Ostensibly about nuclear power, the agreement revolves around peace and the EU’s role with Iran reinstated.
When we hit newsstands on 1 July, the historic agreement between the United States and Iran will in all likelihood be 24 hours old. I recently had the opportunity to meet with several top White House and State and Treasury Department officials, as well as the chance to collect the impressions of respected members of the Iranian establishment. Between the lines of their different cultural approaches, I believe I glimpsed in both camps a sense that a positive conclusion to the negotiation process is inevitable, an outcome I too embrace and accept as a given in developing the ensuing arguments.
The momentous importance of an agreement over the nuclear controversy between the US and Iran goes well beyond any merely technical appraisal, so much so that I would instead call it an actual peace treaty between the only global superpower and the only surviving superpower (in the wake of diverse wars and ‘springs’) in the strategic Middle Eastern and Mediterranean theatre.
A few regional figures will help back this supposition. Iran is the third largest country in terms of population (80 million inhabitants), after Egypt (86 million) and Turkey (81 million), with the third-largest economy (with a GDP of €368 billion), behind Saudi Arabia and the United Arab Emirates. Iran has the second-largest reserves of natural gas in the world and the fourth-largest oil reserves, and it is also the largest automotive market in the region. And there is an equally significant sociological figure in my opinion: 65% of the population is under 35 and virtually all (98%) young people between the ages of 15 and 24 received a good education.
Some aspects of the agreement also need to be spelled out (for the devil is always in the details): the Plan of Action agreed upon in April — between Iran and the five members of the United Nations Security Council (the US, the UK, France, Russia and China) plus Germany — led to the signing of a framework agreement, to be confirmed with an executive agreement by 30 June 2015.
There are two mainstays to the agreement. The first is that Iran will forsake all components of its nuclear programme that could lead to the building of an atomic bomb. Secondly, the United States and the European Union will gradually lift the sanctions related to Tehran’s nuclear programme. Beware, however! It must be stressed that the agreement only refers to sanctions related to the nuclear programme and not those linked to terrorism or human rights violations that will remain in effect until substantial steps forward have been made on these specific issues.
The majority of economists specialising in this field have assessed the damage to the Iranian economy caused by sanctions as amounting to approximately 20% of its GDP (between 2012 and 2013 the Iranian GDP contracted by almost 9%), while it could grow by as much as 5% annually for at least five years as soon as the limitations placed on energy exports and bank transactions are lifted.
In a matter of days, the daily production of Iranian oil could increase from the current 3.3 million to four million barrels. Iran could recover the $100 billion (€88bn) in frozen oil assets, mainly held in Asian banks, which could then be repatriated once the SWIFT international bank transfer network is reinstated. The return of foreign investors would enable the country to bridge the fearful gap in national infrastructure that has not been upgraded for the last 30 years.
Iran’s reappearance on the international scene would also enable a rapid modernisation of the governance structures of the country, which is currently 136th in Transparency International’s Corruption Perception Index and 130th in the World Bank’s Ease of Doing Business rankings.
I have purposefully saved for last the role of the European Union, which is being represented in these negotiations by ‘Foreign Minister’ Federica Mogherini, and which according to a United Nations mandate has been explicitly assigned the task of “facilitating negotiations”. This facilitator role has been carried out to perfection by the Italian foreign policy chief of the EU, who is entirely suited for this type of challenge: she is cool-headed, scientific, analytical and an overachiever. And the outcome has proven that the EU when it acts with single-minded purpose is authoritative and can perform a complementary role to the American power, which is often represented by a not-so-subtle diplomatic corps.
The most interesting results of this accord will be apparent in Iranian’s new frontline role in managing power balances in the region and solving its many crises: IS, Syria and Afghanistan.
Seeing will be believing.
When we hit newsstands on 1 July, the historic agreement between the United States and Iran will in all likelihood be 24 hours old. I recently had the opportunity to meet with several top White House and State and Treasury Department officials, as well as the chance to collect the impressions of respected members of the Iranian establishment. Between the lines of their different cultural approaches, I believe I glimpsed in both camps a sense that a positive conclusion to the negotiation process is inevitable, an outcome I too embrace and accept as a given in developing the ensuing arguments.
The momentous importance of an agreement over the nuclear controversy between the US and Iran goes well beyond any merely technical appraisal, so much so that I would instead call it an actual peace treaty between the only global superpower and the only surviving superpower (in the wake of diverse wars and ‘springs’) in the strategic Middle Eastern and Mediterranean theatre.
