Merkel cautious on compensation after U.S. pullout

German Chancellor Angela Merkel signalled Thursday that it won’t be feasible to offer wide-ranging compensation to European companies affected by U.S. sanctions over Iran’s nuclear program.

President Donald Trump last week withdrew the U.S. from the 2015 Iran nuclear deal, but European signatories vowed to salvage it. Trump’s move means that Iran is likely to be hit with U.S. sanctions. It is possible they might also have an impact on some European companies doing business with Iran.

Merkel said after EU leaders met in Bulgaria that “all European Union member states still stand by this agreement.’’

But she was cautious about possible compensation for companies that do business with Iran. She said that “we can see whether we can give small and medium-sized companies certain relief. That is being examined.’’

However, “as for compensating all businesses in a comprehensive way for such measures by the United States of America, I think we cannot and must not create illusions,’’ she added.

In an effort to keep Iran in the deal, the EU’s executive Commission announced that it will start work on revising a so-called blocking regulation that was drawn up in 1996 in response to the fallout from U.S. sanctions on Cuba, and on Libya and Iran.

The measure has never been used, but in essence it bans companies from respecting American sanctions where those sanctions might damage EU interests, notably trade and the movement of capital.