Five hours ago Reuters reported the EU Will Start Iran Sanctions Blocking Law Process on Friday.
"As the European Commission we have the duty to protect European companies. We now need to act and this is why we are launching the process of to activate the 'blocking statute' from 1996. We will do that tomorrow morning at 1030," European Commission President Jean-Claude Juncker said.
"We also decided to allow the European Investment Bank to facilitate European companies' investment in Iran. The Commission itself will maintain its cooperation will Iran," Juncker told a news conference after a meeting of EU leaders.
Solidarity Busted Already
Two hours ago the Nasdaq reported Macron Rules Out Trade War Over Iran Deal as Firms Head for Exit.
French President Emmanuel Macron ruled out on Thursday any trade war with the United States over its withdrawal from the Iranian nuclear deal as a wave of European companies quit business with Tehran, fearing the global reach of U.S. sanctions.
Macron acknowledged the predicament of firms wanting to trade with Iran or invest there, especially multinationals with close business ties to the United States. But he made clear bigger matters were at stake.
"We won't start a strategic trade war against the U.S. about Iran," he said on arriving for a second day of a European Union summit in Bulgaria. "We're not going to take counter-sanctions against U.S. companies, it wouldn't make sense."
"All European Union member states are still backing this agreement, despite the fact the United States has decided not to, and we will continue talks with the United States," German Chancellor Angela Merkel told reporters at the EU summit.
Actions Speak Louder Than Bluffs
The EU can claim it is still honoring the deal, but ultimately the decision is up to corporate CEOs. And we have seen the response.
- Soren Skou, chief executive of Danish-based A.P. Moller-Maersk, made this statement: "With the sanctions the Americans are to impose, you can't do business in Iran if you also have business in the U.S., and we have that on a large scale. I don't know the exact timing details, but I am certain that we're also going to shut down."
- Italian steel manufacturer Danieli announced it has halted work on finding financial coverage for orders it won in Iran worth 1.5 billion euros ($1.8 billion). "With the withdrawal of the U.S. from the treaty the banks are no longer ready to fund Iranian projects for fear of secondary sanctions," Danieli CEO Alessandro Trivillin said.
EU's Pathetically Weak Response to Donald Trump
Eurointelligence mocked the Juncker's response last night, even before Juncker made it.
It is really quite sad to see the lack of gumption by EU leaders when confronted with Donald Trump's threats.
The fundamental tenet of German policy will be to protect the interests of industry in general, and of the car industry specifically. That clearly sets limits to the EU's ability to stand up to Donald Trump, and risks a major trade conflict.
Yesterday's EU summit in Sofia agreed a broad strategy of the neither-here-nor-there kind to deal with Trump. The leaders managed to agree that they will not enter into a trade talks if the US applies tariffs to steel and aluminium from June 1, when the current and final exemption expires.
The leaders also agreed the implausible strategy to prepare protection for European companies against secondary US sanctions to be slapped on EU companies dealing with Iran. But they gave no details on how this can be done. As FAZ recently pointed out, the only companies willing and able to resist US pressure will be European importers of Persian carpets.
Jean-Claude Juncker even mentioned the possibility of invoking the blocking statute. This is the ultimate bluff. The statute would allow the EU to impose sanctions on European companies that comply with US sanctions. In other words, it would give EU companies a choice between pest and cholera. Needless to say, this has not been agreed. Nor will it be. It is a sign of the helplessness and panic of EU leaders that they even talk about it.
Windbags Juncker, Merkel, Macron
Merkel's role in Europe is now essentially the same as Juncker's. Both are nothing but pathetic windbags with dwindling power.
Macron wants to be the European savior but he is just another windbag who bows down to Trump internationally while accomplishing nothing domestically.
Nonetheless, this story is not over yet. The EU will at some point be forced to respond and the results won't be pretty.
Mike "Mish" Shedlock