Ever since US President Donald Trump's withdrawal from the Iran nuclear deal in May 2018, the Iranians have consistently asked the Europeans to save them by establishing a mechanism to bypass sanctions. Europe, however, isn't quite capable of saving Iran from the US, even if it wanted to.
The mighty American economy, the dollar's dominance in global markets, and the exterritorial law that allows the US to impose sanctions on companies operating and engaging in business abroad will make it exceedingly difficult for Europe to withstand Washington's economic clout. Prior to Trump's withdrawal from the nuclear deal, Iran's economic growth was 4.2%. Since then it has shrunk by 6%. Inflation is skyrocketing and many Iranians don't receive a steady paycheck. According to experts, ongoing and additional sanctions are sure to exacerbate the economic crisis.
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Europe still believes it can bypass the American sanctions, despite the small odds. European companies still remember the hefty $9 billion fine levied against French international banking group BNP Paribas in 2014, after it violated economic sanctions against Cuba, Iran, Sudan, and Libya.
French Foreign Minister Jean-Yves Le Drian recently stated the nuclear deal was still alive and that Europe would continue honoring it as long as Tehran reciprocates. Annalisa Perteghella, a Middle East expert at the Italian Institute for International Political Studies, meanwhile, believes the nuclear deal is presently on life support.
The most Europe can do to bypass the sanctions is enact the "Instex" mechanism to facilitate money transfers and commerce with Iran. Experts, however, say Iran cannot seriously cope with the American behemoth. Like dominoes, European companies afraid of losing the US market are conceding to Washington's sanctions. Germany, for instance, doesn't want to lose its slice of the American luxury car market, and would rather avoid a clash with the US.
Europe hopes China and Russia will help it salvage the nuclear deal and work around the sanctions. But China is engaged in trade talks with the US and would like to distance itself from anything that could anger Washington. Russia, which wants to help Iran, knows it isn't an alternative to the US.
Hence we are left with mutual barbs; with Washington convinced it will eventually force Tehran to bend. Europe's weakness, Iran's lack of appetite for a military conflict with the US and the weight of sanctions are all paving the path for talks between Washington and Tehran to amend the nuclear deal. This appears to be Trump's true objective.
