News Report

* UN condemns killing of its truck drivers in Darfur  News Report

* Kurds sign oil deals beyond regional borders – former minister  News Report

* Jerusalem is ours, warns Likud  News Report

* Rice back in Israel after Egypt talks  News Report

* Haft Tapeh Sugar Cane workers in southern Iran go on strike  News Report

* Ahmadinejad: Caspian states to form economic cooperation organization  News Report

* Putin lands in Iran for nuke talks  News Report

* Mideast Conference and the Illusive Peace  News Report

* Coalition of the Reluctant  News Report

* World bank neglects African farming, study says  News Report

* Putin dismisses threat of assassination in Iran  News Report

* Israel signals readiness to cede parts of Jerusalem to Palestinians  News Report

* Christiane Amanpour: 'People think I relax with a Kalashnikov - I don't'  News Report

* After honeymoon, Sarkozy method poses three risks  News Report


Sanctions set stage for a new push on Iran
[ News Report]  [2010-08-06 07:08:26]
[Source: FT - 05/08/10]


Cliff Kupchan

Published: August 5 2010 22:53 | Last updated: August 5 2010 22:53

With the European Union’s adoption of tough sanctions last week, the west has finally succeeded in gaining leverage over Tehran. Reports this week of an assassination attempt against President Mahmoud Ahmadi-Nejad, whether accurate or not, will augment that leverage by causing jitters throughout the Iranian elite.

But this will not buy much unless it is used in concert with diplomacy; a diplomatic settlement of the nuclear crisis is the prize. Washington and Brussels should move quickly to use their new influence by crafting and offering Tehran a deal on the final status of its nuclear programme.

Diplomacy now has a better chance than in the past. The recent sanctions are the main reason for this. The UN passed a resolution on June 9, the US implemented additional measures on June 16, July 1 and August 3, and the EU adopted its surprisingly severe regime on July 26.

The new measures strike hard at Iran’s financial, energy, trade and transport sectors. Regarding finance, EU companies are now prohibited from providing insurance to Iranian companies, which impairs the movement of cargos to and from Iran. The EU has also frozen the assets of many Iranian banks. A new US law mandates sanctions on any foreign bank that does business with a US-sanctioned Iranian bank. Washington’s goal is to give foreign banks a choice of doing business either in the US or the Iranian market. Most will sprint from Iran.

Regarding energy, US measures expose any foreign company that exports petroleum to Iran to punishment, playing off Iran’s need to import more than 30 per cent of its gasoline needs. EU businesses are also now banned from new investment in the sector. Most European energy companies have already left Iran, but now the path back is blocked. On trade, EU governments and companies are now prevented from providing new medium or long-term trade financing to Iran. Finally, on transport, Iran’s state shipping line has been sanctioned and Iranian cargo planes are banned from Europe.

These sanctions will definitely hurt Tehran. The cost of doing business will rise for Iranian entities involved with foreign markets. Iran’s hydrocarbon production is now locked into a downward trajectory, as high quality western technology is off-limits. Given that oil exports currently account for roughly half of Iran’s budget revenue, a production decline will sting.

The Iranian regime is surprised at how hard it has been hit. Tehran has in the past reacted to sanctions with defiance. This time it has mixed harsh rhetoric with calls for a resumption of diplomacy in the autumn. There is a rare public debate in the Iranian press over the extent to which sanctions will hurt. Furthermore, Iran intends to embark within months on an ambitious programme to eliminate subsidies, which now cost roughly $70bn annually. That could be destabilising and Tehran will probably seek to avoid economic trouble on the foreign and domestic front simultaneously.

Washington and Brussels should move fast, before Iran adjusts to its new situation. The first challenge is to craft a common position on what kind of Iranian nuclear programme can be tolerated. Without this, the west will have no bottom line. First, Iran must agree to strict limits on the amount of low enriched uranium it can stockpile, as that material can be used to make a bomb. Second, the west must insist on very intrusive inspection rights. Finally, Iran must clarify credible allegations that it is taking steps to make nuclear weapons. Russia and China would be very likely to agree to this stance.

The west should stop insisting that Iran suspend uranium enrichment. Based on my discussions with Iranian leaders and elites across the political spectrum, Tehran will continue to refuse. But the west’s offer on the rest of Iran’s programme should be non-negotiable; Iran will try to chip away at every element and must be confronted with an unswerving position. If Iran accepts, it would receive the plethora of benefits currently on offer, including help obtaining light water reactors, permission to renew its civil aviation fleet and assistance with its energy sector. If Tehran refuses, the US, EU and other nations should impose even harsher sanctions.

The west has leverage. It is time to go for the gold – a diplomatic settlement of the nuclear crisis.


The writer is a research director at Eurasia Group and a former US State Department official

Copyright The Financial Times Limited 2010. Print a single copy of this article for personal use. Contact us if you wish to print more to distribute to others.

 





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