France pushes $15 billion credit line plan for Iran, if U.S. allows it

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PARIS/DUBAI (Reuters) – France has proposed offering Iran about $15 billion in credit lines until year-end if Tehran comes fully back into compliance with its 2015 nuclear deal, a move that hinges on Washington not blocking it, Western and Iranian sources said.

French Foreign Minister Jean-Yves le Drian said talks on the credit arrangement, which would be guaranteed by Iranian oil revenues, were continuing, but U.S. approval would be crucial.

The idea is “to exchange a credit line guaranteed by oil in return for, one, a return to the JCPOA (Iran nuclear deal)…and two, security in the Gulf and the opening of negotiations on regional security and a post-2025 (nuclear program),” le Drian told reporters. “All this (pre)supposes that President Trump issues waivers.”

European leaders have struggled to dampen brewing confrontation between Tehran and Washington since U.S. President Donald Trump pulled out of the deal, which assures Iran access to world trade in return for curbs on its nuclear program.

The United States reimposed sanctions on Iran last year and tightened them sharply this year. Iran has responded by breaching some of the limits on nuclear material in the deal, and has set a deadline for this week to take further steps.

French President Emmanuel Macron has spent the summer trying to create conditions that would bring the sides back to the negotiating table. At a G7 meeting in France last month, Trump appeared open to the idea of credit lines, though U.S. officials later ruled out lifting sanctions as a condition for new talks.

An Iranian delegation was in Paris on Monday, including oil and finance officials, for talks to fine-tune details of credit lines that would give Iran some respite from sanctions that have crippled its economy and cut off its oil exports.

“The question is to know whether we can reach this $15 billion) level, secondly who will finance it, and thirdly we need to get at the very least the tacit approval of the United States. We still don’t know what the U.S. position is,” said a source aware of the negotiations.

A senior Iranian official familiar with the negotiations said: “France has offered the credit line of $15 billion but we are still discussing it. It should be guaranteed that we will have access to this amount freely and also Iran should be able to sell its oil and have access to its (own) money.”

“President Macron is trying hard to resolve the issue and help to save the deal .. and we have overcome some issues and narrowed gaps but still there are remaining issues.”

A second Iranian official said: “Although the EU and particularly France have goodwill, they should convince the U.S. to cooperate with them .. If not, Iran is very serious about decreasing its nuclear commitments. There is no logic to respect the (2015) deal, if it has no benefits for us.”

A European diplomatic source confirmed the $15 billion figure.

LE MAIRE IN WASHINGTON

French Finance Minister Bruno Le Maire will be in Washington on Tuesday in part to discuss the credit mechanism. One diplomat said that might be when the United States gives its response to French proposals.

Iranian President Hassan Rouhani said on Tuesday the Islamic Republic would never hold bilateral talks with the United States – the two have had no diplomatic relations for four decades – but said that if all U.S. sanctions imposed on Iran were lifted, Washington could join multilateral talks between Tehran and the other parties to the 2015 pact.

The Trump administration says the nuclear deal is deficient as many of its terms expire after a decade and it does not cover non-nuclear issues such as Iran’s ballistic missile program and its support of proxy forces around the Middle East.

Iran says it aims to keep the 2015 deal alive, but cannot abide by it indefinitely unless the European countries that signed it ensure it receives the promised economic dividends.

Tehran has called on the Europeans to accelerate their efforts to alleviate the impact of U.S. sanctions. Rouhani stressed on Tuesday that Iran would take its next step in scaling back its nuclear commitments by Thursday unless the Europeans keep their promises to salvage the deal.

Behrouz Kamalvandi, spokesman for the Atomic Energy Organization of Iran (AEOI), said on Tuesday that Iran was capable of resuming enrichment of uranium to 20% fissile purity within two days. Twenty percent purity is considered an important intermediate stage on the road to producing the 90% pure fissile uranium needed for an atomic bomb.

The first source said talks for now did not go into how the credit lines would be repaid, although it would require Iranian oil exports to resume eventually. Certain countries were discussing with France possible involvement in such a mechanism.

“Importing the oil at some point is essential, but we need to have the agreement of the Americans. We are trying to persuade them (the Iranians) not to do more (reductions in commitment to the nuclear deal), but it’s not the end of the story for the mechanism if they do,” the source said, adding that for now Iranian backtracking was reversible.

Iran has asked for $3 billion a month to extend the proposals beyond the end of this year, the source said.

Macron has said that as a condition of any credits, Iran must return fully to the terms of the nuclear deal and open a negotiation on those other issues. French officials declined to comment on the details of the plan.

“It’s extremely sensitive and we don’t want the opponents of this idea to make it fail. It’s extremely volatile,” said a French diplomatic source.