EIB casts doubt over EU plan

Measure to urge lending arm to invest in Iran deemed difficult

BRUSSELS - The European Investment Bank's global operations would be put at risk if it were to invest in Iran, its president said on Wednesday, casting doubt on the European Union's ability to deliver on its pledge to save a nuclear deal with Teheran that Washington has abandoned.

An EU plan urging its lending arm to invest in Iran as part of efforts to help keep money flowing to Teheran is proving difficult to implement as businesses fear the reimposition of US sanctions.

EIB President Werner Hoyer said that while he supported EU efforts to keep alive the 2015 deal which curbed Tehran's nuclear ambitions, Iran is a place "where we cannot play an active role".

The EU's not-for-profit lender fears any dealings with Iran would jeopardize its ability to raise money on US markets and have far-reaching consequences for its operations. Hoyer said the EIB is indebted by 500 billion euros ($581 billion) in bond issues.

After US President Donald Trump pulled out of the Iran deal with world powers on May 8, Iran has threatened to stop complying with curbs on its nuclear program if it fails to see the economic benefits of relief from sanctions under the deal.

Upping the stakes on that threat, the head of Iran's atomic agency said on Wednesday that the country has built a factory that can produce rotors for up to 60 centrifuges a day.

The other signatories to the deal - the EU, China and Russia - want to salvage the accord to prevent Teheran from developing a nuclear weapon.

EU measures to try to compensate for the impact of US sanctions and guarantee Iranian oil revenue include EIB lending, a measure to shield EU companies from US secondary sanctions, state-backed export guarantees and a plan that EU governments make direct money transfers to Iran's central bank.

It has also sought US waivers from sanctions for big European businesses.

While the EU has agreed to add Iran to the list of countries with which the Luxembourg-based EIB does business from August, a spokesman for the EU executive said the change "does not force the EIB to begin lending".

The EIB will only do business there if it receives approval from its board of governors, which are the finance ministers of the EU's 28 member states, and on the basis of finding suitable projects to invest in.

High risk

Central bank transfers to Iran to pay for oil imports and avoid US sanctions, a measure proposed by the European Commission in May, are still under discussion, diplomats said.

Meanwhile, the EU has established an $80 billion fund to give credit to small and medium enterprises doing business with Iran, an Iranian official said on Wednesday.

European authorities are interested in resisting US restrictions on cooperation of European countries with Iran, said Mohammad-Hossein Adeli, former secretary-general of the Gas Exporting Countries Forum, according to The Teheran Times newspaper.

EU officials hope their so-called blocking statute to take effect in early August will shield small and medium-sized businesses working in Iran. The statute bans any EU company from complying with US sanctions and does not recognize any court rulings that enforce US penalties.

Reuters - Xinhua

(China Daily 07/20/2018 page11)