SOFIA, Bulgaria (AP) — German Chancellor Angela Merkel is signaling it won't be feasible to offer wide-ranging compensation to European companies affected by U.S. sanctions over Iran's nuclear program.
President Donald Trump last week withdrew the U.S. from the 2015 Iran nuclear deal, but European signatories vowed to salvage it. Trump's move means that Iran is likely to be hit with U.S. sanctions. It is possible they might also have an impact on some European companies doing business with Iran.
Merkel said Thursday after EU leaders met in Bulgaria that "all European Union member states still stand by this agreement."
But she was cautious about possible compensation for companies that do business with Iran. She said that "we can see whether we can give small and medium-sized companies certain relief. That is being examined."
However, Merkel added: "As for compensating all businesses in a comprehensive way for such measures by the United States of America, I think we cannot and must not create illusions."
In an effort to keep Iran in the deal, the EU's executive Commission announced that it will start work on revising a so-called blocking regulation that was drawn up in 1996 in response to the fallout from U.S. sanctions on Cuba, and on Libya and Iran.
The measure has never been used, but in essence it bans companies from respecting American sanctions where those sanctions might damage EU interests, notably trade and the movement of capital.
For the blocking regulation to be used now, it would have to be updated to include U.S. nuclear-related sanctions against Iran. This would take time, and runs the risk that any one of the 28 EU member countries could block the move.
The EU is also ready to allow the European Investment Bank to help companies invest in Iran. On top of that, the EU's energy commissioner is heading to Tehran for talks on boosting energy cooperation.