Iran sanctions: Amid signs they're working, EU aiming for more

Western powers are planning another turn of the sanctions screw over Iran’s nuclear program even as the deployment Wednesday of riot police in Tehran’s streets suggests that existing sanctions against Iran are having a significant impact on its economy.

Following recent US steps to fill the holes of the sanctions already in place, European Union foreign ministers will meet this month with the goal of implementing another round of measures aimed at pressuring the regime.

“Our hope is to announce a new set of sanctions at the meeting on Oct. 15,” says a senior European official in Washington. “We know the existing [EU] sanctions are really hurting,” the official says, adding that the focus now is to “bring the Iranian economy to its knees – in a way that really hurts the regime more than the Iranian people.”

The renewed focus on sanctions to constrain Iran to change course in its nuclear program comes as concerns have subsided that an Israeli military strike against Iran’s nuclear facilities is imminent.

Israeli Prime Minister Benjamin Netanyahu told the international community through his speech at the United Nations General Assembly last week that Israel has a “red line” for Iran’s uranium enrichment program that will trigger action. But he also suggested that Israel does not see Iran crossing that line until at least next spring or summer.

US and EU officials say that since his speech, Mr. Netanyahu has indicated in discussions that he is prepared to see what results redoubled sanctions and world powers’ negotiations with Tehran can yield. Netanyahu is expected to visit European capitals soon to press for toughened sanctions, but it seems unlikely his trip would take place before the EU foreign ministers' meeting.

The EU is expected to consider new measures aimed at the Iranian Central Bank, and additional means of cutting off Iran’s access to transactions through European banks.

The EU this summer began a full embargo on imports of Iranian oil, a move that experts say has had a significant impact on Iran’s economy. At the same time ,the United States has reinforced efforts to compel other international buyers of Iran’s crude to cut or end their purchases – by cutting off the US financial system to countries still buying Iranian oil.

One of the clearest effects of the sanctions is a steep decline in the value of Iran’s currency, the rial – a collapse that played a role in the demonstrations that hit Tehran’s streets Wednesday. Riots erupted after police wielding batons and hurling tear gas moved to shut down the capital’s black-market trade in foreign currencies.

The clashes follow months of warnings from some Iranian politicians and clerics that the country’s sinking economy could lead to unrest.

That estimation parallels a recent Israeli Foreign Ministry report that found social malaise in Iran mounting over economic conditions. The report even held out the prospect of an organized public reaction to deteriorating living conditions eventually challenging the Iranian regime.

Western officials are encouraged by what they say are signs of weakness in the regime, and are hopeful that the turmoil might yet prompt Iran’s leaders – supreme leader Ayatollah Ali Khamenei is the only one who matters, they say – to reach a resolution that verifiably blocks Iran’s acquisition of a nuclear weapon.

But they acknowledge that, before arriving at that point, the tough sanctions on Iran are affecting the Iranian population in unforeseeable ways.

Calling a change in the Iranian regime “really the best result,” the senior European official says Western officials realize the toughened sanctions could have the opposite effect.

“Yes, there is a risk” of deteriorating living conditions being blamed on the international community and as a result reinforcing the regime, he says. “But for the moment, we are not seeing that.”