European governments are resisting Bush administration’s demands that they curtail support for exports to Iran freeze assets of some Iranian companies, officials on both sides say. The resistance threatens to open a new rift between Europe and the US over Iran.The main targets are Italy, Germany, France, Spain, Austria, the Netherlands, Sweden and Britain, all with extensive business dealings with Iran, particularly in energy. Administration officials say a new American drive to reduce exports to Iran and cut off its transactions is intended to further isolate Iran commercially amid the first signs that global pressure has hurt Iran’s economy. In December, Iran’s refusal to give up its nuclear programme led the UN Security Council to impose economic sanctions. Europeans are resisting American appeals for quick action, citing technical and political problems related to the heavy economic ties to Iran and its oil industry.“We are telling Europeans that they need to go way beyond what they’ve done to maximise pressure on Iran,” said a senior administration official. “The European response on the economic side has been pretty weak.” One irony of the pressure, European and American officials say, is that many European banks have begun to cut back their transactions with Iran on their own, partly because of a Treasury Department ban on using dollars in deals involving two leading Iranian banks.But American pressure on European governments has been less successful, administration and European officials say. However, administration officials say that Chancellor Angela Merkel of Germany, the current head of the EU, has been responsive.Europe has more commercial and economic ties with Iran than does the US, which severed relations with Iran after the revolution and seizure of hostages in 1979.The administration says European governments provided $18 billion in government loan guarantees for Iran in 2005. The numbers have gone down in the last year, but not by much, said officials.American officials claim European governments may have facilitated illicit business and that they must do more to stop such transactions. Treasury Secretary Henry M Paulson Jr has said the US has shared the names of at least 30 front companies involved in terrorism or weapons programs with Europeans.European officials argue that beyond the political interests in Europe are legal problems, because European governments lack the tools used by the Treasury Department under various American statutes to freeze assets or block transactions based on secret intelligence information.
