EU Stand-off With Iran, In Times Of Economic “Peril” …

• January 25th, 2012
• Posted by EUEditor

Australia’s Foreign Minister, Kevin Rudd in London on Tuesday backed the European Union embargo on oil imports from Iran, decided on the day before.

Talk of a crisis over the flare-up in relations with that country coincided with renewed expressions of concern by the IMF over the larger crisis, with weakening  in the world economy.

PRESSURE OVER NUCLEAR PROGRAM

Mr Rudd said the Australian government would join the Iran ban, designed to put pressure on the government of that country to open up and pull down its nuclear development program.

He was attending the annual Australia-United Kingdom Ministerial consultations (AUKMIN) with the Defence Minister, Stephen Smith, the UK Foreign Secretary, William Hague and Defence Secretary, Philip Hammond. (Picture, signing Memorandum of Cooperation and Information Sharing).

See EUAustralia Online, “Rudd in EU …”, 20.1.12.

Whereas 20% of Iran’s oil exports go to the EU, very little of it is bought by Australia, though retaliatory moves could do significant harm to Australian exports.

All 27 EU member states elected to join the ban, asserting Iran’s activities were consistent with working to produce nuclear weapons.

They said the Iranian government had defied resolutions of the United Nations Security Council, and had been enriching uranium beyond the requirement for nuclear power stations.

They indicated the door would remain open for talks, postponing action until July, a time factor helpful for finding alternative supplies; particularly for Greece, a member country both in trouble on  the economic front, and currently dependent on Iran for oil.

Joining in, Kevin Rudd said it “needed to be understood, that Iran’s actions are globally unacceptable.”

Brinkmanship was in the air, Iran having threatened to block the vital trade route through the Strait of Hormuz (see map, above), while in Washington, President Barack Obama said he would support the EU ban.

HARD TIMES

Other matters, expressly to do with money, would also continue to preoccupy EU heads of government this week, the International Monetary Fund (IMF) on Tuesday foreshadowing recession in Europe during 2012.

It down-graded its projection  for world economic growth this year to 3.3%, as against4% announced last September.

GREAT DEPRESSION?

With the IMF warning of “peril” in store if the European debt crisis could not be resolved, its Managing Director, Christine Lagarde (picture), on Monday brought out the word “depression”; reiterating support for the joint issue of “Eurobonds”, with European states sharing the risk on borrowings, and  again calling for a large expansion of the funds set aside to support borrowing by governments under pressure from sovereign debt.  See European Stability Mechanism (ESM), European Financial Stability Facility (EFSF), EUAustralia Online, “Europe, Debt and 2012”, 27.12.11.

The situation could “easily fall into a 1930s moment”, she told an audience in Berlin, “where trust and cooperation break down and governments turn inwards upon themselves.”

Reference

Department of Foreign Affairs and trade – Australia, Canberra, Transcript of joint Australia-UK Ministerial Meeting (AUKMIN) press conference, 24.1.12.                                 http://foreignminister.gov.au/transcripts/2012/kr_tr_120124_press_conference.html, (25.1.12).

Alexandra Hudson, “Lagarde: IMF resources may grow if Euro zone boosts bailout fund”, Reuters, London, 24.1.12.     http://www.reuters.com/article/2012/01/24/us-imf-firepower-idUSTRE80N0QF20120124, (25.1.12).

Washington Post (Bloomberg, AP), Washington, “MF urges nations to focus on growth, countering push for budget cuts advocated by Germany”, 25.1.12. http://www.washingtonpost.com/business/markets/imf-urges-nations-to-focus-on-growth-countering-push-for-budget-cuts-advocated-by-germany/2012/01/24/gIQADTSTNQ_story.html, (25.1.12).

Pictures   dfat, iranview.org

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