Europeans need to do more
For European businesses, it is a period of high uncertainty in Iran. No one can envy the challenges of decision-making facing their CEOs.
As Sigmar Gabriel, former German foreign minister, states in Der Tagespiegel of Jan. 6, 2020, the assassination of Iranian Major General Qasem Soleimani ordered by US President Donald Trump constitutes a turning point in the region.
The rules of the game have changed, Iran will retaliate and European business will have to navigate the stormy waters that ensue.
It will not be easy
In the assessments of many business executives, European banks will now be even more risk-averse when dealing with Iran business. It seems unlikely that the slow practical progress with INSTEX will speed up soon. The prospect of even more stringent US sanctions may emerge. It seems more doubtful whether the Joint Comprehensive Plan of Action, the official name of the nuclear accord Iran signed with six world powers, can survive.
The speed and extent of business reforms in Iran remain unpredictable, in the view of many executives. And the chances of broader armed conflict, miscalculation and unintended consequences are high.
In this difficult period, European businesses look to their governments for support. However, these governments, like other actors, were caught completely by surprise by the attack. So was many of Trump's security staff, if whistleblower accounts on social media are to be believed.
Jeanine Hennis, former Dutch defense minister and the United Nations envoy in Iraq, stated that when she heard the news, she reread the report three times and thought it was fake news.
The European Union has again shown that it may roar economically in the international domain, but that politically and militarily, it is a paper tiger.
The statement of the French, British and German leaders on Jan. 6 asked all parties to deescalate, but it only admonishes Iran.
No mention is made of Trump's unilateral violation of JCPOA and economic warfare that led to the current situation. No mention is made of the crossing of redlines in the international order. No admonishment is given regarding his statement that he would be willing to attack Iran's cultural sites, which repulses most Europeans, contradicts US defense handbooks and would be a war crime.
Gabriel writes that the proposal of French President Emmanuel Macron a month ago deserves reconsideration. Macron's proposal is to offer credit to Iran in the double digit billions by national reserve banks or the European Central Bank. In this way, the banks would execute their mandate to protect the euro and the EU's actions would gain in credibility. He suggests that such an offer could be part of the de-escalation ladder.
However, a country has the right to determine how they respond to a disproportionate action like that ordered by Trump. For the time being, European businesses will have to navigate in waters largely outside their control.
As Gabriel rightly says: European governments need to take political risks, even if it would result in a bigger political conflict with the current US president.
European politicians will simply have to do better to keep their credibility in Iran.