An Iranian conundrum

Yet the European response to Mr Obama over Iran has been mixed. Senior diplomats from the 27 EU members discussed Iran in Prague in January. France a hawk proposed adding two Iranian banks to the sanctions list. If the EU wanted to remain 8220;relevant8221; for the Americans,the French representative told his colleagues,it had to be ready to carry a 8220;bigger stick8221;. Then came the objections. Some fretted about hurting ordinary Iranians; others preferred to wait for a request from Mr Obama; others still wanted sanctions agreed by the UN Security Council,to ensure that Russia and China were on board. They have a point: a drop in EU trade with Iran since 2005 has been offset,almost euro for euro,by rising Chinese sales to Iran,undermining the sanctions.

Even so,existing sanctions are having an impact on Iran8217;s economy 8220;at rather important margins8221;,insists a diplomat. With oil prices still low,Iran8217;s economy is in deep trouble. Nor are all objections to sanctions disinterested. Under pressure from governments,French,British and Spanish energy firms have frozen investments in Iran. Others have been less fussy. OMV,Austria8217;s big energy group,has invested heavily in Iranian onshore oil,and also has a draft agreement to explore for natural gas. German businesses are leading exporters to Iran: November8217;s figures showed that German exports to Iran had actually grown by some 10 over the previous year.

And yet when it comes to Iran,most EU members do not matter much. Only a few countries have the intelligence and diplomatic resources to focus on the threat from Iran. Talk to them alone,and the prospects for co-operation between Europe and America look brighter. Gruff policy types in America may grumble that Europeans appear more worried about a pre-emptive Israeli strike on Iran than by the prospect of an Iranian bomb. But in fact either prospect fills Europeans with horror-and that is enough. To quote the French president,Nicolas Sarkozy,serious diplomacy is the only means of avoiding a 8220;catastrophic8221; choice: 8220;an Iranian bomb or the bombing of Iran8221;.

The EU3 of Britain,France and Germany are realistic about the talks they,along with the EU8217;s foreign-policy chief,Javier Solana,have held with Iran. Europe has a 8220;very good policy8221; for curbing Iran8217;s nuclear ambitions,says a diplomat,dryly; the problem being that it has not worked yet. The Europeans also accept that any final deal will be struck by America and Iran. They stepped in only because America was not available. Russia goes along with today8217;s sanctions out of 8220;despair8221;-objecting to the policy,but having nothing else to offer. China is torn between its need for energy security and its dislike of nuclear proliferation.

All sides see this year as decisive. Iran is expected to pass a threshold in the second half of 2009,amassing enough low-enriched uranium to get close to a bomb,though it would still need to enrich it to higher levels to fuel a nuclear device. Once that threshold is crossed,diplomacy becomes harder though a sprint for a bomb would be risky,as it would be visible and the enrichment process would take several weeks. And from now on American engagement will be crucial,too.

Last tango in Tehran

A senior diplomat says that Iranian envoys have spent the past few years 8220;playing for time8221;. EU negotiators spent hours answering tangential questions,and listening to declarations about the greatness of the Persian people-8220;going back to Cyrus the Great8221;,he sighs-leading up to its right to civilian nuclear technology. Some argue that Iran8217;s supreme leader,Ali Khamenei,has never really been willing to negotiate in earnest. A top Khamenei aide,Ali Akbar Velayati,met Mr Sarkozy secretly in November 2007,but the initiative fizzled.

France and Britain take Iran very seriously; and after an ambiguous few years,Germany is now almost as tough. Angela Merkel,the German chancellor,has faced down the economics ministry and some in the foreign ministry to curb export-credit guarantees for firms trading with Iran. Under Silvio Berlusconi,Italy backs tough sanctions,despite its energy ambitions in Iran.

European,Russian and Chinese diplomats handling the Iran dossier will meet William Burns,their American colleague,in Germany next week to discuss strategy. The Europeans will urge the Americans to engage,but prudently. Some feel that America should not talk to Iran before the Iranian presidential election,for fear of handing a propaganda coup to Mahmoud Ahmadinejad,who is running for re-election. Others disagree,urging immediate talks. All say that American engagement is a trump card,to be played with 8220;circumspection8221;.

At the least,if an extended American hand is brushed aside,some 8220;pretty chunky8221; UN sanctions will be needed. And,if American diplomacy fails completely,only bad options will be left. Europe8217;s biggest powers are willing to do much to avoid that outcome,and they are the ones that count. On Iran,the transatlantic powers see pretty much eye to eye.

The Economist Newspaper Limited 2008