Brinkmanship continues to keep suspense alive even as Iran threatens retaliation

A month or so ago, when the Bolton-Pompeo gang was trying to apply what they called “maximum pressure” on Iran, Tehran decided to apply its own version of “maximum-pressure”. European participants of the JCPOA, popularly known as the Iranian Nuclear Deal, were dragging their feet on a special purpose vehicle meant to bypass unilateral sanctions imposed by the United States and the US was happy with a scenario where it was squeezing Iran economically without losing anything from it.

Tehran decided to act. After a series of events that brought the region on the verge of war, the US has started to see diminishing returns of its “maximum-pressure” tactic while Iran has stepped on the gas.

The night of June 30 brought the news that the Iranian government was waiting for. The European powers who were a party to the JCPOA operationalised the mechanism that will allow European and other companies to do business with Iran while avoiding the unilateral sanctions imposed by the US Treasury Department.

INSTEX exchange mechanism, as this is formally called, will basically create a fourth party, which will get paid by the companies to do trade with Iran. INSTEX will have no exposure to the US Dollar and thus will be able to bypass the sanctions that will be imposed on the third parties.

At the onset, INSTEX will be used for purchasing medicines, food items and other supplies but will be expanded later to include other things.

Sources in Brussels further informed this correspondent that another mechanism, where European powers will issue lines of credit to Iran that will be repaid by Tehran once a new government sympathetic to JCPOA comes back in the White House, is also under consideration.

There seems to be another issue as well where a breakthrough is slowly emerging. As per the terms of the JCPOA, Iran was allowed to stockpile 300 kilograms of enriched uranium and heavy water while exporting the excess. The recent US sanctions rendered this export impossible.

This would have forced Iran to either halt the enrichment or breach the terms of the Deal. The Bolton-Pompeo gang would then have used this Iranian “breaching” of the Deal, that they unilaterally pulled out from, as an excuse to attack Iran. News is coming from both Moscow as well as Brussels that a mechanism is being hurriedly put in place to avoid this scenario as well.

This means that after just a month of Iranian “maximum-pressure” tactic, things have started to fall in line. And this is not all. The tactic will continue. Iran will, in all likelihood, accelerate uranium enrichment to 3.7%, which is above the 3.67% allowed under the JCPOA.

This is a smart move. While enrichment at this level is sufficient to fulfil Nuclear Power demands, it is still substantially lower than what is required to give a military dimension to the programme. Iran is signalling that while it is still committed to its age-old promise of not building the bomb, it cannot allow itself to be blackmailed. And if this was not enough, a segment of the Iranian ruling class is also using the will-withdraw-from-NPT-altogether weather balloon to further crank-up the pressure.

This is not to say that things have gone back to being hunky-dory. Tehran will closely watch how effective the INSTEX mechanism is. The idea is to give Iran the economic incentive that was promised. At its current avatar, INSTEX mechanism has an eerie resemblance to the oil-for-food programme extended to Saddam Hussain’s Iraq. Needless to say, Tehran will want much more than that.

Only a pro-active initiative from the European powers can assure that. And if the US Treasury imposes further hurdle in the implementation of the INSTEX, European powers should be ready to impose counter-sanctions on the United States. The question is, are the European powers ready for such rapture in the trans-Atlantic alliance? Only time will tell. At this point, the creation of this mechanism itself is rapture with no parallels since at least the 1950’s.

Militarily, Trump’s decision to not to go for a “limited strike” on Iran following the downing of the US drone in Iranian waters was not because Trump was concerned about the loss of lives, as the western press wants you to believe. It was because Trump, and more importantly the Pentagon, knew that any “limited strike” will not remain limited and Iran will increase the stake substantially. The Islamic Republic knows that the actions by the US has galvanised the nation again, and buckling on the face of assault will erode its legitimacy in the eyes of the Iranians.