Iranian President Hassan Rouhani has sent a list of demands to France, Germany and Britain as its price for staying in the nuclear accord, while vowing not to give in to growing U.S. pressure to curb its oil sales. Iran has said if it cannot reap any economic benefits from remaining in the deal, which traded sanctions relief for curbing the Iranian nuclear program, then it would have little incentive to comply with its terms and would significantly ramp up uranium enrichment.
The EU has pledged to defend the agreement, protect European companies hurt by the U.S. decision and offer alternative financing for Iranian investments. However, finding practical ways around U.S. sanctions has proved difficult.
Again, in a speech to senior officials broadcast live by state television, Rouhani prepared the Iranian people for difficult times ahead, while affirming they could cope with such problems. He said: “We will not surrender before America, we will protect our historic dignity. We have to show the world that we will tolerate tough times, we will tolerate difficulties, but we will not trade in our independence, our freedom or our faith.”
In comments largely addressing his domestic critics, Rouhani promised his government would cut spending, reduce international travel and fly economy class to ease the burden on the public. He also said his government would import raw materials at affordable prices to help domestic manufacturers and ensure supply for Iranians. Additionally, he urged ministries to issue government bonds to give people alternatives to the dollar and the euro for investing their assets.
One of the few tangible financial gains Iran has seen from the nuclear deal has been an increase in its oil exports. A dramatic reduction could hurt economic growth and deepen a foreign currency shortage that has seen the Rial plunge against the dollar.
There are indications that the Iranian people are already facing difficulties: the central bank of Iran reported on 26 June that consumer prices in June grew at their fastest in three years, to 13.7 percent from a year earlier. Last week, Iran banned import of 1,400 non-essential and luxury goods to reduce the amount of foreign currency leaving the country.
The Trump administration began dismantling the sanctions relief that was granted to Iran under the 2015 nuclear deal. The Treasury Department announced it had revoked licenses that allowed U.S.-controlled foreign firms to export commercial aircraft parts to Iran as well as permitted Americans to trade in Iranian carpets, pistachios and caviar. It said businesses engaged in any such transactions would have to wind down those operations by 6 August or face penalties under U.S. sanctions. Another set of licenses covering other types of commerce, including oil purchases, will be revoked in coming weeks, with firms given until 4 November to end those activities.