Most French companies hoping to continue doing business in Iran after the US imposes new sanctions on the country will find it impossible to do so, Finance Minister Bruno Le Maire said Tuesday.
These companies “won’t be able to stay because they need to be paid for the products they deliver to, or build in Iran, and they cannot be paid because there is no sovereign and autonomous European financial institution” capable of shielding them, Le Maire told BFM television.
The new sanctions announced by US President Donald Trump in May after he pulled out of a 2015 nuclear deal with Tehran would punish any foreign firm operating in Iran which also does business with the US or in dollars.
“Our priority is to build independent, sovereign European financial institutions which would allow financing channels between French, Italian, German, Spanish and any other countries on the planet,” Le Maire said.
“It’s up to us Europeans to choose freely and with sovereign power who we want to do business with,” he added.
“The United States should not be the planet’s economic policeman.”
Le Maire and his EU counterparts have been trying to secure exemptions for their firms, many of which rushed back into Iran after the landmark accord curtailing Tehran’s nuclear programme.
French carmaker Renault, which does not sell cars in the US, has said it will remain despite the sanctions.
But French oil group Total and carmaker PSA have already indicated they are likely to pull out of Iran.
Analysts have warned it would be nearly impossible to protect multinationals from the reach of the “extraterritorial” US measures, given the exposure of large banks to the US financial system and dollar transactions.
The first round of the new sanctions, targeting Iran’s auto and civil aviation sectors, are scheduled to go into effect on August 6.
Le Maire’s calls for reinforced European institutions come as French President Emmanuel Macron heads to Germany on Tuesday seeking a roadmap for eurozone reforms with Chancellor Angela Merkel.
Macron is pushing for deeper integration, including a common eurozone investment budget; new fiscal rules for tech giants; a harmonised EU corporate tax; and measures to shore up eurozone banks.
The proposals are on the agenda for a key EU summit on June 28-29.
“We’re at the moment of truth for the Franco-German relationship, and the moment of truth for the eurozone as a whole,” Le Maire said.
“In the next few hours, either the president and the chancellor reach an accord on these four points, and they will have made a major stop toward reinforcing the eurozone, that is to say our economic stability and our financial security,” he said.
“Or else, we’re not able to sign a deal, and we enter — I don’t hesitate to say it — a turbulent time for the eurozone.”