Wednesday, October 1st, 2014

The Obameter

Work to persuade the European Union to end credit guarantees to Iran


"Barack Obama and Joe Biden would work with key European allies to persuade the European Union as a whole to end its practice of extending large-scale credit guarantees to Iran."


Updates

EU clamps down on Iran but Obama’s role is minor

As a candidate four years ago, Barack Obama promised to enlist the European Union in the effort to put financial pressure on Iran to end its nuclear ambitions. He said he would pressure the EU to stop providing big credit guarantees to Iran.

In October, he got his wish when EU foreign ministers took steps to punish Iran financially.

Citing nuclear proliferation concerns, the EU banned all financial transactions between European and Iranian banks unless they relate to humanitarian aid. It also prohibited the export of materials and metals used for industrial or military purposes.

On credit guarantees, the EU "also decided to stop supporting trade with Iran through new short-term export credits, guarantees or insurance. Medium- and long-term commitments were already previously prohibited,” according to a press release.

Jay Carney, the White House spokesman, told reporters when the sanctions were announced that the Obama administration was turning up the heat. "Rallying the world to isolate Iran and increasing the pressure on its leadership so that they stop pursuing a nuclear weapon has been a top priority for the president since the day he took office.”

But there's considerable disagreement about how effective Obama has been.

"Everything that's happened on European guarantees has happened internally in Europe or not at all,” said Danielle Pletka, a Middle East scholar at the conservative American Enterprise Institute. "He has not helped at all because he has no credit and no leverage.”

She also noted that earlier this year, when members of Congress pushed for tougher sanctions, Obama resisted, and the White House has granted numerous waivers to countries that continue to purchase Iranian oil in violation of sanctions.

Back to the promise at hand: Obama pledged to work with the EU to end credit guarantees to Iran. While his tactics may not be the reason, Obameter ratings are about outcomes and the EU did impose stringent financial sanctions. We rate this a Promise Kept.

Sources:

Council of the European Union, "Iran: EU strengthens sanctions over lack of progress in
nuclear talks,” Oct. 15, 2012

Los Angeles Times, "Obama administration takes back seat on Iran sanctions,” Feb. 17, 2012

Wall Street Journal, "EU Approves New Iran Sanctions,” Oct. 15, 2012

Interview with Danielle Pletka, American Enterprise Institute, Dec. 10, 2012

New York Times, "Iran Face-Off Testing Obama,” Jan. 17, 2012, via Nexis

New York Times, "Deal Struck To Tighten Sanctions Against Iran,” July 31, 2012, via Nexis

Germany cracks down some on federal export credit guarantees to firms doing business with Iran

President Barack Obama spoke often in his first year in office about the need for the international community to tighten sanctions against Iran.

On Sept. 25, 2009, Obama, in a joint meeting with French President Nicolas Sarkozy and British Prime Minister Gordon Brown, announced that the three countries had presented evidence to the International Atomic Energy Agency that Iran has been building a secret uranium enrichment facility that would give it the ability to build a nuclear weapon.

Both Sarkozy and Brown said if serious change was not undertaken by Iranian leaders, they were prepared to implement further and more stringent sanctions.

But none of the three leaders spoke specifically about credit guarantees to Iran. And we couldn't find any public statements from Obama in which he talked in that level of detail about proposed sanctions.

For example, in his Nobel Prize acceptance speech on Dec. 10, Obama spoke in more general terms.

"But it is also incumbent upon all of us to insist that nations like Iran and North Korea do not game the system," Obama said that day in Norway. "Those who claim to respect international law cannot avert their eyes when those laws are flouted. Those who care for their own security cannot ignore the danger of an arms race in the Middle East or East Asia. Those who seek peace cannot stand idly by as nations arm themselves for nuclear war."

But that doesn't mean the Obama administration hasn't pushed European leaders in private.

In late January 2009, the German newspaper Handelsblatt reported that German Chancellor Angela Merkel instructed the economy minister to crack down on federal export credit guarantees to German firms seeking to do business with Iran, according to a Reuters story. The German paper reported that the move was made in reaction to pressure from the United States and Israel. Nonetheless, Germany continues to be one of Iran's strongest trading partners, and exports to Iran have risen.

President Obama has not made this promise a public priority, but Merkel's move suggests that conversations are occurring behind the scenes. And so we'll move this one to In the Works.

Sources:

White House Web site, Remarks by President Obama and President Medvedev of Russia after Bilateral Meeting , Sept. 23, 2009

White House Web site, Remarks by the President at the Acceptance of the Nobel Peace Prize , Dec. 10, 2009

New York Times, "German Jews oppose trip to Iran," by Judy Dempsey, Dec. 2, 2009

Reuters, "Germany Said To Crack Down On Iran Business," Jan. 26, 2009

New York Times, "Statements by Obama, Brown and Sarkozy," Sept. 25, 2009

Wall Street Journal, "West Raps Iran Nuclear Site," by Jonathan Weisman, Siobahn Gorman and Jay Solomon, Sept. 26, 2009

Heritage Foundation, "The German Elections: False Dawn for the Obama-Merkel Era," by Sally Mcnamara, Oct. 20, 2009

Brookings Institution, "Iran Sanctions: Who Really Wins," by Djavad Salehi-Isfahani, Sept. 30, 2009