Iran Crisis Trump Drives Wedge Between Germany and France

Donald Trump's move to withdraw from the nuclear agreement with Iran should have pulled the European Union together, but Angela Merkel has instead chosen to appease the U.S. president. Criticism of her stance is mounting in Brussels and Berlin. By SPIEGEL Staff

French President Emmanuel Macron
Dimitar Dilkoff / AFP

French President Emmanuel Macron


It isn't often that Peter Altmaier, who is about as pro-European as they come, casts doubts on proposals coming out of Brussels. But last week, he opposed a plan by the European Commission to pay damages to European companies affected by American sanctions against Iran. "We have no legal possibility to protect or make exceptions for German companies against decisions made by the American government," the German Economics minister said. He warned against discussing "premature proposals."

But nobody in Brussels cared to listen. By the time German Foreign Minister Heiko Maas met with his counterparts from Britain and France a few days later, Federica Mogherini, the European Union's top diplomat, had prepared a paper that paved the way for the very measures Altmaier had warned against.

The result is that nine days after U.S. President Donald Trump's decision to withdraw from the nuclear deal with Iran Europe has found an initial response to Washington's affront. The European Commission has announced that it intends to protect European companies from American sanctions with the so-called "blocking statute."

It wasn't the answer that Germany -- or at least its chancellor and its economics minister -- would have given. It was the answer of Emmanuel Macron, the politician currently at Europe's helm. Behind the scenes, it was largely Macron applying the pressure, whereas Germany seemed to shy away from a confrontation with Trump.

From the very start, Berlin and Paris have been charting different courses on the future of the trans-Atlantic relationship. Should Europe appease Donald Trump or defy him? Should Europe risk a trade war with the U.S. over its Iran decision? Do the Europeans stand a chance of swaying Trump with resolute resistance or will the situation continue to escalate?

It's an age-old question of foreign policy, and also one of the most important: finding the correct response to pressure and coercion. Is appeasement the right way to go? Or will that just encourage the bullies of international politics? It has traditionally been a question most often raised when dealing with Vladimir Putin and the other strongment of the world.

Maximum Pressure

There is no doubt about the Americans' determination. Trump prefers applying maximum pressure -- and makes no exception for America's allies in Europe. Richard Grenell, the new American ambassador in Berlin, has very openly linked the issue of Iran to the trade dispute between the U.S. and Europe. Last week, Grenell told the New York Times that if the Europeans back Trump in his position on Iran that the president might not levy punitive tariffs against Europe on steel and aluminum.

Conversely, that also means that if the Europeans don't fall into line with Trump that they will be facing a trade war. "With friends like that, who needs enemies," EU Council President Donald Tusk said earlier this week.

Europe, of course, can only get anywhere if it agrees on a joint position. And that is proving difficult for Berlin. The Germans would like to rescue the Iran deal, but they don't really want to fight to do so. Paris, on the other hand, is prepared for confrontation. "Berlin is focusing more on appeasement whereas Paris fears that each concession will just encourage Trump to act even more brazenly," says one high-ranking EU official.

And the difference in tone between Berlin and Paris is indeed conspicuous. "There's nothing we can do about it" -- that, essentially, is the message from the Chancellery in Berlin. In Paris, on the other hand, officials are saying: "We can't accept that."

It the usual reflexive tendency: Germany shrinks in timidity while France proudly stands its ground. "If we accept that other major powers, even if they are our allies, decide for us, then we are no longer sovereign," Macron warned at this week's EU summit in Sofia.

The French president has recognized the opportunity that opposition to the U.S. sanctions presents. It provides him with a perfect chance to prove to the French people why they really need Europe. He believes that only Europe can stand up to the deal-breaking Americans.

In Berlin, meanwhile, the focus is on "realpolitik" -- the notion that there isn't much Europe can do to oppose Trump. Officials in the German capital believe that the U.S. president will play hardball when it comes to Iran.

A Lack of Political Will

What really appears to be the problem, however, is a lack of political will. When push comes to shove, the Iran deal is likely less important to Altmaier than the dispute over the Trump administration's threat of punitive tariffs on steel and aluminum imports from Europe. He wants to prevent the dispute from boiling into a full-fledged trade war that would spread to the heart of the German economy -- the automobile industry. As a major exporter, America's punitive tariffs would hit Germany much harder than they would France.

"The U.S. can't be the world's economic police," French Economy Minister Bruno Le Maire said earlier this month. Le Maire and French Foreign Minister Jean-Yves Le Drian called a demonstrative joint press conference inside the monumental Finance and Economics Ministry in Paris looking like they were ready go toe-to-toe with Washington.

Le Drian spoke of "our determination to fight to ensure that the decisions taken by the United States don't have any repercussions on French businesses." Le Maire added: "All of Europe is faced with the challenge of asserting its economic sovereignty."

Former French Prime Minister Jean-Pierre Raffarin, who coordinated resistance to Georg W. Bush's invasion of Iraq between Paris, Berlin and Moscow, is even calling for the creation of a G-4 comprised of France, Germany, Russia and China in order to stand up to Trump. France still views itself as a global power and, as such, isn't afraid of patching together alliances that suit the moment.

That's still a bridge too far for Germany. For a person as committed to trans-Atlantic relations as Altmaier, the idea of an alliance with Russia and China against the United States is a nightmare scenario. This is further complicated by the fact that the alliance wouldn't just be against the U.S., but also Israel. Sources within the Chancellery openly admit that there is an Israeli component when it comes to the German government's approach with Iran. Whenever you speak about Iran, they say, you also have to have an eye to Israel.

But at the center of the dispute with the U.S. is the economy. In France, it's large multinational corporations like oil giant Total and carmaker Peugeot that would be hit by the American sanctions. In Germany, however, the share of small- to medium-sized companies that are not heavily dependent on U.S. sales is high. They would likely be able to continue doing business with Iran since U.S. sanctions wouldn't hurt them. Total, on the other hand, announced on Wednesday that it was suspending plans for a major project -- entailing the exploration of the Iranian South Pars gas field -- in the Persian Gulf.

Trade with Iran isn't of great significance for either Germany or France. Only 0.3 percent of French exports go to the country and only 0.2 percent of Germany's.

Symbolic Gestures

In other words, measures to protect European companies will for the most part only have a symbolic political effect. They're a signal to Trump that there are certain things the Europeans won't put up with. And a signal to the Iranians that the EU is truly fighting to save the deal. The reformers in Tehran need that signal to prevent hardliners from withdrawing from the nuclear deal.

Trading Partner Iran
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Trading Partner Iran

The blocking statute that the European Commission is currently pushing would fine European companies that obey the U.S. sanctions. At the same time, the EU would pay damages to companies that defy the U.S. sanctions. The European Council, the powerful body representing the EU member states, now has two months to act before the law goes into effect. Germany would only be able to stop it if there is a qualified majority on the council opposing the rule.

The "blocking actions" were originally agreed to by the EU in 1996 to counter U.S. sanctions against Iran, Libya and Cuba due to the effects they were having on European Union member states. At the time, Clinton moved to wave extraterritorial sanctions on EU companies doing business in those countries, so the statute was never applied.

Even though the chances are low of keeping companies in Iran, even with the statute in place, Foreign Minister Maas, in contrast to Altmaier, has still concluded that the EU move sends the right message to the U.S. administration.

Trading Partner USA
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Trading Partner USA

Altmaier, on the other hand, views the idea of the blocking statute critically. And the Chancellery even views it as "absurd." If Maas and Altmaier are unable to reach some kind of agreement on their position, then the German government's representative in Brussels will have to abstain from any vote -- which would provide further proof that it is Macron and not Merkel who is leading Europe at the moment.

Another idea envisions the European Investment Bank (EIB) becoming active in Iran. Back in November, EU foreign ministers instructed the bank to expand its mandate in order to make the financing of projects in Iran possible. But it could take quite a while until that actually happens. So far, the bank's External Lending Mandate has been changed. And since April, Iran has been included in Annex 2 of the "potential" countries that could obtain aid. Money, though, can only flow once a country has been placed on Annex 3 -- the level at which Lebanon finds itself.

The next step would be a framework agreement between the EU and Iran that would establish the basis for financing specific projects. The main problem here is that EIB is active in the U.S., the world's biggest financial market, and could be exposed to American sanctions there.

Growing Criticism

It's not just Macron who is heaping pressure on Chancellor Merkel. There are also members of her own cabinet and party who are critical of how lightly the chancellor is treading on the subject. On Tuesday, Maas expressed agreement in Brussels with his French counterpart, who is pushing together with top EU diplomat Federica Mogherini for measures to be taken. Maas said in Brussels that Europeans aren't powerless and that, even if it won't be easy, there are surely "possibilities and instruments" for acting.

German Chancellor Angela Merkel at the EU-Western Balkans Summit in Sofia on Thursday.
Dimitar Dilkoff / AFP

German Chancellor Angela Merkel at the EU-Western Balkans Summit in Sofia on Thursday.

"We shouldn't focus too much on being accommodating or appeasement," says Roderich Kiesewetter, a member of Merkel's conservative Christian Democratic Union (CDU) who is also the party's foreign policy point person in parliament. "Instead, we should develop a more self-confident European attitude. The French are right when they say we shouldn't be sitting on our hands and doing nothing. It's only on the basis of clear positions and determination that we can continue a dialogue with the U.S. that will serve our interests."

There has also been vocal criticism in Brussels of Merkel's cautious position. "We're just encouraging further measures by kowtowing," says Elmar Brok, a prominent member of the European Parliament with the CDU. "That's why we need to draw a line." Trump may not like strong negotiating partners, he adds, "but he does respect them just as all strong people only respect strong people." A signal is needed, he says, "to show that we won't put up with everything." Yielding to Trump, Brok warned, would merely reinforce the president's assessment that he can do whatever he wants to the Europeans.

Iranian Foreign Minister Mohammad Javad Zarif, for his part, said he would not accept a "there's nothing we can do" attitude from the Europeans. "The EU, Russia and China together are no less powerful than the U.S.," says Ali Majedi, Iran's ambassador to Berlin. He says the Europeans demonstrated success in standing up together against Trump in the dispute over punitive tariffs. Now, he says, Tehran expects the same with the nuclear deal.

"If the EU, Russia and China use the instruments available to them to enable Iran to benefit economically from the deal, then we will also stick to the agreement," Majedi says. Then, he says, a discussion could take place about Iran's role in the region or its controversial ballistic missiles program, but it would all have to be done independently of the nuclear agreement.

"If there are expectations that Iran will renegotiate the deal and make further concessions, then that is unacceptable," he adds.

By Markus Becker, Christiane Hoffmann, Peter Müller, Christoph Schult and Gerald Traufetter

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