Iran nuclear deal will come down to economic pressure

It’s all smiles until the sanctions begin. Roland Schlager

Talks in Vienna about the future of Iran’s nuclear programme have failed for the time being. The countries involved have agreed to resume discussions in December with a view to reaching a political agreement by March 1 next year and a final deal by the end of June.

This deadline will probably be missed too, but Iran may have to eventually give ground to the US – not in the name of diplomacy, but to avoid economic collapse.

Diplomats from Iran, the US, the UK, France, Germany, China, and Russia all declared “progress” at the Vienna talks, even as the latest deadline came and went. And indeed, to proffer anything other than warm words would have been to bury years of discussions and to face the uncertainty of confrontation but those warm words can’t mask what is a fundamental division.

Currently, Iran’s enrichment is provided by about 10,000 R-1 centrifuges, with another 10,000 installed but not yet operational. Rather than putting the new ones into operation, the US and the European partners want Iran to reduce the number of centrifuges in operation to between 6,000 and 7,000. They also want to prevent Iran from introducing the more advanced IR-2m centrifuges it would need to expand its programme to its full ambitions.

The countries involved could negotiate for years without resolving these opposed positions.

The view from Tehran

Reducing, or even just freezing, the size of Iran’s nuclear programme would be a smack-down of its oft-proclaimed right to a civilian nuclear programme. So it will not be the Iranians who step away from the negotiating table. Despite his entrenched distrust of the Americans, Ayatollah Khamenei has continued to back president Hassan Rouhani in his pursuit of a deal all the way to Vienna, and he will continue to back him in the future. The supreme leader has even sought to silence anyone opposing continued talks in his own country.

This is partly because Iran wants to pin any final breakdown on the Americans. As it seeks to secure relations with key political and economic partners like China, Tehran will maintain that it is the “positive” power and that it wants to reach an agreement.

But economic need may eventually trump politics. A lasting failure in the talks would prompt years of even tougher sanctions on an economy which is suffering from long-term losses in investment and productivity and is now reeling from a sharp drop in the price of oil.

For years, the US strategy has been to use economic pressure to bring Iran to the negotiating table and get the terms that Washington wants. And to a certain extent, that has worked. It re-opened talks in autumn 2009, after Tehran faced a shortage of uranium. It spurred them in 2012, as the European Union added a tough set of sanctions and – most importantly – it persuaded the supreme leader in autumn 2013 that he had to support the Rouhani Government’s “engagement”.

The US may now decide that it must tighten the economic screws, waiting for Iran to cry uncle and accept the reduction in its enrichment capacity.

This is why the deadline extension was surprisingly long. The Americans and their partners know that the supreme leader will not buckle in coming days or weeks. But they think that maybe, just maybe, even Ayatollah Khamenei will accept over months that he cannot subject his people to more hardship. And then he will finally succumb to an agreement that constrains the Islamic Republic’s nuclear programme for years to come.

That is handy for the US, where opposition to negotiating with Iran is likely to increase in the coming months. In January, the new Congress will have a Republican majority in both houses. That will not guarantee passage of further sanctions against a veto by President Obama, but it will definitely block any removal of sanctions that are in existing legislation.

Even if President Obama and his advisors would accept a limited expansion of Iran’s uranium enrichment, Congress will not — in January, July, or a date far, far away.