Monday, June 30, 2008

Swan Song

Observing President Bush's farewell tour of Europe reminded me of Cynthia Heimel's ode to toxic relationships, Get Your Tongue Out of My Mouth, I'm Kissing You Goodbye!

Old Europe might have wished for a low-key, dignified, and not quite bittersweet parting with the arrogant troublemaker who brought it so much trouble.

However, students of Bush psychology will not be surprised that our lame duck prez insisted on one last degrading service from our European allies in order to demonstrate he still had the upper hand in the waning days of the dysfunctional partnership.

In this case, Britain and the EU meekly gratified President Bush on the issue of Iran sanctions.

On June 16, standing with President Bush, Gordon Brown announced that the EU foreign ministers' meeting that afternoon would impose new sanctions on Iran's Bank Melli.

Trouble is, he was wrong.

The EU foreign ministers meeting announced no new sanctions against Iran that day.


Because they didn't want to.

The Financial Times' Westminster blog explained the problem:

[T]he EU agreed (some weeks ago) on what action to take against Bank Melli. This is a significant step. But they have not agreed on when to take it. Downing St argue this is a formality and the sanctions will be imposed in coming weeks. Yet this gap is important, particularly as the EU has made a new offer to Iran to suspend its uranium enrichment programme in return for economic and political support. The Iranians have yet to respond. Mr Brown effectively punished Iran with the stick before Iran decided whether to take the carrot... it is hard to imagine the negotiators welcomed this surprise announcement, or relished explaining it to the Iranians. A decision like this is announced with the agreement of 27 EU foreign ministers, not after a UK/US bilateral. Unexpected moves like this do not help to build trust.

The FT quoted a diplomat as ranking this blunder as “a seven on a scale of ten”.

Was it a blunder? Or a piece of sabotage?

On June 21, the LA Times' Borzou Daragahi provided an interesting and circumstantial account of a deal that EU foreign affairs chief Javier Solana carried to Tehran on June 14: a six week freeze on sanctions while Iran continued to operate its uranium enrichment facility at Natanz without adding new capacity, to be followed by a six month freeze on all enrichment operations while negotiations took place.

Despite reports that the US "signed off" on the EU package, such a proposal would directly contradict the Bush administration’s bedrock position that Iran has to cease all enrichment before any negotiations can take place.

The money line from Daragahi's account:

[T]he proposal's 7 1/2 -month time frame would ride out the term of the Bush administration, which has repeatedly threatened military action to destroy Iran's nuclear facilities.

What we have here, ladies and gentlemen, is an apparent maneuver by the EU to move the Iran issue out from under George Bush's (and Dick Cheney's) baleful shadow, and kick can down the road to (hopefully) a Barack Obama administration.

President Bush's riposte: to kick the props out from under the EU proposal by armtwisting Gordon Brown to pre-emptively repudiate the key confidence-building measure at its heart: no new sanctions.

Faced with this embarrassing situation, the EU scrambled to accommodate President Bush while trying to maintain some semblance of credibility (and dignity) with Iran as a negotiating partner.

A week later, on June 23, the EU announced sanctions on Bank Melli, but trying to straddle the problem, according to Kuwait's Arab Times:

The EU official stressed the sanctions were based on measures agreed by the UN Security Council and that six powers — the five permanent members of the Council plus Germany — still sought an answer from Iran to their incentives offer. “We are continuing with the double-track,” the official said of the carrot-and-stick policy.

Correctly reading the signal that the EU wants them to keep cool, the Iranians oblige.

From the June 30 Tehran Times:

PARIS (IRNA) - Iran's Ambassador to France Ali Ahani said that the European Union (EU) decision to impose sanction on Iran's Bank Melli indicates lack of goodwill on the part of European side and such attempts are unacceptable.

Ahani made the remark in a meeting with Head of Parliamentary Assembly of the European Council Luise Maria Deping, adding that Iranian officials are studying a package of proposals from the Group 5+1, and that according to the common points in packages of proposals exchanged by Iran and Group 5+1, both sides can reach consensus during negotiations.

It seems apparent that Iran realizes that, despite US and Israeli demands for militancy, the EU can be cajoled and mollified at least until the Bush administration is out of office.

The only riposte left for the Bush administration is for John Bolton to spread dire warnings of an Israeli attack on Iranian nuclear facilities between the November elections and the January inauguration (presumably only if Barack Obama is elected; I assume the Senator McCain's “bomb bomb bomb Iran” chant is proof against any doubts of his fortitude), threats which I imagine are rather empty but are not doing oil prices or our reputation in Europe a world of good.

Aside from Daragahi's excellent piece, the reporting I came across on this new round of sanctions seemed, in general, to disregard some key points that I will take the liberty of making:

First, the United States is trying to impose a US anti-Iran sanctions regime on Europe that goes beyond explicit UN sanctions. US-led coalitions of the willing going beyond the UN have a rather bad reputation in Europe. Outside of France's President Sarkozy, nobody even professes to like them. The only way we get Europe to go along is through blatant arm-twisting and sub voce threats of dire actions against European banks by our Treasury Department if they continue to do business with Iran.

In other words, we don't intimidate, punish, or sanction Iran, with whom we have absolutely no relations. We intimidate, punish, and sanction our allies. Inside the US, for reasons that bewilder me, nobody seems to see this as a problem.

Second, the sanction was a partial sanction, much less than the wholesale sanction of the entire Iranian banking sector that the US has been threatening. It's virtually meaningless.

Reportedly, Iran pulled $75 billion out of Europe as a precaution against a major sanctions action and I have a feeling the European banking system is going to miss that $75 billion more than Iran is going to miss Bank Melli's operations in Paris, London, and Hamburg.

Thirdly, the Europeans are not keen on sanctions because they understand that following Washington's lead is driving Iran's money, business, and strategic focus away from Europe and toward Asia in general and China in particular. I covered this matter in considerable detail in a piece I wrote for Japan Focus, but here I will confine myself to quoting from the Arab Times on the consequences of Iran sanctions:

"[The sanctions'] impact (will be) more expensive imports," Iranian analyst Saeed Laylaz said of the impact on Iran of the move against Bank Melli, a key supplier of export guarantees. "The economy of Iran will be more dependent on Chinese markets," he added of a growing shift in Iran's focus to Asia that has seen Europe's share of the Islamic Republic's trade dwindle to 25-30 percent from twice that five years ago.

In summary, the EU is trying to extricate itself from a misconceived, ineffective, and financially costly sanctions regime.

For his farewell appearance in Europe, President Bush didn't try to accommodate the concerns of the European governments. Instead, he undercut and humiliated them with a pre-emptive announcement in an attempt to make their negotiations with Iran founder.

That's a good-bye kiss that would leave a bad taste in anybody's mouth.

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