January 20, 2012 7:34 pm

Greece presses EU to ease Iran oil sanctions

  • Share
  • Print
  • Clip
  • Gift Article
  • Comments

Greece is pressing its European Union partners to make last-minute concessions over a forthcoming EU embargo on Iranian oil, complicating the bloc’s efforts to unveil a sweeping package of sanctions against Tehran on Monday.

European diplomats are confident that EU foreign ministers will agree plans on Monday to impose a phased ban on the import of crude oil from Iran over the next few months.

But Greek brinkmanship has added an element of suspense to Monday’s meeting, which is aimed at imposing the most serious sanctions the EU has ever agreed in protest at Iran’s nuclear programme.

The imposition of a ban on Iranian oil will be painful for a range of southern European countries, such as Italy and Spain, which are heavily dependent on imports from Iran.

However, Greece argues it is in a particularly vulnerable position. Iran supplies crude to Greece on highly favourable terms that would be difficult to match elsewhere. Greek refiners do not have to make payment until 60 days after receiving shipments, according to EU officials.

Adding to the complication is the dire condition of the Greek economy and the country’s place at the epicentre of the continent’s debt crisis.

Diplomats say that Greece is still holding out for the EU ban to be gradually phased in over eight months, about three months longer than the timescale which most of the rest of the EU desire. Greece wants the extra time to find alternative sources of supply.

Greece is also negotiating over the terms of a review of the ban which all EU countries accept must be undertaken after two or three months.

EU members accept a review is needed to check the EU ban does not create a rise in the world oil price or further undermine the European economy. Greece is demanding that the terms of the review should be as wide-ranging as possible, say diplomats.

“It is inconceivable that Greece would scupper the ban altogether,” said a diplomat from one EU state. “What we’re seeing here is classic EU brinkmanship but we need to make sure the outcome does not water down the EU ban so far that Iran emerges unscathed.”

A senior EU official acknowledged that talks over the oil embargo were increasingly becoming mixed up with Athens’ broader dealings with the bloc over the euro crisis, and the reform package it has agreed in exchange for a €130bn bail-out.

“This is adding an additional complication to what is already a complicated negotiation,” the senior official said.

It emerged on Friday that the EU is planning a wide range of measures in addition to the oil embargo. It will for the first time impose a partial asset freeze on the Central Bank of Iran.

The EU also plans to ban the transfer from Iran to Europe of gold and precious metals. This ban on the export of precious commodities is aimed at stopping the Iranian regime selling these assets for foreign currency.

Gold traders believe that Tehran repatriated most of its official gold reserves from Switzerland a few years ago and could use the commodity, which is trading near record highs, in a desperate attempt to raise foreign currency.

French President Nicolas Sarkozy on Friday accused Iran of lying and denounced what he called its “senseless race for a nuclear bomb.” He called for “much stronger, much more decisive” sanctions, adding that “time is running out” and “everything must be done to avoid” international military intervention.

Western diplomats believe that the imposition of sanctions next week is one of the last chances to avert a wider crisis in which Iran either gets a nuclear weapon or is bombed by Israel or the US. One EU diplomat said: “We are now in the game of putting as much pressure as we can on Iran to avert something worse.”

Some member states have expressed concerns that such restrictions might block legitimate trade. But one diplomat involved in the discussions interpreted the plan in broad terms, arguing that any transactions that brought wealth to the regime to support its nuclear programme were fair game.

Copyright The Financial Times Limited 2015. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.

  • Share
  • Print
  • Clip
  • Gift Article
  • Comments


Sign up for email briefings to stay up to date on topics you are interested in

Enter job search