Weathering the Geopolitical Storms: The Ever-elusive Success of EU Policy towards Iran

ABSTRACT

Between 2003 and 2022, European Union policy towards Iran was the result of continuous course corrections made by EU institutions and member states to dodge internal disagreements and navigate the agitated waters of a region – the Middle East and the Gulf – mired in multipolar competition and beset by fragmented governance arrangements. A comprehensive review of official documents, relevant literature and interviews conducted with Iranian and European officials and experts demonstrates that a combination of prioritisation, compartmentalisation and multilateralisation kept EU foreign and security policy towards Iran on a fairly proactive and coherent course for almost twenty years. However, the forces unleashed by the United States’ withdrawal from the 2015 nuclear deal and more recently by Iran’s collusion in Russia’s war on Ukraine as well as the turmoil inside the Islamic Republic itself put the limits of the EU’s capacity to mitigate the effects of geopolitical rivalries, Middle Eastern fragmentation and intra-EU contestation on its Iran policy in sharp relief.

KEYWORDS:

• EU foreign and security policy
• multipolar competition
• Middle East geopolitics
• EU-Iran relations
• nuclear non-proliferation

Between 2003 and 2022, the Islamic Republic of Iran (IRI) was a top priority in the foreign policy agenda of the European Union (EU). It absorbed the time and energy of senior diplomats, ministers and even political leaders of large member states such as France and Germany as well as the United Kingdom (UK), before and after it left the Union in early 2020. Likewise, no other third country arguably saw as much personal investment by successive High Representatives for Foreign Affairs and Security Policy and Vice-Presidents of the Commission (HRVP).¹

Iran captured so much EU attention because of its controversial nuclear programme, ostensibly peaceful in nature but generally believed to serve military purposes (Gaietta 2015). The ‘E3’ of France, Germany and the UK, which together with the High Representative formed the so-called E3/EU, engaged in the diplomatic process that culminated in the 2015 Joint Comprehensive Plan of Action (JCPOA), the Iran nuclear deal.

Signed by the E3, China, Russia, the United States (US) and Iran itself, the JCPOA curtailed Iran’s ability to acquire a nuclear weapons capacity in exchange for extensive sanctions relief (E3/EU + 3 and Iran 2015). Driven by a normative interest in nuclear non-proliferation and concerns about regional security, the E3/EU remained committed to the deal after the US unilaterally withdrew from it in 2018. The E3/EU’s set of interests shifted only in early autumn 2022, when the Iranian government’s crackdown on popular protests and military assistance to Russia in its war against Ukraine brought human rights and European security to the fore.

Throughout the 2003-22 period, EU policy towards Iran was the result of continuous course corrections made by EU institutions and member states to dodge internal disagreements and navigate the agitated waters of a region – the Middle East and the Gulf – mired in multipolar competition and beset by fragmented governance arrangements. This article maps the constraining factors on EU policy towards Iran before charting its evolution. On the basis of a review of official documents, relevant literature and 11 interviews conducted with European and Iranian officials and advisers to policymakers,² the article finds that a combination of prioritisation, compartmentalisation and multilateralisation kept EU foreign and security policy towards Iran on a fairly proactive and coherent course for almost twenty years. While always a secondary actor to the US and Iran itself, Europe played an essential supporting role in managing the nuclear dispute until the nefarious consequences of the US withdrawal from the JCPOA in 2018 emerged in full.

The forces unleashed by the US decision, coupled more recently with Iran’s collusion in Russia’s war on Ukraine and the domestic turmoil inside the IRI, put the limits of the EU’s capacity to mitigate the effects of geopolitical rivalries, Middle Eastern fragmentation and intra-EU contestation on its Iran policy in sharp relief. The article deconstructs these issues and offers a sober assessment of the reduced potential of EU Iran policy.

A conceptual framework for assessing EU policy towards Iran

EU policy towards Iran has attracted considerable scholarly attention since the nuclear issue started to grab the headlines back in 2003. Early studies looked at the E3/EU’s initiative on the nuclear issue as an important test for the EU’s non-proliferation policy (Kile 2005) and commitment to multilateralism (Harnisch 2007), human rights (Kienzle 2012) and transatlantic relations (Ërastö 2011). The analysis conducted after the nuclear deal was concluded in 2015 elaborated on Europe’s contribution to the whole process (Cronberg 2017), with a special focus on the policy-making capacity of the actors that drove EU policy, namely the E3/EU ‘lead group’ (Alcaro 2018a) and the HRVP (Bassiri Tabrizi and Kienzle 2020). The transatlantic dimension of EU policy towards Iran was once again in the spotlight after the US withdrawal from the deal (Alcaro 2021).

This article adds to this body of literature by adopting a novel framework to provide insights into the EU’s Iran policy. It assumes EU foreign and security policy (EUFSP) – a broad concept that encompasses the national foreign policies of member states (here, the E3)³ in so far as they work in sync with policy goals set at the EU level – to play out in an international and domestic context increasingly shaped by interstate competition, the fragmentation of regions and the politicisation, if not outright contestation, of foreign policy by EU domestic actors. While none of these factors are new, the fact that they have grown in intensity and increasingly interplay with one another is a more recent development. In isolation and especially in combination, they often constrain the coherence of EUFSP (Alcaro and Dijkstra 2024, this Special Issue).

To illustrate, multipolar competition entails a multiplicity of power centres espousing diverging understandings of what order – at the global but also regional level – should look like (Herd 2010; Kupchan 2012; Bolt and Cross 2018). Global and regional powers consequently construe international crises as arenas of confrontation rather than transnational problems to address through multilateral institutions (Mead 2014; Alcaro 2018b). Multipolar competition compels EU member states to factor in their relationship with external powers when they handle a crisis or conflict, which gives such powers an opening to influence EU decision-making (Dandashly et al. 2021). Regional fragmentation involves the erosion of state capacity to set and enforce laws (Börzel and Risse 2021). When multilateral governance mechanisms are absent or struggle to function, regional states are more likely to be drawn into conflicts, as are global powers, with the frequent result of blurring the distinction between civil conflict and proxy war (Bakke et al. 2012; Gallagher Cunningham 2016). EU member states struggle to meet the requirements for effectively addressing fragmented regions, such as conflict analysis, integration of different policy tools, coordination between EU institutions and member states, as well as between the EU and third actors (Juncos and Blockmans 2018: Levallois 2021). Finally, internal contestation refers to the process by which EU governments question established EU policies because they have domestic incentives not to invest political capital in EUFSP (Orenstein and Kelemen 2016; Lovato 2021).

The potential for any of these factors to disrupt EU Iran policy was considerable from the start. The Union could have been paralysed by internal disagreements, overwhelmed by the sheer number of conflicts in which Iran is involved or inhibited by competition dynamics with other players, including the US. Yet, for about twenty years, EU member states developed a fairly proactive Iran policy. It was only when the interplay between multipolar competition, regional fragmentation and intra-EU contestation intensified following the US withdrawal from the nuclear deal, that EU policy gradually ran out of steam.

This article dissects the measures that EU member states implemented to mitigate the effects of those constraints (Alcaro and Dijkstra 2024, this Special Issue). The most visible of such measures pertain to an ‘institutional’ typology of mitigation, that is, the (informal) delegation of responsibilities to EU institutions, a restricted group of EU countries or a combination of the two (in the Iran case, the E3/EU format). They also extend to the ‘functional’ mitigation typology, whereby EU policy focuses on a limited number of issues or even a single issue (in the Iran case, the nuclear dispute), as well as the ‘diplomatic-coalitional’ typology, according to which EU actors engage with flexible coalitions of like-minded partners and multilateral institutions to increase their leverage (in the Iran case: China, Russia, the US as well as the United Nations Security Council [UNSC]).

Past studies (Alcaro 2018a) have ascertained that the formation of the E3/EU facilitated the formulation and implementation of EU policy, but have not investigated how the E3/EU used the nuclear issue to drive EU policy forward in a domestic and international context characterised by divisions, fragmentation and interstate competition. The article’s conceptual framework sheds light on the ultimate sources of the many and diverse challenges encountered by the E3/EU. It shows that the coherence and consequently impact potential of the EU Iran policy was always a function of the E3/EU’s ability to deal with the challenges emanating from the three contextual challenges separately. Indeed, the trajectory of EUFSP towards Iran was defined, first, by the E3/EU’s mitigation of multipolar (including transatlantic) tensions, regional conflict dynamics and internal contestation, and then by their failure to do so once the interaction between the three factors intensified following the US’s withdrawal from the JCPOA.

In analysing how EU mitigation strategies performed over time, this article contributes to the studies on EU-Iran relations as well as to the wider literature on EUFSP’s evolution amidst great power politics and its implications for regional and domestic politics.

The context of EU policy towards Iran

Multipolar competition

The factor that weighed the heaviest on EUFSP towards Iran was the ideological and geopolitical confrontation between Iran and the US (Pollack 2005). Of all the US presidents since 1979, only Barack Obama (2009-17) was open to recalibrating US-Iran relations along a non-confrontational pattern (Obama 2010). Beyond Obama, antagonism was the prevailing theme of US discourse on Iran.⁴ Likewise, Iranian attempts to seek détente with the US – notably by Presidents Mohammed Khatami (1997-2005) and Hassan Rouhani (2013-21) – were resisted by the Islamic Republic’s most conservative power centres, such as Supreme Leader Ali Khamenei (in power since 1989) and the Islamic Revolutionary Guards Corps (IRGC), the overly influential military organisation responsible (amongst others) for Iran’s regional policy (Parsi 2017).

Iran’s hostility with Israel mirrored its relations with the US. Iranian leaders view Israel – which they refuse to recognise – as the (not so) hidden force behind US policy in the region (Kaye et al. 2011, 55-80). Israel, for its part, considers Iran the greatest threat to its security (19-54). It therefore championed an uncompromising approach, issued military threats and engaged in sabotage campaigns of Iran’s nuclear plans, including through assassinations of Iranian nuclear scientists (Leslie 2022).

Saudi Arabia and the United Arab Emirates (UAE) claim that the Islamic Republic has imbued Iran’s historical pursuit of regional hegemony with the revolutionary flavour of Shia fundamentalism, thus fomenting interconfessional divisions across the region and challenging the legitimacy of dynastic rule in Arab monarchies (Warnaar et al. 2016). The antagonism with Iran was arguably the single most important driver for the normalisation agreements between Israel and the UAE (plus a handful of other Arab countries) known as the Abraham Accords. Notably, however, neither the Saudis nor the UAE were opposed to diplomacy and both countries took steps towards normalising ties with the IRI after long hiatuses.

Not all of Iran’s relations are purely antagonistic. Turkey has pursued working arrangements with Tehran, namely in Syria where the two countries support opposite sides but share an interest in stability (Charountaki 2018). Syria was a main platform also for Russia’s engagement with Iran, which has grown in depth and scope in parallel to the deterioration of Moscow’s relations with the West. A similar trajectory was observable in China’s ties with Iran. Chinese oil purchases kept the Iranian economy afloat amidst draconian US sanctions. However, there were limits to China’s and Russia’s partnerships with Iran. Both had good ties with Israel and the Arab Gulf states and – just as Turkey did – had their own concerns about an Iranian nuclear bomb, although they were also wary of solutions to the issue that may result in a West-Iran rapprochement (Tabatabai and Esfandiari 2021).

Completing the picture of competitive dynamics revolving around Iran was the transatlantic relationship itself. The EU went through periods of severe divergences with the US over how to approach Iran (Alcaro 2018a, 181-202). In fact, US readiness to disregard European concerns about Iran and even punish the EU (Alcaro 2021) with extraterritorial sanctions – a trend painfully displayed during the presidency of Donald Trump (2017-21) – contributed to fuelling an ambition to reduce EU vulnerability to pressure from across the Atlantic in the years prior to 2022.

Regional fragmentation

The Middle East has experienced severe turmoil in the 21st century. The US-led invasion of Iraq in 2003 exacerbated sectarian and ethnic violence and indirectly caused a proliferation of extremist Islamist groups. The region was further shaken by the great Arab uprisings of 2011, which descended into civil wars in Libya, Syria and Yemen (Aras and Yorulmazlar 2016). While antagonism with Iran was often a central aspect of conflict dynamics in Iraq, Lebanon, Syria, Palestine and Yemen, it was not the only one. An example was the parallel campaigns that Iran and a US-led coalition waged against the Islamic State in Syria and Iraq from 2014.

However, the intermittent overlay of (mostly tactical) goals was not enough for the establishment of inclusive regional governance arrangements. On the contrary, whatever regional mechanism existed was either partial – the Astana framework for Syria, for instance, that included just Iran, Russia and Turkey – or aimed to deepen strategic alignments rather than regional governance, as is the case of the Abraham Accords. Proposals for a regional architecture, including by Iran, did little to dent the wall of mutual mistrust (Dessì and Colombo 2020).

Intra-EU contestation

While until recently the EU refrained from characterising relations with Iran in antagonistic terms (European Council 2019), member states’ diverging priorities always had the potential to degrade the coherence of EUFSP towards the Islamic Republic.

Supporters of nuclear non-proliferation, spread relatively evenly across EU countries, advocated giving priority to preventing an Iranian nuclear breakout throughout the whole period covered by this article (Kile 2005; Alcaro 2018a, 93 and ff.). Business operators – in the beginning energy and shipping companies, later on mid-size exporters – in such countries as Germany, Italy or Greece, aimed to expand trade with Iran (Onderco 2015), though their hopes faded after the re-imposition of US extraterritorial sanctions. Constituencies in most European states (especially Germany, the UK and Poland) were receptive to pressure from the US even during periods of transatlantic disagreements (Cronberg 2017), paid heed to Israel’s security perceptions (especially in Germany; see Küntzel [2014]) and showed a growing interest in expanding economic and military ties with Saudi Arabia and the UAE (in particular France; see Makinski [2021]). In 2022, following the public uproar about the repression of protesters demanding women’s rights and political change, as well as Russia’s use of Iranian-made drones to hit civilian targets in Ukraine, regime change proponents in the Iranian diaspora gained visibility and influence, especially in Berlin and Paris.⁵

Indeed, the context of EUFSP towards Iran, summarised in Table 1, was complex and challenging. The following sections dissect the measures EU member states took to adapt.

Table 1. Constraining factors on EUFSP towards Iran.

EUFSP constraint	Operationalisation	Explanation
Multipolar competition	Scope and nature of competition: both wide and narrow, zero-sum and limited	US-Iran competition (wide, mostly zero-sum) Israel-Iran competition (wide, zero-sum) Saudi-Iran competition (wide, mostly zero-sum) UAE-Iran competition (narrow, mostly zero-sum) Turkey-Iran competition (narrow, limited) West-Russia competition on Iran (narrow, limited) West-China competition on Iran (narrow, limited)
Regional fragmentation	Level of fragmentation: sub-national, state and regional	Limited statehood in Lebanon, Iraq, Syria, Yemen Non-existence of comprehensive regional governance architecture
	Phase of fragmentation: conflict prevention ongoing conflict post-conflict	Conflict prevention (Iran) Ongoing conflict (Palestine, Syria, Yemen) Post-conflict (Lebanon, Iraq)
Intra-EU contestation	Contesting actors: governments and domestic actors	Non-proliferation champions (all EU countries) Economic operators (esp. Germany, Italy, Greece) Preference accorded to relations with US (most EU countries) Need to defend Israel (several EU states, especially Germany) Interest in economic-military ties with Saudi Arabia, UAE (especially France) Need to confront Russia (most EU countries) Human rights advocacy (most EU states) Iranian diaspora campaigns (France, Germany)
	Object of contestation: overall relationship with Iran	Selective and conditional engagement with Iran vs opposition to Islamic Republic

EU policy towards Iran: strategy and execution

Underlying EUFSP towards Iran was the European concern that an Iranian nuclear bomb would gravely diminish the authority of the Nuclear Non-Proliferation Treaty (NPT), which bars Iran from acquiring a nuclear explosive device. Even a nuclear-capable Iran – namely an Iran in possession of the know-how and industrial capacity to produce a nuclear arsenal – could have engendered an irresistible temptation to emulation in Saudi Arabia and other neighbours (all non-nuclear parties to the NPT with the exception of Israel). The alternative, but equally troubling, scenario to a nuclear arms race in the Gulf was a US-Israeli military action aimed at stopping or slowing down Iran’s nuclear progress. With Iran and its allies expected to retaliate, a regional conflict was not a far-fetched prospect. This was the backdrop against which the E3/EU first reached out to Iran in 2003.

The strategy behind EU Iran policy

For twenty years, EU member states found a point of equilibrium between the different factors affecting their decisions on Iran. They relied on various types of mitigation measures to reduce the negative effects of the constraints highlighted in the previous section. The unorthodox E3/EU format, an ‘institutional’ mitigation measure whereby EU policy is entrusted to a small group of EU countries, showed both proactiveness and adaptability (Alcaro 2018a). The E3/EU could do that because they narrowed down the remit of EU policy to a single issue – the nuclear dispute (prioritisation) – and insulated it from other issues of concern (compartmentalisation). Critical was also the ability to frame the problem in normative terms and build international coalitions within multilateral frameworks acceptable to the US (multilateralisation).

Prioritisation originated from the geopolitical magnitude of the nuclear dispute itself. Compartmentalisation, which involved dealing with Iran’s human rights record, expanding ballistic arsenal and problematic regional policies on separate diplomatic tracks, was largely a consequence of the nuclear dispute becoming a drawn-out process unfolding over two decades, during which tensions with Iran grew steadily. Multilateralisation was always present due to the European emphasis on Iran’s obligation to cooperate with the International Atomic Energy Agency (IAEA), the UN nuclear watchdog. Still, it became more prominent after the E3/EU managed to anchor nuclear diplomacy with Iran to the UNSC through the creation of an ad hoc format that included all permanent UNSC members (plus Germany and the EU itself), generally known as the P5 + 1 but officially called the E3/EU + 3 (in acknowledgement of the European origin of the initiative). This outcome did not reflect a pre-determined design by the E3/EU but rather a reactive adaptation to the contextual factors outlined in the previous section.

The execution of EU policy towards Iran

Between 2003 and 2005 the E3, joined in late 2004 by HR Javier Solana (in office 1999-2009) in the E3/EU format, negotiated with Iran independently (Kile 2005; International Crisis Group 2006). Though eventually unsuccessful, the E3/EU’s initiative erected a firewall against any unintended escalation by filling the dangerous diplomatic vacuum created by the refusal of US President George W. Bush (2001-9) to engage in nuclear diplomacy with Iran. The E3/EU’s effort was also instrumental in creating common ground with other UNSC permanent members, who joined the Europeans in the enlarged E3/EU + 3 format in January 2006.

Diplomacy nonetheless struggled to take off even after the more flexible Obama replaced Bush as US president in 2009. Under hard-line President Mahmoud Ahmadinejad (2005-13), Iran clashed with the US in Iraq, cracked down on demonstrators contesting Ahmadinejad’s re-election in 2009 and steadily advanced its nuclear activities, eventually mastering the capacity to enrich uranium, the most sensitive part of a nuclear programme because of its potential military use.⁶ In response, the E3 successfully tabled a series of UNSC resolutions that imposed incremental sanctions on Iran. In 2010-12 the EU followed the US by expanding its own sanctions regime, targeting Iran’s export of hydrocarbons and access to international financial markets (International Crisis Group 2013).

Economic pressure eventually persuaded Iran to change tack. Secret US-Iranian talks in Oman in 2013 kickstarted E3/EU + 3-Iran nuclear engagement again. The E3/EU contributed significantly to the negotiation, where HRVPs Catherine Ashton (2009-14) and Federica Mogherini (2014-19) stood out in their capacity as official coordinators of the E3/EU + 3 format. The JCPOA was eventually concluded in July 2015 and given international authority through its incorporation into UNSC Resolution 2231 (UNSC 2015). The deal set severe, though temporary, limits on Iran’s nuclear activities and greatly expanded the IAEA’s inspection authority, while providing Iran with extensive sanctions relief in return (E3/EU + 3 and Iran 2015). HR Mogherini construed it as a step towards a more constructive relationship between the EU and Iran (Mogherini and Zarif 2016).

It was not to be, however. After US President Trump abandoned the JCPOA in May 2018, the E3/EU struggled to defend EU companies and banks from the extraterritorial reach of the re-imposed US ‘secondary’ sanctions (Stoll et al. 2020). Frustrated with the EU’s failures to guarantee legitimate EU-Iran trade, from May 2019 onward the Iranian government progressively reduced its compliance with the JCPOA. Meanwhile, the IRGC engaged in a series of escalatory incidents in summer 2019, which included sabotage of oil shipments in the Gulf of Oman, a tit-for-tat with the US in downing drones and an alleged missile attack against Saudi oil fields. The conditions for the E3/EU to keep Iran engaged shrank further when the Iranian government cracked down on the widespread protests that followed the lifting of energy subsidies (itself an indirect consequence of US sanctions) in autumn 2019. Tensions peaked in early 2020 after Trump ordered the assassination in Iraq of IRGC General Qassem Soleimani, the main strategist behind Iran’s regional policies (International Crisis Group 2020a).

European hopes for a resolution of the crisis rose again after Trump lost the presidency to Joe Biden. Talks resumed in April 2021 and continued intermittently for over a year in an atmosphere fraught with animosity and mistrust. Iran stepped up enrichment activities and reduced IAEA access to its nuclear facilities,⁷ especially after the conservative Ibrahim Raisi replaced the pragmatist Rouhani as president in summer 2021. HRVP Josep Borrell (in office since 2019) and his aide Enrique Mora, forced into a literal exercise in shuttle diplomacy by Iran’s refusal to meet US officials, eventually facilitated the production of a text on the reactivation of the JCPOA that the E3/EU saw as definitive.⁸ Yet, the Iranian government never closed the file, repeatedly putting forward demands for stronger guarantees in case the US withdrew from the deal for a second time and for the IAEA to close an investigation on unaccounted nuclear particles detected in four facilities (the so-called ‘safeguard probe’) (Borrell 2022a). The talks fell apart in September 2022 with the parties blaming each other’s excessive rigidity (International Crisis Group 2022).

EU-Iran relations further deteriorated after Iran’s authorities brutally repressed anti-regime demonstrations and Russia used Iranian-provided drones to hit civilian targets in Ukraine (Rozen 2022). With a wave of public antipathy towards the Iranian leadership sweeping through Europe, EU member states condemned Iran and sanctioned Iranian officials (Borrell 2022b; Council of the EU 2022b; 2022c). Germany downgraded its bilateral relationship with Iran (Baerbock 2022) and declared that the reactivation of the JCPOA was no longer a priority, a line borrowed from Biden Administration officials (Reuters 2022a), although nuclear diplomacy with Tehran was never called off (Reuters 2022b).⁹

By the end of 2022, human rights and European security seemed to have become more powerful factors shaping EU Iran policy than non-proliferation and Middle Eastern stability.¹⁰ EUFSP was therefore in a state of reconfiguration, as prioritisation, compartmentalisation and multilateralisation had seemingly run their course. In the next sections, the article delves into this three-pronged strategy, highlighting its strengths before explaining its demise.

The strengths of EU mitigation strategies

Between 2003 and 2022, the combination of prioritisation, compartmentalisation and multilateralisation kept EUFSP towards Iran on track (Table 2). In spite of recurring internal divergences and an exceedingly difficult regional and international environment, the EU and its member states managed to define, shape and adapt a mostly proactive, and relatively effective, Iran policy. How exactly could they do so?

Mitigating the effects of intra-EU contestation

Prioritisation was essential in mitigating internal contestation. EU member states set a simple and measurable outcome – a negotiated guarantee against an Iranian nuclear weapons capacity – that they could all support despite the varying degree of importance they attached to trade and investment with Iran (on one side) or confronting the IRI for its regional policies and human rights record (on the other side). The fact that the nuclear issue came to occupy almost the full spectrum of the EU-Iran agenda gave considerable leeway to the EU actors directly involved in the nuclear talks, namely the E3 (British commitment to the effort did not diminish after Brexit). The E3/EU format was not universally popular in the EU given that the E3 were calling the shots, but was never seriously challenged, also thanks to the involvement of the HRVP.¹¹

The E3 and the HRVP could thus drive intra-EU consensus on Iran (Alcaro 2018a, 93 and ff.). Sanctions are a case in point. In the early 2010s, the E3 and HR persuaded other member states to cut trade and energy ties with Iran because they could credibly argue that the prospect of an Iranian bomb or of a US-Israeli attack to prevent it was likely (Fabius 2016). Prioritisation of the nuclear issue helped also in other ways. In spring 2009, for instance, the Italian foreign minister cancelled a visit to Tehran – ostensibly to discuss Afghanistan-related matters – due to the E3’s insistence that high-level contacts with Iran would be limited to HR Solana and the nuclear file (Dinmore 2009).

A corollary of prioritisation, compartmentalisation also mitigated the effects of intra-EU disagreements. The UK established no link between nuclear diplomacy and its recurring clashes with Tehran, such as Iran’s temporary capture of a handful of British sailors in 2007 or the seizure of a British vessel in the Strait of Hormuz in 2019 in retaliation for the interception of an Iranian tanker by British forces off the coast of Gibraltar (Harding et al. 2007; Wolgelenter 2019). France and Denmark agreed to respond to alleged Iranian plans to strike dissidents on their soil in 2018 through limited EU sanctions that could not be interpreted as violations of the JCPOA (Reuters 2019).¹² Another notable example of compartmentalisation was the separate handling of the cases of European nationals detained in Iran on spurious charges.

Multilateralisation was another inhibitor of intra-EU contestation. First, it indirectly preserved the E3 and the HRVP’s capacity to articulate a proactive policy because it strengthened their legitimacy (Bassiri Tabrizi and Kienzle 2020). With global powers like China, Russia and the US recognising the E3 as crisis management partners, and with the HRVP elevated to chief interlocutor of the Iranians on behalf of all E3 + 3, the opportunities for other EU member states to challenge the E3 format shrank (Alcaro 2018a, 172-4).

Second, the formation of the E3/EU + 3 ensured that the Security Council endorsed their choices. Between 2006 and 2010, E3/EU + 3’s demands on Iran for uranium enrichment suspension and greater cooperation with the IAEA were codified in six legally binding UNSC Resolutions, four of which contained sanctions (UNSC 2006a; 2006b; 2007; 2008a; 2008b; 2010).¹³ With coercion formally mandated by the UN, the E3 acquired the legal basis to overcome the lingering resistance inside the EU for the expanded sanctions regime that became operational between July 2010 and 2012 (Council of the EU 2007; 2010a; 2010b; 2011; 2012).

Third, the multilateral and UN-sanctioned nature of the JCPOA provided EU countries with a compelling reason to continue supporting the agreement after the US withdrew. For instance, in January 2019 Poland agreed to host a US-organised international conference on the Middle East that was widely perceived as an attempt to muster support for Trump’s policy of maximum pressure on Iran (Smolenski and Virginia Pietromarchi 2019). However, the conference failed on this account, as neither Poland nor any other EU country could be persuaded to give up on the JCPOA.

Mitigating the effects of Middle Eastern fragmentation

Resorting to compartmentalisation, the EU and its member states refrained from making progress in the nuclear talks conditional on concessions by Iran on other issues of concern. The UK, for example, agreed to the nuclear talks even though its troops deployed in Iraq faced Iran-backed armed groups. Iran’s influence on Baghdad remained a matter of contention in the years thereafter (Ellner 2013). So was Syria, where Iran sent militias, arms and military advisors in support of President Bashar al-Assad, whose regime the EU had put under sanctions (Council of the EU 2022a).

After 2015 tensions extended to Yemen. The Europeans, especially France and the UK, condemned Iran’s support for the Houthi rebels, themselves the target of an inconclusive Saudi-UAE military campaign (Middle East Eye 2020). Maritime security became a concern after Iran started to threaten safe passage through the Gulf of Oman. France and eight other European countries¹⁴ opted to establish a separate maritime surveillance naval force in the Strait of Hormuz rather than joining a similar US-led mission (Brzozowski 2020).

Meanwhile, upon the initiative of HR Mogherini, in 2018-19 the E3 engaged the Iranians in regional talks in a new E4/EU format that also included Italy. The rationale of these political consultations, which focused mostly on Yemen, was to keep communication channels with Tehran open during a phase of acute US-Iranian confrontation under Trump (Alcaro 2019). For the Europeans, putting some distance from the US was necessary for the compartmentalisation approach to keep working, as Trump was opposed to handling the nuclear dispute separately from regional issues.

Mitigating the effects of multipolar competition

The E3 were always aware that no nuclear arrangement could endure without support from the US, Iran’s most powerful rival. Consequently, they relentlessly pursued the facilitation of US-Iran nuclear diplomacy (Harnisch 2019; Alcaro 2021), with multilateralisation central to their efforts.

President Bush had agreed on the creation of the E3/EU + 3 in 2006 to eventually get UNSC support for his tougher approach to Iran. But UNSC involvement meant that the US government had accepted the nuclear dispute with Iran being framed in normative rather than geopolitical terms. Multilateralisation greatly reduced the constraints imposed on the EU’s Iran policy by the US-Iranian rivalry because it established a normative framework to which both Washington and Tehran could relate without prejudice to their lingering hostility.

The UNSC-sanctioned nature of the deal also contributed to Trump’s failure to win any adepts in the EU for his maximum pressure policy (which was forced upon EU countries by way of extraterritorial sanctions). In addition, the E3 frustrated a US attempt in summer 2020 to re-impose UN sanctions on Iran because they could argue that the US withdrawal from the JCPOA had deprived it of the right to activate a special mechanism included in UNSC Resolution 2231 that would have “snapped back” all UN restrictive measures (International Crisis Group 2020b). After Biden re-committed to nuclear diplomacy, US officials could use the E3/EU + 2 framework, which had remained in place after the US withdrawal, to negotiate with Iran – albeit indirectly.

Multilateralisation extended its mitigating effect to EU and US competition with China and Russia too. Due to their early association with the negotiation team, Moscow and Beijing were disincentivised to act as spoilers of a Western-Iranian arrangement over the nuclear issue. China’s desire to purchase Iranian oil was arguably the most important factor behind Iran’s decision not to quit the deal after the US pull-out, which coincided with the worsening of US-China relations under Trump (Singleton 2022). For its part, Russia was a proactive diplomatic force in the 2013-15 JCPOA negotiation in spite of the major rift with the US and EU over the annexation of Crimea in 2014 (Azizi 2021). Russia remained cooperative until February 2022, when its large-scale invasion of Ukraine compelled the US and Europe to retaliate with draconian sanctions. An initial attempt to link the reactivation of the JCPOA to a relaxation of Western sanctions failed, but Russia became broadly unsupportive (Notte 2022). The limits of multilateralisation could no longer be papered over.

Table 2. Strengths of mitigation strategies.

Strategy	Mitigation of intra-EU divisions	Mitigation of Middle Eastern fragmentation	Mitigation of multipolar competition
Prioritisation	Superseded any disagree-ment that emanated from national interests Allowed for proactive policy driven and controlled by E3/EU group
Compartmentalisation	Allowed individual EU states to handle bilateral tensions without prejudice to the E3/EU’s nuclear diplomacy	Allowed EU member states not to make progress on the nuclear talks conditional on arrangements with Iran on regional conflicts
Multilateralisation	Strengthened E3 leadership on Iran Provided legal basis for EU sanctions on Iran, thus neutering diverging views of individual EU member states Ensured EU-wide support for the JCPOA after US pull-out		Contributed decisively to facilitating US-Iranian nuclear diplomacy Helped E3/EU sustain transatlantic disagreements Gave Russia and China ownership of nuclear talks, sheltering them from competition between the West and Russia/China

The limits of EU mitigation strategies

In spite of sustained diplomatic efforts, by early 2023 the EU’s ultimate goal – a working nuclear agreement – remained elusive. In fact, Iran was now closer than ever to a nuclear weapon capacity, having amassed uranium (enriched up to 60 per cent, just short of the 90 per cent weapon-grade threshold). Meanwhile, European ability to influence Iran’s choices on other matters, from regional conflicts to domestic issues, had further diminished. The reason lay in the forces unleashed by the US withdrawal from the JCPOA in 2018. The latter caused an upsurge of geopolitical competition between the US (and its regional allies) and Iran, but also between the US and the EU, which was not just ignored but threatened with extraterritorial sanctions.

Increased confrontation between Iran and the US (and Israel) resulted in more regional insecurity following Iran’s retaliatory actions in Iraq, the Gulf and against Saudi Arabia. Furthermore, it gave Iran’s leadership a powerful incentive to restart nuclear activities prohibited under the JCPOA and curtail the IAEA’s access to its nuclear facilities. The transatlantic misalignment put EU member states on a collision course with Washington and therefore increased the political costs of delivering the economic benefits enshrined in the JCPOA to Iran. In other words, the interplay between geopolitical competition, Middle Eastern conflicts and intra-EU disagreements intensified because of the US withdrawal. The EU mitigation strategies gradually frayed under the combined weight of such constraints, with all three components progressively losing their edge (Table 3).

The limits of multilateralisation

The US withdrawal from the JCPOA, technically a major violation of UNSC Resolution 2231, indicated that the US did not feel constrained by international law, multilateral institutions and alliance bonds. With Trump subordinating the nuclear issue to the US-Iranian geopolitical contest, the Europeans lost a powerful instrument to influence US choices – and, in time, Iran’s too. Neither the JCPOA nor UNSC Resolution 2231 included legal devices to sanction non-compliance from any other party than Iran itself. As argued above, multilateralisation was not rendered wholly ineffective because it retained its legitimacy-generating power, but it could only serve as a damage limitation tactic.

After the US withdrawal, the EU reactivated a 1996 piece of legislation – the Blocking Regulation – that made it illegal for EU companies to comply with extraterritorial sanctions. Yet, most EU banks and companies were unwilling to risk potentially massive penalties on their US activities and left the Iranian economy in droves. EU-Iran trade collapsed to 4.5 billion euros in 2021, down from over 20 billion in 2017 (it had been over 27 billion at its peak in 2011).¹⁵ In 2019, the E3 (later joined by five other EU countries and Norway)¹⁶ created the Instrument in Support of Trade Exchanges (INSTEX), an innovative barter system devised to insulate EU firms from US regulators. However, this notable effort delivered no results, as the facility operated just a single transaction. Adding insult to injury, INSTEX failed in spite of the fact that it was initially meant to facilitate trade in goods not sanctioned by the US, such as food, medicines and medical equipment. INSTEX was unceremoniously shut down in early 2023 (Batmanghelidj 2023).

With Trump in the White House, the multilateralisation’s moderating effects on US-Iranian rivalry and transatlantic tensions had vanished. Despite immense frustration, EU member states could not bring themselves to pursue retaliation against the US (Geranmayeh and Lafont Rapnouil 2019). In fact, the E3 avoided confronting the US for its decision to ditch the JCPOA, which they “regretted” but never condemned (Macron et al. 2018). They insisted that transatlantic differences were more about tactics than objectives. The E3 also offered a muted reaction to the assassination of Soleimani, in spite of it being a flagrant violation of international law (Macron et al. 2020). Meanwhile, the E3 reacted to Iran’s incremental breaches of the JCPOA with increased condemnation, whereby reciprocal trust between the E3/EU and Iran eroded further.¹⁷

The limits of compartmentalisation

The US withdrawal from the JCPOA also showed the limits of compartmentalisation. The argument that Iran could be encouraged to show self-restraint on the range of its ballistic missiles, which had sustained the compartmentalisation tactic previously, became weaker as Iran increased its arsenal. Similarly, the notion that Iran’s regional policies could be handled in a series of incremental arrangements, facilitated by the trust built upon years of good faith implementation of the JCPOA, became impossible to entertain.

With Iran upping the ante across the Middle East, the actual gains of compartmentalising nuclear diplomacy diminished by the day, while doubts about it increased inside the EU,¹⁸ with the E3’s rhetoric often borrowing from the US’s antagonistic discourse.¹⁹ The Europeans thus found themselves in the hardly tenable position of condemning Iran because of its ballistic programme and regional policies at a time when they sought to incentivise it to comply with the JCPOA.²⁰

This ambivalence reflected a deeper shift. As tensions with and over Iran grew, EU member states gradually stopped seeing the Islamic Republic as a potentially constructive interlocutor, but rather as a source of problems only. This assessment was greatly reinforced after Iran cracked down on protesters at the same time as Russia used Iranian armed drones in Ukraine. Compartmentalising the nuclear issue became much harder in the face of other interests – human rights and European security – gaining as much prominence as nuclear non-proliferation.

The limits of prioritisation

The much more confrontational edge that Trump had given to US-Iran relations constrained Biden’s choices and, consequently, those of the E3 and the HRVP. After Biden’s election, the E3 had hoped for swift action that would signal to Iran that the US was serious about re-joining the nuclear deal. Yet, when the Biden Administration gently rebuffed their proposals, they did not put up any resistance (Lynch 2021). Underlying European acquiescence were France and Germany’s much worsened view of Iran²¹ and a desire not to spoil the renewal of transatlantic relations promised by Biden.²² European dependence on transatlantic relations solidified further after Russia’s invasion of Ukraine re-affirmed the existential nature of the US’s security guarantees for most EU states.

In Iran, hard-liners were on the ascendancy and they had a bleaker view of the JCPOA than the Rouhani government. In 2015 the deal was expected to generate the strategic benefit of a long-term truce with the US and a normalised economic relationship with Europe. In 2021-22 neither reward was on the cards. Trump’s maximum pressure and Iran’s response made sure that US-Iran relations would remain tense even with a reactivated JCPOA. In this climate of uncertainty, Iran’s leadership anticipated that most EU companies, especially large corporations, would shy away from big investment plans in Iran. The economic benefit of the deal would thus be limited to the possibility for Iran to return to sell hydrocarbons in large quantities (Batmanghelidj 2021).²³ Furthermore, Iran’s hard-liners calculated that closer political and economic ties with China and Russia would give the Islamic Republic a stronger hand in negotiations with Europe and the US because of the reduced cost of a no-deal scenario.²⁴ Part of the Iranian leadership also entertained the mistaken notion that Russia’s war against Ukraine would play to Iran’s advantage because it would create a European demand for Iranian gas and oil.²⁵ Considerations of this sort must have prevented the Iranian leadership from forging a national consensus on reactivating the JCPOA in late summer 2022.

All notwithstanding, it was not unreasonable to expect prioritisation of some form of nuclear diplomacy to keep driving EU Iran policy, had it not been for the Iranian government’s crackdown on protesters and weapons transfers to Russia.²⁶ The repression of anti-regime demonstrators, especially women demanding equality, changed the EU domestic discourse about Iran in a way that the equally brutal crackdown on larger protests in 2009 and 2019 had failed to do. The arms sales to Russia turned Iran into a source of European insecurity. All across Europe a shadow of illegitimacy stretched over engagement with Iran. The pursuit of a nuclear deal ceased to be the key to unlock EU-Iran relations (Council of the EU 2022d).

Table 3. Limits of mitigation strategies.

Constraint	Strategy	Limits of mitigation strategies
Intensified interplay between multipolar competition, Middle Eastern fragmentation and intra-EU division following US withdrawal from JCPOA	Prioritisation	Nuclear non-proliferation no longer EU main priority after Iran’s rejection of HRVP-mediated text on reactivation of JCPOA Repression of protesters Arms sales to Russia
	Compartmentalisation	Iran’s more aggressive behaviour and expansion of ballistic arsenal post-US pull-out led E3/EU to criticise Iran while at the same time seeking to incentivise it not to abandon JCPOA
	Multilateralisation	Lack of mechanism to sanction US withdrawal from JCPOA Political inexpediency of EU retaliation against US secondary sanctions EU condemnation of Iran’s breaches of JCPOA while failing to deliver JCPOA economic benefits led to erosion of Iran’s trust in EU

Conclusion

The trajectory of EU Iran policy in 2003-22 was largely determined by the status of the nuclear dispute, which dominated the overall EU-Iran agenda. Consequently, EU Iran policy trended upward in the period culminating in the signing of the JCPOA in 2015 and downward after the US unilaterally left the deal in 2018.

Why did EU policy ‘work’ for years but then progressively lose its edge? Put simply, the US withdrawal from the JCPOA pulled the rug from under the E3/EU, whose efforts had always aimed at facilitating US-Iranian nuclear diplomacy. While correct, this answer only touches the surface. The deeper question revolves around how exactly the US withdrawal from the JCPOA affected E3/EU policy options or, more accurately, how it shaped the international and domestic contexts in which the E3/EU could exercise their options. This article has carried out such an investigation.

Even before the US withdrawal in 2018, the international context of EUFSP towards Iran was always challenging. Bush’s belligerent rhetoric towards Iran, coming soon after the US invasion of Iraq, stoked fears that the nuclear dispute could precipitate US and Israeli military action against Tehran. Even Obama took special care in depicting the JCPOA as a non-proliferation agreement that did not in itself change the antagonistic nature of US-Iran relations or would by any means reduce US commitment to Israel. Iran’s confrontation with its rivals, a historical constant dating from before the 1979 revolution, increased in the 21st century. And the intra-EU debate on Iran was not straightforwardly tilted towards engagement; there were always voices calling for confronting the Islamic Republic or at least for aligning with the generally more hawkish approach of the US. Yet, during these years of acute geopolitical confrontation, regional conflicts and lingering intra-EU differences, the EU – through the E3-HRVP lead group – carried out a strategically consistent and fairly proactive policy.

It did so because the E3/EU were able to deal with contestation, fragmentation and competition separately. The magnitude of Iran’s nuclear issue allowed the Europeans to concentrate on a single issue where intra-EU consensus was easier to achieve. Prioritisation worked very effectively in this respect, as did its corollary principle, compartmentalisation. But it was arguably multilateralisation that did the trick. Through their early engagement of Iran, which gave them first-mover advantage, the E3/EU framed Iran’s nuclear programme as a problem of proliferation, not about the proliferator. In so doing, they placed it in a normative framework in which the US and Iran could interact without having to go through a preliminary attenuation of their geopolitical-ideological rivalry. Facilitating US-Iran engagement, a sine qua non for any sustainable solution to the nuclear issue, was imperative for the E3/EU to pursue their non-proliferation and regional security interests. The same normative framework made it possible for Russia and China to join the Western countries in an ad hoc multilateral crisis management mechanism, the E3/EU + 3. The E3/EU’s efforts to multilateralise both the problem with Iran’s nuclear programme (compliance with the non-proliferation norm) and the mechanism to manage it (a multilateral ad hoc group) were their greatest contribution to the process that eventually resulted in the JCPOA.

The efficacy of EU Iran policy gradually diminished after Trump’s 2018 decision to leave the deal because the conditions to mitigate the effects of adverse contextual factors progressively wore away. The US abandonment of the JCPOA fatally weakened the faction inside the Iranian leadership that had supported the opening towards the West and gave ammunition to more hard-line forces, which amplified destabilising activities across the region. Iran became more repressive internally and more aggressive externally – and consequently harder to deal with for the Europeans. The US withdrawal also created unnecessary frictions in the US relationship with the EU, reluctant to antagonise its main ally, as well as with China and Russia, which veered closer to Iran. In short, the interplay between multipolar competition, regional fragmentation and intra-EU contestation intensified, whereby the EU struggled to handle them separately. The situation came to a head after Iran’s crackdown on protesters and drone sales to Russia made it impossible for EU governments to prioritise the nuclear issue only – even to compartmentalise it.

As of early 2023, EU member states were adjusting their Iran policy in a context in which their strategic options were constrained and the expected impact of such choices was modest. The room for intra-EU consensus on Iran was mostly defined by pressure on it and yet their coercion capacity had drastically diminished. Pressure worked before the JCPOA because the EU cut off significant commercial and investment relations with Iran. But US extraterritorial sanctions rendered EU-Iran trade so small that cutting it further would have little impact. The EU could have gained more leverage by providing incentives, but the political inexpediency of rewarding Iran greatly restricted the range of EU benefits potentially on offer.

EU policy options continue to this day to be shaped by the contextual factors. A thaw in regional tensions, a prospect to which Saudi Arabia’s decision to restore diplomatic ties with Iran has given some substance (provided it is brought to completion, which is still uncertain at the time of writing), may have a de-escalating effect on US and Israeli confrontation with Tehran. Some form of regional détente, as well as the apparent success of the Iranian government in quelling the protests, may lead EU governments to pragmatically contemplate other options instead of just condemnation and isolation, and therefore compartmentalising (even re-prioritising) the nuclear issue again. In fact, the Iranian leadership could be more receptive to diplomacy on the nuclear front at a time in which it prepares itself for the succession of the octogenarian Supreme Leader Khamenei. The conditions to deal with the contextual factors separately could thus re-emerge and the EU could have some leeway to articulate again a proactive policy.

Even in this more optimistic scenario EU options would nonetheless remain constrained by several factors. These include Iran’s nuclear advancements, which will force the E3/EU to contemplate less ambitious non-proliferation targets than those entailed by the JCPOA; Iran’s diminished interest in economic normalisation with the EU, as its nuclear calculations are now shaped by the interactions with its regional rivals more than by its desire to trade with the EU; the EU’s own increased dependence on US choices, due also to the arguably exhausted capacity to engage China and especially Russia in another multilateral endeavour; and the more repressive turn imparted by the IRI’s leadership, which sets a higher threshold for EU governments to provide benefits to Iran.

Even accounting for a diminished regional fragmentation, the combination of an increased potential for intra-EU divisions and a solidified strategic US/Israel-Iran confrontation would thus pose severe constraints on EUFSP. This is the bitter epilogue of the ever-elusive EU policy towards Iran.

Acknowledgements

This article is an expanded and revised version of a report published within the JOINT project to which Steven Blockmans, Akin Unver and Sine Ozkarasahin contributed. JOINT has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement N. 959143 (www.jointproject.eu). This publication reflects only the view of the author and the European Commission is not responsible for any use that may be made of the information it contains.

Additional information

Notes on contributors

Riccardo Alcaro

Riccardo Alcaro is Research Coordinator and Head of the Global Actors Programme at the Istituto Affari Internazionali (IAI), Rome, Italy.

Notes

1 Until 2009, when the Lisbon Treaty entered into force, simply High Representative (HR) for the Common Foreign and Security Policy.

2 Interviews were conducted between September and November 2021. The interviews were held under a strict non-attribution policy; interviewees were presented with a privacy disclaimer and orally agreed to speak with the author. Transcripts were kept with no reference to name, nationality or position of the interviewee. The indication of the position of the interviewees (‘official’, ‘senior official’ etc.) was agreed upon with individual interviewees.

3 For the greatest part of the period covered by this article (2003-20), the UK was an EU member state. After it left the Union, it remained part of the ‘E3’ group dealing with Iran’s nuclear issue in its capacity as a JCPOA signatory.

4 See, for instance, how Iran is construed in the strategic documents of Obama’s predecessor and successors: Bush (2006); Trump (2017); Biden (2022).

5 Online interviews with French official, 28 October 2022 and German official, 11 November 2022.

6 While low-enriched uranium (LEU) or uranium containing 3-4 per cent of U₂₃₅ (where U₂₃₅ is the uranium isotope susceptible to nuclear fission) is sufficient for fuel used in reactors, the core of a nuclear device consists of highly enriched uranium (HEU), which is 90 per cent made up of U₂₃₅, or plutonium, which is a by-product of the enrichment process.

7 A list of IAEA’s verification findings about Iran’s nuclear programme, as well as its concerns about undeclared nuclear particles detected in Iranian facilities, is available on the agency’s website; see IAEA (2023).

8 Online interviews with a German and a senior EU official, 11 and 21 November 2022.

9 Online interview with a senior EU official, 22 November 2022.

10 Online interview with a senior EU official, 22 November 2022.

11 Interview with European official, 17 October 2022.

12 EU sanctions targeted two Iranian officials and a unit within Iran’s Ministry of Intelligence.

13 UNSC Resolutions 1737, 1747, 1803 and 1929 introduced and gradually expanded the UN sanctions regime.

14 Belgium, Denmark, France, Germany, Greece, Italy, the Netherlands and Portugal.

15 Data on EU-Iran trade is available on the European Commission website (European Commission 2023).

16 Belgium, Denmark, Netherlands, Finland and Sweden.

17 Interviews with Iranian officials, 11 and 12 September 2022.

18 According to a senior EU official, Germany and the UK increasingly doubted the need for compartmentalisation in fall 2022, whereas the HRVP, France and the US wanted to keep it (online interview with senior EU official, 22 November 2022). 

19 A senior Iranian expert said: “The [E3] discourse, in particular, has become hardly distinguishable from that of the United States” (interview, 11 September 2022).

20 Online interview with French official, 7 November 2022.

21 Online interviews with French official, 28 October 2022; and German official, 11 November 2022.

22 As an Iranian official put it, the E3 “opposed Trump, not the US” (interview, 12 September 2022).

23 Two Iranian officials recalled that the JCPOA struggled to deliver economic benefits even prior to the US withdrawal (interviews, 11 and 12 September 2022).

24 Interviews with advisors to the Iranian foreign ministry, 12 September 2022.

25 This assessment was largely, though not universally, shared by the Iranian experts and officials interviewed for this article. According to a senior Italian official, the Iranians badly miscalculated that “they could extract more from the US and the E3/EU” following the Ukraine war; “demand for Iranian oil [in Europe] was in fact non-existent” (interview, 4 November 2022).

26 Interviews with European official, 17 October 2022; German official, 11 November 2022; senior EU official, 22 November 2022. However, the latter argued: “the nuclear track is dying on its own, not because of other issues”.