Analysts say Tehran needs tangible guarantees from Europe to protect businesses from being hit by American sanctions.

On May 15, the US Treasury Department announced it was imposing sanctions against Iran’s central bank governor and another senior bank official, accusing them of involvement in the transfer of millions of dollars on behalf of the Islamic Revolutionary Guard Corps to Hezbollah, and designating them “terrorists”.

The sanctions did not directly target Iran’s central bank. But because of US President Donald Trump’s decision to abandon the nuclear deal on May 8, certain transactions with the central bank, such as the purchase of US dollars by the Iranian government, would also be targeted by the United States.

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The following day, French oil giant Total said that unless it obtains a US Treasury sanctions waiver, it will pull out of a $2bn natural gas project in Iran by November. The world’s largest oil shipping container firm, Maersk of Denmark, said it would also end its operation in Iran.

Amid these developments, there were reports the US was putting pressure on Europe to cut the Iranian banking system off from the Swift network, thereby depriving Iran of access to the institution that facilitates export and import payments, among other international transactions.

Then on Monday, US Secretary of State Mike Pompeo said unless Iran complies with American demands, it will face “the strongest sanctions in history” and “unprecedented financial pressure”.

Despite the rhetoric, threats of “regime change” and the re-imposition of US sanctions, Iran experts predict Tehran will spend its diplomatic capital to try to preserve the 2015 nuclear deal. But it needs significant help from Europe to prevent the deal from collapsing.

Several companies said they would shut operations in Iran without US sanctions waivers [Al Jazeera]

Diako Hosseini, senior analyst at Tehran’s Center for Strategic Studies, a think-tank close to the Iranian government, told Al Jazeera if Iran secures sufficient guarantees from Europe, it “could decide to stay in the deal for geopolitical purposes”.

“The Europeans showed that they sincerely want to stand with the deal,” Hosseini said, though he conceded Tehran is aware of the European Union’s “legal and political limitations” to defend it.

In that regard, Iran “will have no choice but to recognise” the diplomatic hurdles and lower its expectations to a “realistic level” in ongoing talks with the Europeans, said Hosseini.

‘Sell some hope’

On Sunday, Iran’s Foreign Minister Javad Zarif was quoted as saying under the current circumstances, the EU’s political will “is not enough to preserve the nuclear deal”.

“The cascade of decisions by EU companies to end their activities in Iran makes things much more complicated,” Zarif said following his meeting in Tehran with the European Commissioner for energy and climate, Miguel Arias Canete.

Neda Monem, a journalist and editor based in Tehran, said while the political dynamics in the US have changed since Trump’s election victory, the leadership in Iran remains the same.

“In other words, the Iranian government that worked hard to make the deal, I’m quite certain, will continue defending it and act rationally to preserve it despite Trump’s whimsical decisions,” Monem told Al Jazeera.

But she also noted that “other internal forces” in Iran who opposed the deal from the beginning have now started challenging the Rouhani administration to withdraw from it.

“Which of these internal forces will eventually hold the upper hand remains to be seen,” she said.

Given domestic opposition and the slew of new US sanctions, Rouhani’s government now faces “real hard work” to stay in power and “sell some hope” to ordinary Iranians, while keeping the Iran deal afloat, Fateme Karimkhan, a correspondent for an Iranian news agency, told Al Jazeera.

Many Iranians said they have not benefited from the lifting of the nuclear sanctions [Al Jazeera]

Under the deal, also known as Joint Comprehensive Plan of Action (JCPOA) signed in Vienna in 2015, Iran scaled back its uranium enrichment programme and promised not to pursue nuclear weapons. In exchange, international sanctions were lifted, allowing it to sell its oil and gas worldwide.

However, major US sanctions are set to snap back within months following Trump’s decision to withdraw from the agreement.

Those secondary sanctions now threaten even foreign-owned firms operating in Iran. Trump had said those companies, many of them European, would be targeted if they continued to operate there.

Helping hand from Europe

Esfandyar Batmanghelidj, founder of the Iran-focused business website Bourse Bazaar, said what Tehran needs now are solid guarantees from Europe to prevent the deal from collapsing.

“The evidence is pretty clear that politically speaking, it would be nearly impossible for the Rouhani government to justify maintaining its commitments under the JCPOA, unless the economic side of the agreement is protected,” Batmanghelidj told Al Jazeera.

In the two weeks following Trump’s decision, there have been some steps taken by Europe to defend the deal, including the reactivation of the 1996 “blocking statute” that would shield European companies from being sanctioned by the US.

The European Union has also authorised the European Investment Bank to facilitate European companies’ investments in Iran.

Two other steps that should follow are the establishment of a “mechanism” allowing Iran’s central bank to “more easily transact with European central banks, and the repatriation of oil revenues from Europe to Iran,” Batmanghelidj said.

“I think it needs to be figured out very quickly because the oil revenues are so important for Iran’s government from a budgetary standpoint,” he said.

Europe should also keep Iranian banks’ access to the Swift network, allowing money transfers to continue without interference even after the US secondary sanctions take effect in the coming months, he said.

The US said unless Iran complies with its demands it would face ‘unprecedented’ sanctions [Al Jazeera]

Saeid Jafari, a foreign policy analyst and former editor of Tehran-based Khabar Online, said access to banks is one of the key demands.

“Iran needs to make sure companies can easily transfer money to be able to buy their needs, and to make sure that Iranian society is fully connected to the global banking system,” he told Al Jazeera.

‘Trump misreading Iranians’

Already, there have been reports of some Iranian bank accounts being closed in Georgia, apparently because of threats of US sanctions, Iran’s Mehr news agency reported, quoting Iran’s Monetary and Banking Research Institute.

Jafari also said Iranian reformists and moderates “prefer to stay in the deal”, but only if the EU can ensure the benefits of the JCPOA.

Europe could also build more trust by maintaining a certain amount of investment in Iran annually, and providing lower interest loans to Iran, said Hosseini.

It could also try to secure exemptions on sanctions for some petrochemical companies operating in Iran, he said.

“The EU has varying limitations, but still can do something to indicate that it is trustworthy. Everything depends on the Europeans’ diplomatic capability,” Hosseini said.

How far Europe will go to accommodate Iranian demands “is a million dollar question”, said Ellie Geranmayeh, senior policy fellow at the European Council on Foreign Relations.

“I think what we have seen right now is a very sincere attempt by the European countries and governments to stick to the nuclear deal, despite a huge amount of pressure by their US allies to essentially join in Trump’s plan in sabotaging the deal,” Geranmayeh told Al Jazeera.

If Europe is willing to say “enough is enough” to Trump, there are ways to protect European companies by securing waivers and exemptions for them, so they could continue doing “at least a limited degree of trade and investments with Iran”, she said.

The way Trump has responded to Iran indicates he is “essentially accepting the paradigm of regime change in the country”, said Geranmayeh.

Some have ruled out the North Korean model of direct talks between the US and Iran [Al Jazeera]

“The very fact that the president has undermined the agreement so heavily and extensively with this hard exit, I think it is a reflection that this presidency is not interested in a political or diplomatic discourse with Iran.”

She said the US strategy “towards maximum confrontation and maximum containment” with Iran would only further threaten the deal.

Geranmayeh also ruled out the North Korean model of direct talks in dealing with Iran, saying Trump is “fundamentally mistaken” in believing Pyongyang and Tehran would respond in the same manner to Washington’s bluster.

“If the president of the US is trying to get Iran back to the negotiating table, he has completely misread Iranian leadership, and he has misread the Iranian public opinion”.

Monem agreed, saying it is “highly doubtful” the two adversaries would engage in direct talks anytime soon.

“I’d say there is a higher probability of Iran turning, once again, to India and China to sustain its waning economy.”