Features

Iran ditches the nuclear deal

International inspectors have confirmed that Iran has exceeded a critical limit on how much nuclear fuel it may possess. Why did it happen and how should we respond?

Iranian President Hassan Rouhani  © AFP/Getty Images
President Hassan Rouhani: a sharp shift in strategy

Why did it happen and how should we respond? Matthew Partridge reports

Iran's "escalating confrontation" with the United States seems to be getting worse, says David E. Sanger in The New York Times. The Islamic republic has "violated a key provision of the 2015 international accord to restrict its nuclear programme" .

International inspectors have confirmed that Iran has exceeded a critical limit on how much nuclear fuel it may possess under the agreement. (The US abandoned the deal last year and reimposed sanctions but Europe is sticking with it.) Iran also henceforth intends to enrich its nuclear fuel to a purer level, a "provocative" move that gets it closer to developing a nuclear weapon. This marks "a sharp shift in strategy for Iran". Until this week it had continued to respect the terms of the agreement.

Is it America's fault?

It's wrong to blame the West for Iran's latest actions, says The Wall Street Journal.The regime has always "viewed the deal as a pause, not an end, to its nuclear ambitions". Even Iran's top nuclear official has acknowledged that "the regime had long been preparing to break out from the deal and pursue nuclear weapons". We shouldn't overlook Iran's other crimes, which include "maintaining a destabilising presence in Syria, plotting terrorist attacks in Europe, and calling for the destruction of Israel". Recent attacks on Middle Eastern oil pipelines are also "part of a pattern that long preceded the U.S. maximum-pressure policy".

Iran's actions present Europe with a dilemma, says Andrew England in the Financial Times. On the one hand it "must condemn the Iranian breach" but at the same time it wants "to prevent the accord's total collapse". One possible solution would be to step up support for Instex, the special purpose vehicle that Europe has established in order to facilitate trade with Iran, provided Iran cuts back on pursuing nuclear fuel. At present Instex, "holds just a few million euros in initial capital", and so "does not come close" to meeting the republic's needs, especially as "its economy has plunged into recession".

What nonsense, says Alan Mendoza for City AM. It would be a mistake for the UK, France and Germany "to surrender to Iranian demands and allow Tehran to play fast and loose with the terms of a treaty that we have fought hard to keep alive, but which is now fundamentally breached". Instead, we need to "remind Iran that if it has peaceful intentions, it should welcome the opportunity to end sanctions in exchange for a permanent dimming of its nuclear weapons potential". If it ignores this offer, we "should stand firm with our US ally" and "snap back our own sanctions to show Iran that our commitment to non-proliferation is an enduring one".

Recommended

MoneyWeek's quiz of the week, 9-15 January
Economy

MoneyWeek's quiz of the week, 9-15 January

Joe Biden has promised to vaccinate millions of Americans in his first 100 days in office. But how many? And what else happened this week? Test your r…
15 Jan 2021
15 January 1759: British Museum opens
This day in history

15 January 1759: British Museum opens

On this day in 1759, the British Museum opened in Bloomsbury after Sir Hans Sloane left his of collection of books, manuscripts and specimens to the n…
15 Jan 2021
MoneyWeek's quiz of the week, 2–8 January
Economy

MoneyWeek's quiz of the week, 2–8 January

French burglars pelted gendarmes with part of their €350,000 haul to escape capture. But what was it? And what else happened this week? Test your reco…
8 Jan 2021
Will America’s “healthy reflation” end in inflation?
US stockmarkets

Will America’s “healthy reflation” end in inflation?

Democratic control of the US Congress would give Joe Biden huge scope to stimulate the economy. But willie mean a “healthy reflation” for the economy …
8 Jan 2021

Most Popular

A simple way to profit from the next big trend change in the markets
Investment strategy

A simple way to profit from the next big trend change in the markets

Change is coming to the markets as the tech-stock bull market of the 2010s is replaced by a new cycle of rising commodity prices. John Stepek explains…
14 Jan 2021
Forget austerity – governments and central banks have no intention of cutting back
Global Economy

Forget austerity – governments and central banks have no intention of cutting back

Once the pandemic is over will we return to an era of austerity to pay for all the stimulus? Not likely, says John Stepek. The money will continue to …
15 Jan 2021
Here’s why markets have shrugged off the US political turmoil
Investment strategy

Here’s why markets have shrugged off the US political turmoil

Despite all the current political shenanigans in the US, markets couldn’t seem to care less. John Stepek explains why, and what it means for your mone…
7 Jan 2021