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Decision shows crisis-weakened bloc can still flex foreign policy muscle.
They show the level of international anxiety about the Tehran's nuclear program, but are also a sign that the crisis-weakened EU is still capable of taking decisive foreign policy action.
Many within Europe are concerned that the EU's place in the world has been undermined by the euro zone debt crisis.
Asian and African officials have questioned Europe's role as an economic or political role model given its dithering response the financial crisis. Arab commentators ask how the EU can still lecture on democracy when un-elected technocrats run Italy and Greece. Some wonder whether the EU’s muted response to protests in Russia are linked to Europe’s efforts to muster support from emerging powers for a beefed-up international safety net for troubled economies.
Read more: European Union agrees to Iran oil sanctions.
“The euro crisis increasingly threatens not just the European Union’s internal economic unity but also the cogency of its international projection,” Richard Youngs, director of the Madrid-based think tank FRIDE, wrote in a recent paper. “It is widely felt that the ever-more consuming nature of the economic crisis can only diminish European foreign policy effectiveness.”
However, the 27 EU nations were able to adopt a package of strong measures against Iran, despite the potential negative economic impact on some members hardest hit by the economic crisis. Italy, Spain, and in particular, Greece depend heavily on Iranian oil imports. Alternatives may be more expensive – increasing pressure on their economies.
To ease the impact on those countries, the EU ban on the import, purchase and transport of crude oil and petroleum products from Iran will exclude existing contracts up to 2012.
Read more: Is Iran embargo a step toward war?
The EU sanctions also ban imports of Iranian petrochemical products and technology exports and new investments for Iranian petrochemical companies.
Assets of the Iranian central bank were frozen and trade with Iranian public bodies in gold, precious metals and diamonds was banned.
Europe is Iran’s biggest trading partner, importing 14.5 billion euro worth of goods in 2010, 90 percent of which were oil related. Nevertheless, Iran has been reducing its reliance on the European market. Around 60 percent of its exports now go to Asian markets, principally China, Japan and South Korea.
The real test of the EU’s foreign policy clout may come as it joins with the US to seek to persuade Iran’s Asian customers to join the boycott.