Europe Must Create New Monetary Fund That Leaves U.S. Out to Save Iran Deal, Germany Says

Germany's top diplomat has argued that Europe should create a new system for financial transactions that would exclude the U.S., which has abandoned a nuclear deal with Iran and threatened sanctions against those who stood by it.

Germany has joined European allies France and U.K. along with Russia and China in backing the 2015 nuclear accord that President Donald Trump withdrew from in May, triggering new U.S. sanctions on nations doing business with Iran. In an op-ed featured Tuesday by Germany's Handelsblatt business newspaper, German Foreign Minister Heiko Maas hailed the strong post–World War II ties traditionally enjoyed by Washington and Berlin, but he warned, "Where the U.S. crosses red lines, we as Europeans must counterbalance—as hard as that is."

"It is therefore essential that we strengthen European autonomy by setting up payment channels independent of the U.S.A., creating a European Monetary Fund and building an independent Swift system," Maas wrote.

"The devil is in a thousand details. But every day the deal persists is better than the high-explosive crisis that otherwise threatens the Middle East," he added.

Trump has faced mounting international criticism over his decision to withdraw from the Iran deal, and the deal's other signatories have since scrambled to preserve it in absence of the U.S. Brokered under former President Barack Obama, the landmark agreement saw the lifting of billions of dollars' worth of sanctions against Iran in exchange for severe restrictions against the country's nuclear program. Backed almost exclusively abroad by Israel and Sunni Muslim monarchies in the Gulf, Trump has determined that the deal's failure to address Iran's alleged support for militant groups abroad and ballistic missile development warranted a renegotiating of its terms, something Iran refused to do.

The first set of U.S. sanctions came into effect earlier this month—targeting key products and industries—and a second batch that specifically aims at Iran's energy sector will be enacted in November. China and Russia have outright rejected Trump's campaign to cut Iranian oil and gas exports to zero, and the EU has crafted countermeasures intended to prevent European companies from abiding by Trump's unilateral restrictions.

Experts have warned that the U.S. strategy threatened to isolate it from the international market it has long dominated, giving China and Russia an opportunity to capitalize on a West-to-East shift of global economic and political power. In a phone conference hosted last month by Washington, D.C., based progressive think tank Diplomacy Works, Richard Nephew, former principal deputy coordinator for sanctions policy at the Department of State and the lead sanctions expert for the U.S. team negotiating with Iran, warned about "the development of alternative systems" to counter U.S. influence over international finance.

"The real problem we've got is not that we're limiting our own national security use of these tools in the future, although that's pretty big, but we're also going to be limiting our economic benefit from being the center of the international economic universe," Nephew said. "I don't think we fully understand yet what that looks like and what happens to the U.S. banking system...what happens to the U.S. investment and U.S. financial markets, without having people wanting to put money here."

Ignoring European protests, the Trump administration has doubled down on its anti-Iran efforts, and the State Department announced the creation of an Iran Action Group on Thursday, the 65th anniversary of a CIA coup that overthrew Iran's democratically elected prime minister and reinstated a pro-West absolute monarchy, which was later ousted by the revolutionary Shiite Muslim leadership currently in power. Iranian Foreign Minister Mohammad Javad Zarif tweeted Sunday that Washington's latest moves showed it "dreams of doing the same through pressure, misinformation & demagoguery. Never again."

In addition to the Iran deal, Trump has split with European allies on a number of other key issues, including funding for the NATO Western military alliance, the relocation of the U.S. Embassy in Israel from Tel Aviv to Jerusalem and the U.S. exit from the Paris climate agreement. The U.S. and the EU are also currently embroiled in a global trade dispute stemming from Trump's decision to impose new steel and aluminum tariffs.

Maas has previously called for Europe to be more independent from the U.S and to assert itself by taking a new role in world affairs. In an April interview with Der Spiegel, Maas said, "The U.S. under Donald Trump will not play the same role that it has in the past," criticizing the president's "America first" ideology and anticipating that Germany and its allies "have to consider how to compensate for the American withdrawal and how to redistribute various tasks."

Maas's words echoed those of his predecessor, Sigmar Gabriel, who said in December, "Germany can no longer simply react to U.S. policy but must establish its own position…even after Trump leaves the White House, relations with the U.S. will never be the same."