Iran seals nuclear deal with west in return for sanctions relief
Barack Obama hails historic accord as first step towards resolution of decade-old impasse over Iran’s nuclear programme. Read more…
John Kerry statement on Syria polarises world leaders
Iran and Russia stand alongside Bashar al-Assad’s regime while the UK, France and Australia follow Washington’s lead. Read more…
Foreign affairs chief Omer Celik states June meeting is only chance for nations to salvage credibility after 80,000 deaths
If the planned Geneva peace talks on Syria fail, it will mark the end of the road for attempts to find a negotiated solution to the conflict, and should open the door to the wholesale delivery of arms to the rebels, a Turkish minister has said.
Omer Celik, the foreign affairs chief in Turkey’s ruling AKP party, portrayed the Geneva meeting planned for mid-June as a last chance for the international community to salvage its credibility in the face of two years of slaughter in which more than 80,000 people have died.
Serious obstacles remain to the talks being held at all, however, including divisions in the international community over whether Iran should take part, and disarray among Syrian opposition groups.
On Wednesday evening the Syrian government confirmed for the first time that it would attend the peace talks. It has not decided on the make-up of its delegation. Russia has previously said it can guarantee a high-level presence from Damascus.
A senior UN official involved in preparing the talks told the Guardian that the biggest problem was getting the right people from both sides of the conflict to attend. “We need credible negotiating partners. This is the most important issue. This is not yet solved. The first condition concerns the quality of the talks,” he said.
Russian officials have also warned that the lifting of the EU arms embargo, due to take effect on Saturday, undermined prospects for the talks. In a further sign of mounting friction in the runup to the Geneva meeting Sergei Lavrov, the foreign minister, also took aim yesterday at a US-backed resolution at the UN human rights council condemning the Syrian government. Lavrov described the resolution as odious and unwholesome.
Russia, the Assad regime’s longstanding protector has continued to supply it with heavy weaponry throughout the conflict and responded to the EU arms embargo announcement by confirming its intention to deliver sophisticated air-defence missiles to Damascus.
Celik, who is Turkey’s culture minister as well as being one of Prime Minister Recep Tayyip Erdogan’s closest foreign policy advisers, said the Assad regime had been arming itself and receiving direct military support from Iran and the Lebanese Shia militia Hezbollah.
“If the Geneva meeting becomes just another means of gaining Assad some additional time, that will mean that all diplomatic initiatives will have been exhausted,” he told the Guardian.
“If the Geneva meeting does fail, we believe the international community should take all necessary measures to support the protection of opposition forces,” Celik said. Asked if that meant arming the opposition, he replied: “Of course.”
Otherwise, he added: “Concepts of international community and international justice would be meaningless and the international community would just be standing by watching a dictator butcher his own people.” He rejected objections that sending weapons to the rebel Free Syrian Army would add “fuel to the fire” in Syria and simply lead to escalation.
“We went through all the same arguments over Bosnia and in the time we went through those arguments 100,000 people died. Now we are doing it again, and 100,000 people have died in Syria,” Celik said. Turkish officials draw close parallels between the Bosnian conflict in the 1990s and Syria. They see both as cases of the international community standing by in the face of the mass killing of Muslims, and argue that in both cases indifference has led to radicalisation.
The biggest hurdle to cross before the Geneva talks can convene is the international row over the participation of Iran, which is an active party to the conflict, sending Revolutionary Guards to train pro-government militias. It also backs Hezbollah, which has taken a key role on the government side of the war.
Russia is adamant that an Iranian delegation should be present.”The issue of Iran is key for us,” Lavrov was quoted as saying by Russian news agencies. “Iran without question is one of the most important nations.” Tehran has voiced readiness to attend and Turkey has backed the proposal.”This can be overcome by negotiation because it is a must to have all the parties in that meeting if you want to it succeed,” Celik said.
UN headquarters in New York is keen to see Tehran involved in the talks. “Iran should be there, but the resistance is very strong,” said a senior UN official. “If we can’t get Iran to the talks, we will need a parallel channel.”
Saudi Arabia and France have led opposition to an Iranian presence. Riyadh has said it will boycott Geneva if Tehran takes part, while the French foreign minister, Laurent Fabius, said that to include Iran would be “extremely dangerous” as it would harm prospects of reaching a deal on its disputed nuclear programme.
“We fear that if they are part of the Syrian conference they will try to drag things on to such an extent that they will blackmail us saying that the Syrian crisis can only be resolved on condition that they have the nuclear bomb,” Fabius told France Inter radio. Tehran denies having any aspirations to build a nuclear weapons.
A spokesman for the UK foreign office said discussions on participants at Geneva were still being negotiated but pointed to remarks by William Hague in parliament last week, in which the foreign secretary argued that Iran would have blocked any agreement at the first Geneva talks and that the UK’s “starting assumption” is that the same countries which attended the first negotiations should come to the second. The US state department has said the issue is still being negotiated.
Deep divisions within the political opposition represent a stiff challenge to the Geneva conference organisers. A meeting of the National Coalition in Istanbul, which began on 23 May and was meant to last three days, is still deadlocked a week later on the first major item on its agenda, the admission of new members. That has to be resolved before new leaders are elected and a decision is taken on whether to go to the Swiss talks.
The military opposition is even more fragmented, with the UN special envoy, Lakhdar Brahimi, estimating that there as many as 1,400 different groups, battalions and brigades fighting government forces. Each currently has to negotiate for ammunition with an array of mostly Arab state and private backers.
However, a Syrian businessman involved in supplying rebel-held areas since the start of the uprising two years ago said the structure for distributing arms and ammunition is gradually being rationalised, with groups applying to a joint military commission for supplies for specific operations, and being judged by their effectiveness.
“It is getting to be a more rational streamlined setup,” the businessman said. “You don’t just turn up any more and say I have this many men, give me this many bullets.”
As a practising member of the criminal bar, I am horrified at the proposed changes to the provision of legal aid, currently undergoing a so called “consultation period” by the Ministry of Justice (Editorial, 22 May), albeit the justice minister refuses to meet the chairman of the Criminal Bar Association. It is clear that the truncated consultation period is no more than window dressing. Chris Grayling is disinterested in any contribution from the profession. It is beyond doubt that the tendering out of legal aid to private business will herald a decline in standards in a legal system that has been a model of justice for centuries. There is no provision whatsoever in the proposals to ensure standards are maintained when individuals are unable to choose their representation. Once in possession of a contract, a company’s clients will be guaranteed, irrespective of the quality of service. The idea that this service would be properly provided by employees of a profit-driven company, whose lowest bid has rewarded them with the responsibility for the representation of citizens accused of crime by the state, is dubious. The prospect that the same company could be responsible for housing prisoners, transporting them, and representing them is, frankly, Orwellian.
East Langton, Leicestershire
• You report dissidents in Iran “have been denied adequate legal representation” (22 May). In the UK we are a long way from Iran’s repressive regime, but the present government’s proposals on reforming legal aid to allow Eddie Stobart and the like to turn a profit by supplying third-rate representation to people who are (to use Grayling’s analysis) “too thick to know better”, will have us catching up with the regime in Tehran in no time. Whatever one’s view of defence lawyers, the importance of ensuring that only those proved to the satisfaction of their peers are found guilty, is a matter of social, democratic and constitutional importance to us all.
Legal aid barrister, London
President insists wealthy must pay their share and says he will not extend Bush-era tax cuts for wealthiest 2% of Americans
Barack Obama adopted a tougher approach to the fiscal cliff showdown on Wednesday when he made an unequivocal pledge that he will not cave in to Republican demands for tax cuts for the wealthy.
Apparently emboldened by his election victory and free from the pressure of another campaign, Obama told a White House press conference that while almost everything else was up for discussion, the wealthiest Americans would have to pay their share.
During last year’s showdown with Republican leaders in Congress that almost brought Washington to a standstill, Obama was forced to accept a compromise just days before Christmas that included extending tax cuts for the richest Americans, introduced by George W Bush.
Asked at the press conference if he could offer an assurance that he would not cave in again, Obama said: “What I said at the time is what I meant. Which is: this was a one-time proposition. What I have told leaders privately as well as publicly is that we can not afford to extend the Bush tax cuts for the wealthy.”
The press conference was his first formal, televised appearance before the White House press corps in eight months. He used it to take a swipe at two senior Republican senators, John McCain and Lindsey Graham, who criticised the UN ambassador, Susan Rice, over comments she made about the September 11 attack on the US consulate in Benghazi.
He also addressed the scandal over General David Petraeus for the first time in detail, said that tackling climate change would be a priority in his second term, and promised to press ahead with immigration reform.
One of the biggest criticisms of Obama in his first term from fellow Democrats is that he was too passive in dealing with Republicans and failed to show sufficient leadership.
Speaking in the East Room of the White House, Obama was more confident in dealing with the media than some of his laboured performances in the past. He indicated that he understood the criticisms of his first term: “I hope and intend to be a better president in the second term than I was in the first,” he said.
Democrats in Congress as well as many activists and supporters regard the tax issue as a touchstone. Many of them were dismayed that Obama appeared to be too passive, and at times too willing to bend, in his dealings with Republicans in Congress over the last two years. But given the unequivocal nature of his comments on Wednesday, Obama will find it hard to row back from his promises on tax.
The Republican leader in the House, John Boehner, and other senior members of the party have adopted a more conciliatory tone since the election. But they have gone on to say that they remain opposed to any tax rises for the wealthy.
At the press conference, Obama reiterated that there were only two options facing the nation on January 1: either everyone’s taxes go up, or just those of the top-earning 2% of Americans.
Although he repeated he was seeking compromise with the Republicans, Obama combined with this with a new-found air of determination not to bend on the 2%. He is putting the pressure on the Republicans in a way he failed to so last year, suggesting that if everyone faces tax rises on 1 January, it will be the GOP’s fault.
Obama is seeking a quick bill before Christmas to guarantee that taxes will not go up for the the other 98%. “What we can do is make sure that middle-class taxes don’t go up. And so the most important important step we can take right now – and I think the foundation for a deal that helps the economy, creates jobs – is if right away that 98% of Americans are not going to see their taxes go up, 97% of small businesses are not going to see their taxes go up.
“If we get that in place, we are actually removing half the fiscal cliff. Half of the danger to our economy is removed by that single step.”
The showdown has potential ramifications beyond just the next few months.
If Obama can win this confrontation, it might make it easier to get other legislation through over the next two years until the mid-term congressional elections. If he does not, Republicans, who retain control of the House, will feel more confident of being able to fend off other legislative initiatives.
Obama said that as long as the tax cuts for the top 2% were dealt with, he was open to discussion of the whole tax system, particularly loopholes, and – a contentious point for some Democrats – consider serious reform of entitlements, in particular health costs.
“There is a package to be shaped, and I am confident that folks of goodwill in both parties can make it happen. But what I am not going to do is extend Bush tax cuts for the wealthiest 2% that we can’t afford and, according to economists, have the least impact on our economy.”
He added: “I want a big deal, a comprehensive deal.”
Reflecting his new-found confidence, Obama rounded on McCain and Graham for a press conference at Congress earlier in the day in which they said they would block any attempt by the president to nominate Rice as secretary of state in place of Hillary Clinton, because of what they claim is a misleading account she gave of the Benghazi attack.
Obama accused them of “besmirching” her with their “outrageous” comments. He told the press conference he would nominate whoever he wanted as secretary of state.
On immigration, which most Republicans have long opposed but which they might now be willing to consider given the importance of Latinos in the election, Obama promised reform “very soon” after his inauguration on January 21.
“I am very confident we can get immigration reform done,” he said. He wanted to “seize the moment”, adding that he was “already seeing signs” that some Republicans are beginning to come round.
He favoured strong border controls and a pathway to legal status for those already living in the US, provided they paid taxes and were not engaged in criminal activity.
One of the biggest foreign policy challenges in his second term is Iran, and Obama said there is still a window for a diplomatic solution, insisting he will push for dialogue between Iran and the US and other countries. He denied a pre-election report that the US would engage in direct, one-to-one talks with Iran.
On Syria, he said the US is not yet ready to recognise the coalition of rebels that has just been formed as an alternative government. He would not go beyond describing them as representing the “legitimate” aspirations of the Syrian people. His concern was that extremists elements might infiltrate the coalition and he did not want to supply arms that might then be used against Americans.
Obama hinted again at a possible role for his Republican challenger, Mitt Romney, praising his handling of the 2002 Winter Olympics in Salt Lake City and acknowledging that he had good ideas on the campaign trail. But he added: “I am not suggesting I have a specific assignment.”
As an oil industry whistleblower, I know the energy sector is even more flawed than this week’s exposé of gas prices reveals
The Guardian’s investigation into the alleged “Libor-like” fixing of UK gas prices was doubly ironic for me. The first irony is that, as director of compliance and market supervision of the International Petroleum Exchange (now ICE Futures Europe) in the 1990s, I was heavily involved in the development and legal architecture of the gas-market contract that has now allegedly been manipulated.
The second painful irony is that in 2000 the Guardian published detailed allegations made by me on very similar micro-manipulation of the International Petroleum Exchange’s Brent futures contract-settlement prices. This systemic manipulation was so pervasive that traders referred to the on-exchange profits they made at the expense of the manipulators – who profited “off-exchange” – as “grab a grand”.
Unfortunately, I described the manipulation as “systematic” – taken to mean that some of the players were routinely manipulating the price most of the time – rather than “systemic”, where most of the players manipulate the market some of the time. On this basis the commissioner appointed to investigate my allegations rejected them, and in finest whistleblower tradition my reputation was destroyed: I lost my livelihood, home and marriage. Had the crude oil market been properly investigated at that time, subsequent oil market history would probably have been very different.
One thing I have come to realise since my failed attempt at whistleblowing is that the short-term trading exposed this week is only part of the problem. The malaise runs much deeper. If you want to find out who really has an interest in rigging the market, ask who benefits from medium- and long-term high commodity prices: it’s the producers, stupid. From De Beers’ diamond hoarding to coffee-grower cartels, if the history of commodity markets tells us anything it’s that if producers can find leverage to support commodity prices, they will.
The real problem in the energy market lies not with gas, but crude oil – which is suffering perhaps the greatest market manipulation the world has seen. This is due to financialisation of markets which began in crude oil about 12 years ago, but only became significant from around 2005 onwards. From the mid-90s, a new type of investor entered the markets as investment banks created new vehicles – index funds, exchange traded funds and so on – which enabled investors to invest directly in equities, precious metals; commodities generally and above all, in energy, with a view to “hedging inflation”. Rather than speculatively taking a risk in search of a profit, they sought only the return of their capital, and the preservation of the value of their investment relative to dollars, sterling and so on.
To understand what happened to oil, we just need to look at the Enron scandal. The fundamental scam perpetrated here was based on an ancient financing method known as “prepay”. Quite simply, this occurs when producers sell their product at a discount for cash now, with delivery later. So via intermediary banks such as JP Morgan and Citigroup, Enron were able to opaquely obtain “off-balance sheet” financing disguised as commodity trades of which Enron’s investors and creditors were blithely unaware.Essentially, Enron was borrowing dollars and lending commodities.
A similarly opaque prepay technique has been responsible since 2005 for the inflation of two oil market bubbles. The first – a private sector bubble – culminated in July 2008 in a spike to $147 a barrel, and then a collapse to $35, causing great pain to producers used to high prices. At this point key producers – facilitated by friendly investment banks – resorted to prepay to finance themselves, and a public sector bubble was rapidly inflated during 2009.
In my analysis, the US and Saudis then hit upon a strategy that loosely “pegged” the oil price against the dollar within an agreed trading range, keeping prices relatively stable. But this trick only worked until early 2011, after which Fukushima and supply shocks in Libya and Iran have caused more turmoil.
I believe that there is now virtually nothing holding the oil market up, and that when (not if) Iran reaches an accommodation with the US on terms similar to those spurned by Dick Cheney in 2003, we will see the oil market price fall, possibly dramatically.
I have been warning for some time that risk-averse investors – whose very presence in the market causes the inflation they wish to avoid – are taking a much higher level of market risk than they appreciate. If I am correct, this will – sooner rather than later – give rise to the next Great Regulatory Disaster.
Perhaps worse than this, and particularly relevant to my work on financial market resilience, there is a significant risk of the sort of discontinuity in market price that took place in the tin market in 1985 when the market price collapsed overnight, from the price level supported by producer cartel stockpiling of $8,000 a tonne to the much lower price of $4000 a tonne, which reflected the influx of new low-cost tin supply.
The presence in the market of middlemen who have an interest in volatility and opacity means that we have now reached a stage where market manipulation is no longer an aberration: the market is the manipulation.
So what can be done? In the long term, crude oil prices can only go up, and many would argue that for the sake of the environment it is essential that carbon fuel prices are set at levels at which demand is low. The problem then is how best to distribute interationally and domestically the surplus value thereby created, in particular in investment in renewable energy, and above all in the cheapest energy of all – energy savings.
This will require a new (in fact very old) – and non-toxic – type of market architecture, and the good news is that this are already emerging as the current market paradigm approaches its end.
Sooner or later the Arab despots David Cameron is selling arms to will fall, and the states that backed them will pay the price
On the nauseating political doublespeak scale, David Cameron’s claim to “support the Arab spring” on a trip to sell weapons to Gulf dictators this week hit a new low. No stern demands for free elections from the autocrats of Arabia – or calls for respect for human rights routinely dished out even to major powers like Russia and China.
As the kings and emirs crack down on democratic protest, the prime minister assured them of his “respect and friendship”. Different countries, he explained soothingly in Abu Dhabi, needed “different paths, different timetables” on the road to reform: countries that were western allies, spent billions on British arms and sat on some of the world’s largest oil reserves in particular, he might have added by way of explanation.
Cameron went to the Gulf as a salesman for BAE Systems – the private arms corporation that makes Typhoon jets – drumming up business from the United Arab Emirates, Saudi Arabia and Oman, as well as smoothing ruffled feathers over British and European parliamentary criticism of their human rights records on behalf of BP and other companies.
No wonder the prime minister restricted media coverage of the jaunt. But, following hard on the heels of a similar trip by the French president, the western message to the monarchies was clear enough: Arab revolution or not, it’s business as usual with Gulf despots.
The spread of protest across the Arab world has given these visits added urgency. A year ago, in the wake of the uprisings in Tunisia and Egypt, it seemed the Gulf regimes and their western backers had headed off revolt by crushing it in Bahrain, buying it off in Saudi Arabia, and attempting to hijack it in Libya and then Syria – while successfully playing the anti-Shia sectarian card.
But popular unrest has now reached the shores of the Gulf. In Kuwait, tens of thousands of demonstrators, including Islamists, liberals and nationalists, have faced barrages of teargas and stun grenades as they protest against a rigged election law, while all gatherings of more than 20 have been banned.
After 18 months of violent suppression of the opposition in Bahrain, armed by Britain and America, the regime has outlawed all anti-government demonstrations. In western-embraced Saudi Arabia, protests have been brutally repressed, as thousands are held without charge or proper trial.
Meanwhile, scores have been jailed in the UAE for campaigning for democratic reform, and in Britain’s favourite Arab police state of Jordan, protests have mushroomed against a Kuwaiti-style electoral stitchup. London, Paris and Washington all express concern – but arm and back the autocrats.
Cameron insists they need weapons to defend themselves. When it comes to the small arms and equipment Britain and the US supply to Saudi Arabia, Bahrain and other Gulf states, he must mean from their own people. But if he’s talking about fighter jets, they’re not really about defence at all.
This is effectively a mafia-style protection racket, in which Gulf regimes use oil wealth their families have commandeered to buy equipment from western firms they will never use. The companies pay huge kickbacks to the relevant princelings, while a revolving door of political corruption provides lucrative employment for former defence ministers, officials and generals with the arms corporations they secured contracts for in office.
Naturally, western leaders and Arab autocrats claim the Gulf states are threatened by Iran. In reality, that would only be a risk if the US or Israel attacked Iran – and in that case, it would be the US and its allies, not the regimes’ forces, that would be defending them. Hypocrisy doesn’t begin to describe this relationship, which has long embedded corruption in a web of political, commercial and intelli gence links at the heart of British public life.
But support for the Gulf dictatorships – colonial-era feudal confections built on heavily exploited foreign workforces – is central to western control of the Middle East and its energy resources. That’s why the US has major military bases in Kuwait, Qatar, the UAE, Oman and Bahrain.
The danger now is of escalating military buildup against Iran and intervention in the popular upheavals that have been unleashed across the region. Both the US and Britain have sent troops to Jordan in recent months to bolster the tottering regime and increase leverage in the Syrian civil war. Cameron held talks with emirates leaders this week about setting up a permanent British military airbase in the UAE.
The prime minister defended arms sales to dictators on the basis of 300,000 jobs in Britain’s “defence industries”. Those numbers are inflated and in any case heavily reliant on government subsidy. But there’s also no doubt that British manufacturing is over-dependent on the arms industry and some of that support could usefully be diverted to, say, renewable technologies.
But even if morality and corruption are dismissed as side issues, the likelihood is that, sooner or later, these autocrats will fall – as did the Shah’s regime in Iran, on which so many British and US arms contracts depended at the time. Without western support, they would have certainly been toppled already. As Rached Ghannouchi, the Tunisian leader whose democratic Islamist movement was swept to power in elections last year, predicted: “Next year it will be the turn of monarchies.” When that happens, the western world risks a new backlash from its leaders’ corrupt folly.
Addressing an influential gathering of the Jewish community at an event in London, Prime Minister David Cameron defined what he perceives as the three key steps to secure Israel’s future: standing up to Iran, seizing the opportunities presented by the Arab Spring to spread democracy and making the hard choices needed to resolve Israel’s conflict with the Palestinians. Read the speech in full.
Speaking on the day that the European Union (EU) agreed to increase the pressure on Iran with another package of sanctions, the Prime Minister expressed his belief that the sanctions should be given time time to work. Mr Cameron added that- in the long term- if Iran does not address the concerns of the international community, “nothing is off the table”.
Mr Cameron said:
“Let’s be clear about the facts. Iran is flouting six United Nations resolutions.The Regime’s claim that its nuclear programme is intended purely for civilian purposes is not remotely credible. And it has shown its violent agenda by exporting terror and violence to Iraq, to Syria, to Gaza, to Lebanon and to many peace-loving countries across the world.
“Iran is not just a threat to Israel. It is a threat to the world. Now there are some who say nothing will work – and that we have to learn to live with a nuclear armed Iran. I say we don’t and we shouldn’t.But at the same time I also refuse to give in to those who say that the current policy is fatally flawed, and that we have no choice but military action.
“A negotiated settlement remains within Iran’s grasp for now. But until they change course, we have a strategy of ever tougher sanctions. Just today, Britain has secured a further round of new sanctions through the EU Foreign Affairs Council. And these relentless sanctions are having an impact no-one expected a year ago.
“They have slowed the nuclear programme. Iranian oil exports have fallen by 45 per cent. That’s 1 million fewer barrels a day. And $8 billion in revenues lost every quarter. The Rial has plummeted – losing around half its value between May and September. Inflation is soaring – thought to be as much as 50 per cent. And the Iranian Regime has had to establish an economic austerity taskforce to manage the pressure they have brought on their own people.
“Most significantly, there are signs that the Iranian people are beginning to question the Regime’s strategy with even pro-regime groups protesting at the actions of the Government. It’s mind boggling that the leaders of a nation so rich in oil have succeeded in turning their country into a banana republic desperately trying to put rockets into space while their people suffer.
“The Iranian regime is under unprecedented pressure and faces an acute dilemma. They are leading their people to global isolation and an economic collapse. And they know it.
“They know too that there is a simple way to bring sanctions to an end – by giving the international community the confidence we need that they are not and will not develop a nuclear weapon.
“I have said to Prime Minister Netanyahu that now is not the time for Israel to resort to military action. Beyond the unpredictable dangers inherent in any conflict, the other reason is this: at the very moment when the Regime faces unprecedented pressure and the people are on the streets; and when Iran’s only real ally in Syria is losing his grip on power, a foreign military strike is exactly the chance the Regime would look for to unite his people against a foreign enemy. We shouldn’t give them that chance.
We need the courage to give these sanctions time to work.
“But let me also say this. In the long term, if Iran makes the wrong choice, nothing is off the table. A nuclear armed Iran is a threat to Israel. And a threat to the world. And this country will work unwaveringly to prevent that from happening.”
Speaking about the Arab Spring, Mr Cameron said that it presents huge challenges but added:
”If we can show the strength and courage to engage with new democratic governments, their chance to establish the building blocks of democracy, fair economies and open societies offers the greatest opportunity for stability and peace in a generation.”
And on relations with Palestine the Prime Minister said:
“I know how hard the concessions needed for peace can be. But the truth is, time is running out for a two state solution – and with it Israel’s best chance to live in peace with its neighbours.”
Mr Cameron concluded by stating that Britain will always stand by Israel, protect Israel, and work with Israel on the path to peace:
“For now, Israel will continue to face acute threats and a hard road to peace. But with strength and courage we can, together, stand up to Iran. We can, together, seize the opportunities presented by the spread of democracy in the wider region. And we can together take the hard choices needed to resolve the conflict with the Palestinians.”
Iran faces more punitive measures against banking and energy sectors as EU tries to close loopholes over nuclear programme
The EU has tightened its sanctions against Iran by imposing stricter measures targeting the country’s banking, trade and energy sectors.
The new punitive package, which includes an embargo on Iranian natural gas, was agreed at the EU foreign affairs council in Luxembourg on Monday. Its aim is to close major loopholes that allow Iran to circumvent sanctions and secure funds for its disputed nuclear programme.
“The EU has today increased the pressure on Iran through another substantial package of sanctions,” said Britain’s foreign secretary, William Hague, who along with his French and German counterparts called for tighter sanctions last month.
“These are a direct response to Iran’s continued refusal to take concrete steps to address our concerns about its nuclear programme.”
The west suspects a military dimension to Tehran’s nuclear activities, but Iran has remained adamant in saying the programme is only for peaceful purposes.
The White House welcomed the new EU sanctions, with press secretary Jay Carney saying: “Rallying the world to isolate Iran and increasing the pressure on its leadership so that they stop pursuing a nuclear weapon has been a top priority for the president.”
The move “further strengthens international efforts to pressure and isolate the Iranian government”, Carney added.
Six UN security council resolutions call on Iran to halt enriching uranium, address questions about its nuclear programme and be more transparent. Despite this, Iran has defied sanctions and threats of an Israeli military strike by continuing to enrich uranium. Meanwhile, talks between Tehran and world’s major powers have reached stalemate.
“[Iran] is enriching uranium on a scale that has no plausible civilian justification and increasing its enrichment capacity at a heavily protected site that it originally sought to keep secret,” Hague said.
“Today we have taken steps to prohibit financial transactions with Iranian banks, to intensify restrictions in the energy sector and to limit some areas of trade, in order to choke off revenue that Iran is using for its nuclear programme, prevent it from accessing materials for the programme, and prevent it from circumventing existing sanctions.”
The EU has imposed an embargo on the imports of Iranian oil – among other measures – since July.
Iran’s supreme leader, Ayatollah Ali Khamenei, addressing crowds in the north-eastern city of Shirvan on Monday, said enemies would not be able “to disrupt the calmness in the country”. Last week, he described western sanctions as “barbaric” and “a war against a nation”.
The new banking measures prohibit any transactions with Iranians banks and financial institutions unless specifically authorised or exempted, such as for humanitarian purposes.
Iran will also face a ban imposed on the purchase, import and transport of its natural gas. The sanctions prohibit the construction of oil tankers for Iran, the flagging and classification of Iranian oil tankers and cargo vessels.
Hague warned “the choices being made by Iran’s leaders are already having a profound impact,” a possible reference to Iran’s recent financial problems. Earlier this month, its currency, the rial, was sent into a tailspin, hitting an all-time low.
Trita Parsi, president of the National Iranian American Council, reacted to the news by drawing a comparison between “the important principle” the EU had adopted and the one the UN had settle on with sanctions against Iraq. “With Iraq, that of course ended up with 500,000 Iraqi children dead, resulted in the shortage of medicine, and other needs, and ended up ultimately to forceful invasion and war.”.
Referring to continuing pressure on Iran from the west, Parsi said: “There’s nothing peaceful about economic warfare at the end of the day and particularly when the embargo is as broad as this is, everything is forbidden unless explicitly permitted, that’s the opposite of smart sanctions, when you don’t have smart sanctions, you have economic warfare
“The EU says this is aimed at getting Iran back to negotiate more seriously, to be frank it appears not to be about getting Iran to negotiate seriously but rather getting Iran to capitulate quickly.”
Police use teargas and batons on demonstrators and Tehran bazaar closes as value of rial plunges
Hundreds of demonstrators in the Iranian capital clashed with riot police on Wednesday, during protests against the crisis over the country’s currency. Police used batons and teargas to try to disperse the crowds.
The day after President Mahmoud Ahmadinejad appealed to the market to restore calm, the Grand Bazaar – the heartbeat of Tehran’s economy – went on strike, with various businesses shutting down and owners gathering in scattered groups chanting anti-government slogans in reaction to the plummeting value of the rial, which has hit an all-time low this week.
“Mahmoud [Ahmadinejad] the traitor … leave politics,” shouted some protesters, according to witnesses who spoke to the Guardian. Other slogans were “Leave Syria alone, instead think of us,” said opposition website Kaleme.com.
Iran’s alleged financial and military support for the regime of Bashar al-Assad appears to have infuriated protesters in the wake of the country’s worst financial crisis since the Iran-Iraq war in the 1980s.
Angry protesters and foreign exchange dealers were demonstrating near the bazaar in the south of the capital, where many exchange bureaux are located.
“The Bazaaris shouted ‘Allahu Akbar’ [God is great] as they closed down their shops in the morning,” said a witness. “It’s impossible to do business in the current situation.” Amateur videos posted on YouTube which appeared to have been taken from Wednesday’s protests, showed demonstrators encouraging Bazaaris to close down shops in solidarity. Security forces were soon sent to quell the protests.
“They used teargas to disperse demonstrators in Ferdowsi Street and also blocked the streets close to the protests in order to prevent people joining them,” said another witness, who asked to remain anonymous. “Some shop windows in that area have been smashed and dustbins set on fire.” A number of demonstrators had been arrested, according to Kaleme.
A bazaar official, Ahmad Karimi Esfahani, denied that the “turbulences” were linked to the business owners, claiming said shops were closed for security reasons and not as part of a strike. “The bazaar will open tomorrow as normal,” he told the semi-official Ilna news agency. A conservative website, Baztab, described the clashes as “suspicious”, denying Bazaaris were involved.
The devaluation of the rial and soaring prices of staple goods are the latest signs that western sanctions – targeting the regime’s nuclear programme – and government mismanagement are compounding the country’s economic woes.
On Wednesday, many foreign exchange dealers and bureaux across the country refused to trade dollars and some currency-monitoring websites refused to announce exchange rates.
Some Iranians expressed anger on social networking websites over the national TV blackout of the protests, saying it discussed the European financial crisis with little if any coverage of Tehran’s unrest. The authorities were also reported to have jammed signals of the BBC’s Persian service as the protest unfolded.
The government has failed to bring the rial under control despite several attempts. It has lost 57% of its value in the past three months and 75% in comparison with the end of last year. The dollar is now three times stronger than early last year. The economy minister, Shamseddin Hosseini, said the government planned to “gather up” the unofficial currency market in the latest desperate ditch to curb the crisis.
On Tuesday Iranian authorities announced they would send security services to calm the market but Wednesday’s developments appear to show that the move has backfired.
Ahmadinejad was bombarded with questions about the currency crisis on Tuesday as he spoke to reporters in a press conference but the embattled president, who is under fire from his conservative rivals, rejected the suggestion that it was the result of his economic policies or government incompetence.
Instead, he blamed the rial’s slump on his enemies abroad and opponents at home, saying his government was the victim of a “psychological war”. Ahmadinejad acknowledged western sanctions have contributed to the crisis.
An opinion poll posted on a conservative website, Khabaronline.ir, showed that more than 90% of those participated were not convinced with Ahmadinejad’s responses on Tuesday.
Iran’s supreme leader, Ayatollah Ali Khamenei, speaking to elites on Wednesday, said the country was under pressure because “it did not yield to the demands of tyrannies”.
Iran is one of the world’s largest oil producers and relies on crude sales as the main source of its the foreign currency reserves. The latest US and EU embargo on the imports of Iranian oil has affected that reserve, sending the rial tailspinning and making the dollar hard to come by.
Commenting on Iran’s currency slump, the US secretary of state, Hillary Clinton, said that sanctions could be “remedied” swiftly if Tehran were cooperating with the international community to address the questions about its disputed nuclear programme.
“They have made their own government decisions – having nothing to do with the sanctions – that have had an impact on the economic conditions inside of the country,” Clinton told reporters.
“Of course the sanctions have had an impact as well, but those could be remedied in short order if the Iranian government were willing to work with the P5+1 [the five security council members plus Germany] and the rest of the international community in a sincere manner,” she added.