Bank scared off from Iran by US sanctions

A GAMBIT by Brussels to use European Investment Bank (EIB) funding to shore up the Iran nuclear deal is purely symbolic, EU officials have admitted, amid fears that US sanctions could push the multilateral lender into default.

President Donald Trump pulled the US out of the accord – which saw sanctions against Tehran lifted in return for curbs on its nuclear programme – in May.

Washington has since told countries they must stop buying the Opec producer’s oil from Nov 4 or face financial consequences.

The other signatories – Britain, France, Germany, China and Russia – have vowed to stay in the deal but appear powerless to stop companies pulling out of Iran for fear of US penalties.

Such secondary sanctions could hit European businesses and shut the EIB out of dollar markets, forc- ing it to default on payments. The European Commission trumpeted EIB support for EU investment in Iran as a reason for Tehran to abide by the nuclear deal. But the bank, which is independent, told The Sunday Telegraph “it cannot support projects in Iran under the current circumstances”.

The commission said it would change the rules governing the EIB so it could derisk EU investment in the country, but would not force the EIB to support investment in Iran.

Asked if the move was symbolic, one well-placed EU source said “Yes”.

But the deal looked in further doubt yesterday as its remaining signatories failed to persuade Tehran in a summit in Vienna that they would be able to fully compensate for economic losses caused by the US exit.

Hassan Rouhani, Iran’s president, told French President Emmanuel Macron in a phone call before the meeting that the package as it stood fell short of their demands.