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How Europe Can Pressure Iran

[Wall Street Journal] Patrick Clawson and Michael Jacobson - The U.S. ratcheted up the financial pressure against Tehran last week, unilaterally slapping sanctions on Iran's powerful Islamic Revolutionary Guard Corp and three state-owned banks. Realizing the leverage that American financial markets give Washington, senior U.S. Treasury officials have been telling global financial institutions in the last couple of years that doing business with Iran could do great harm to their reputation and complicate their access to the U.S. market. There are limits to this unilateral strategy, though. Companies and financial institutions that do not operate in the U.S. may be willing to ignore Washington's warnings. But being cut off from New York and the world's other leading financial capital, London, is a risk not too many of these firms would be willing to take. If the British government were to send a similarly strong warning to banks, it could dramatically increase the financial pressure on Iran. A combined initiative by the U.S. and individual European countries to press Iran may strengthen the hand of those in Tehran arguing for accommodation. It would also be a good way to show China, Russia and laggard European governments that with or without them, action will be taken against Iran. Mr. Clawson is the Washington Institute for Near East Policy's deputy director for research. Mr. Jacobson is a senior fellow in the institute's Stein Program on Terrorism, Intelligence, and Policy.
2007-11-02 01:00:00
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