A German 'Iran Bank' Could Save Nuclear Deal
BERLIN (handelsblatt.com) - Creating a private German Iran Bank would keep investment flowing into Iran, so that Tehran sticks to its side of the nuclear deal. The bank could even be named Deutsche.
Since U.S. President Donald Trump pulled out of the nuclear agreement with Iran, formally known as the JCPOA, the EU has been looking for ideas to prevent the worst: the exit of Iran from its obligations under the deal, including a nuclear "breakout.” The best way to prevent that is to keep private investment flowing from Europe to Iran. To finance such business, I am proposing a novel idea: Germany should start a bank, or convert an existing German bank, into an "Iran bank.”
The European Commission could force European businesses to ignore U.S. secondary sanctions under the Blocking Statute of 1996, which it updated on June 6th. The statute has never been used and if the EU enforces it, now it risks being sued for damages by affected European businesses.
Another option for maintaining economic ties with Iran is to finance important Iranian infrastructure projects through the European Investment Bank. But Tehran has already made it clear that it will not be content with the "crumbs” of publicly financed projects.
The best option is to encourage major private-sector investment in Iran. This would, admittedly, be the most unusual path for the German government. Berlin could promote the establishment or conversion of a private bank designed to supply capital to corporations that remain interested in doing business with Iran.
This institution should have experience in corporate finance. It should also be independent of the U.S. financial sector and have no investment arm of its own in the America. One potential candidate would be the troubled Deutsche Bank, which has already largely wound down its investment banking activities in the United States.
If the German government were forced to use tax revenues to rescue Deutsche, which is Germany’s largest bank, it would gain a say in running it. For Deutsche Bank this would be an opportunity to expand back into a market it had been forced to abandon due to earlier U.S. sanctions.
A German Iran bank and the investment it enables would also keep the oil and gas flowing from Iran. At a time when Europe is trying to diversify its energy imports, that is a strategic advantage. The EU might be able to keep Iranian oil and gas out of the control of either Russia or China.
The bank I propose would also send a strong message within the EU that its member states are serious about becoming "a Europe that protects,” as French President Emmanuel Macron and Commission President Jean-Claude Junker have promised. To fulfill this vision, the EU must be willing to tread unconventional paths to protect its businesses, and ultimately its citizens.
Since U.S. President Donald Trump pulled out of the nuclear agreement with Iran, formally known as the JCPOA, the EU has been looking for ideas to prevent the worst: the exit of Iran from its obligations under the deal, including a nuclear "breakout.” The best way to prevent that is to keep private investment flowing from Europe to Iran. To finance such business, I am proposing a novel idea: Germany should start a bank, or convert an existing German bank, into an "Iran bank.”
The European Commission could force European businesses to ignore U.S. secondary sanctions under the Blocking Statute of 1996, which it updated on June 6th. The statute has never been used and if the EU enforces it, now it risks being sued for damages by affected European businesses.
Another option for maintaining economic ties with Iran is to finance important Iranian infrastructure projects through the European Investment Bank. But Tehran has already made it clear that it will not be content with the "crumbs” of publicly financed projects.
The best option is to encourage major private-sector investment in Iran. This would, admittedly, be the most unusual path for the German government. Berlin could promote the establishment or conversion of a private bank designed to supply capital to corporations that remain interested in doing business with Iran.
This institution should have experience in corporate finance. It should also be independent of the U.S. financial sector and have no investment arm of its own in the America. One potential candidate would be the troubled Deutsche Bank, which has already largely wound down its investment banking activities in the United States.
If the German government were forced to use tax revenues to rescue Deutsche, which is Germany’s largest bank, it would gain a say in running it. For Deutsche Bank this would be an opportunity to expand back into a market it had been forced to abandon due to earlier U.S. sanctions.
A German Iran bank and the investment it enables would also keep the oil and gas flowing from Iran. At a time when Europe is trying to diversify its energy imports, that is a strategic advantage. The EU might be able to keep Iranian oil and gas out of the control of either Russia or China.
The bank I propose would also send a strong message within the EU that its member states are serious about becoming "a Europe that protects,” as French President Emmanuel Macron and Commission President Jean-Claude Junker have promised. To fulfill this vision, the EU must be willing to tread unconventional paths to protect its businesses, and ultimately its citizens.