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EU risk ‘DESTROYING’ trade with the US as sanctions on Iran edge closer

November 2, 2018 4:42 PM
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EU risk ‘DESTROYING’ trade with the US as sanctions on Iran edge closer

LEADING economists have warned the European Union faces “destroying” business with the United States if they continue to trade with Iran despite Washington’s impending sanctions.

The SPV is hardly promising. European companies know that if they trade with Iran, potential business in the US will be destroyed, because they will be sanctioned there.

The European Commission wants to create a Special Purpose Vehicle to take care of Iranian import and export payments, as soon as the US imposes sanctions on the central bank and oil industry of Iran on Monday November 5.

High ranking EU diplomats told the Financial Times, that numerous EU states do not want to take part, because they fear the reaction of the US government. "No EU-government wants to anger the USA with an SPV", says one of the EU diplomats.

The head of the capital market analysis department of Baader Bank Robert Halver told Deutsche Wirtschaftsnachrichten: "The SPV is hardly promising. European companies know that if they trade with Iran, potential business in the US will be destroyed, because they will be sanctioned there.

“In principle the US market also offers significantly more potential in the long term, than Iran. In direct comparison most European companies will therefore always opt for America.”

Mr Halver also stressed the further consequences trading with Iran will have on relationships with Saudi Arabia.

He added: “The compensation payments of the EU are no alternative. Also, you must not forget that the respective company also endangers business potential with Saudi-Arabia. Saudi-Arabia is a competitor of Iran, after all. Especially because of lucrative mega-investments, which Saudi-Arabia is planning to escape dependence on oil, the decision will always be for Saudi-Arabia.

“EU policy and company policy are two very different animals. While Europe wants to stand up to America, companies will always opt for income return.”

A spokeswoman for the European Commission speaking about the report in September after a meeting with officials from the UK, France, Germany, China and Russia, said they were working to creating a “legal entity” to continue trade between EU companies and Iran.

Also read: British MEP warns of eurosceptic UPRISING as he ridicules 'AGGRESSIVE' EU superstate

Source: express.co.uk

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