As Brussels aims to circumnavigate US sanctions against EU companies doing business with Iran, former European Commission Vice President Guenter Verheugen told Eyes On Events that America still "has the bigger stick."
Verheugen told Eyes On Events's Sophie Shevardnadze on the SophieCo show that European companies are essentially backed into a corner when they consider the economic benefits they receive by doing business with the US, versus Iran.
"I’m afraid that the Americans have the bigger stick here,” said Verheugen. “If you were a European company or a German carmaker, for instance, and if you look at the figures, what kind of business you do in Iran, what kind of business you do in the United States, you have not much choice, and you will decide not to invest in Iran, you will continue to invest and make business in the US."
And when it comes to the idea that Europe could compensate any firms hit by US sanctions – a notion floated by French Economy Minister Bruno Le Maire on Sunday – Verheugen says that's just talk. "If the European Union really promises to compensate for all the losses, I can promise you, that goes far beyond the financial capacities of the European Union," he insisted.
"So I'm really afraid that the American policy of taking hostage other nations and companies can be successful in the end," he said. And, as tensions rise between the US and the EU, Verheugen says the situation could end badly.
"...We need to tell our American friends that until now, the EU-US axis was a guarantor for peace and stability, not only in Europe but in other regions as well,” he said. “If that axis disappears, we will have more tensions and conflicts, the world will come closer to the final conflict and nobody, even Mr. [US President Donald] Trump, can really want it."
The relationship between the two powers, according to the former European Commission vice president, needs to be redefined. "I wouldn't use the term enemy, but it's obvious that the partnership between the United States and the European Union is entering a new age," he said.
It's absolutely necessary, according to Verheugen, to prevent the US and Europe from being in "different camps," though he admits "it's going to be difficult."
Verheugen's comments come after Trump pulled out of the landmark Iran nuclear deal earlier this month, despite Washington's biggest allies – the UK, Germany, and France – urging him not to do so. The US has said it could impose sanctions on European companies doing business in Iran, which prompted the EU to announce it would use a blocking statute to protect its companies against such sanctions.
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