Last updated: February 27, 2013 5:30 pm

Iran agrees to follow-up nuclear talks

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From left: Ma Zaoxu, assistant minister of Foreign Affairs of China; Hans-Dieter Lucas, political director of the Foreign Ministry of Germany; and Sergey Ryabkov, deputy foreign minister of Russia listen during talks on Iran's nuclear program in Almaty, Kazakhstan, on Febreuary 27 2013©AP

Nuclear talks: international delegates listen during talks on Iran’s nuclear programme in Almaty, Kazakhstan

Iran raised fresh hopes on Wednesday that it might be open to a diplomatic solution to the decade-long stand-off over its nuclear programme by agreeing to hold more talks with world powers on the issue in the next two months.

After a two-day meeting with the six world powers in Almaty, Kazakhstan, Iran agreed to attend technical discussions in Istanbul on March 18 on a new package of confidence-building measures laid before it by the international community.

This will be followed by another full-scale meeting with diplomats from the six powers – the US, UK, France, Germany, Russia and China – in Almaty on April 5.

Iran’s agreement to follow-up meetings will be seen by diplomats and experts as the minimum benchmark for success at this week’s meeting. Many western diplomats believe there needs to be significant progress in the stand-off between Iran and world powers this year if a military confrontation is to be avoided in 2014.

Saeed Jaleeli, Iran’s chief nuclear negotiator, said the talks had been “a positive step”. He also said that a new offer put to Iran by world powers – who go by the name P5 plus 1 – was “more realistic” than previous plans.

“Certain positions of the P5+1 group were more positive compared to those expressed in the past,” he said.

However, experts will be quick to note that previous meetings between Iran and world powers have ended in pledges to make progress in follow-on talks, only for such hopes to be frustrated at a later date.

The Almaty talks have also taken place amid signs that Iran is pressing ahead with technical improvements to its nuclear programme that are worrying western governments.

These technical improvements – which include the installation of a significant number of new centrifuge machines at its enrichment site at Natanz – may improve its chances of completing a bomb at speed if that is what it later decides to do.

“After several weeks of disturbing news about Iran’s nuclear programme, the talks with the world’s powers are pointed in the right direction for the first time in many months,” said Mark Fitzpatrick, of the International Institute for Strategic Studies. “But there really does have to be progress on those talks this year, otherwise facts on the ground will point towards military options.”

At this week’s talks, world powers presented Iran with a revised offer which was more favourable to Tehran than one put to it last year, when the six world powers asked the Islamic Republic to take three immediate steps to build international confidence that it was not seeking to build a bomb.

These were: to stop production of more highly enriched uranium at the 20 per cent concentration; ship its current stockpile of 20 per cent uranium out of the country so it could not be converted to weapons-grade fuel; and shut its heavily protected second uranium enrichment plant at Fordow.

In Almaty this week the package was modified, said diplomats. Iran is no longer required to shut Fordow fully but to “reduce the readiness” of the enrichment plant. It is also no longer required to ship out its entire existing stock of 20 per cent uranium but retain what it needs for a research reactor.

In return for these measures, the six world powers are now saying for the first time that they will reverse sanctions on the trade in gold and petrochemical products that have been imposed on Iran.

They are also pledging not to have any additional sanctions on the nuclear industry. However, the bulk of sanctions, which affect the energy and banking sectors, would not be touched by this package.

The impact of sanctions on Iran was further demonstrated on Wednesday when the government of Mahmoud Ahmadi-Nejad presented the budget to parliament for next financial year, which starts on March 21.

Oil revenues are projected to be 40 per cent lower than the current year’s budget, in what is Iran’s first official calculation of the impact of EU oil sanctions since last summer on the country’s main source of hard currency income.

It was not yet clear how the government was going to compensate for the decline in income. Despite the dwindling petrodollars, the 7,300tn rial ($297.6bn) budget is up 22 per cent on this year’s budget, as the government forecast that the country could increase its income from other sources, including tax.

The government also predicted that the rest of its oil could be sold at $95 per barrel, but the parity rate of the rial against US dollar remained vague. Domestic media speculated that the dollar rate in the budget was far higher than the official rate (12,260) and probably more than 20,000 rials.

Iran’s parliament is due to approve the budget by mid-March.

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