EU officials scramble to preserve Iran nuclear deal

EU foreign ministers on Monday discussed ways to ensure the US would not pull out of the nuclear deal, but stopped short of agreeing to new sanctions on Tehran.

The UK, France and Germany used a meeting of the EU's 28 foreign ministers to build support for expanding sanctions against Iran for its role in regional conflicts including Syria and Yemen. 

They hope that new measures will convince US President Donald Trump not to abandon the nuclear deal signed under his predecessor Barack Obama. Trump has been a vocal critic of the deal and vowed to rip it up during the 2016 campaign trail and since assuming office, viewing the agreement as a capitulation to Iran. 

Trump had issued a May 12 deadline to "fix" the agreement and impose tougher measures on Iran. The US president threatened that a failure to enact new measures would result in the US reimposing sanctions. 

Danish Foreign Minister Anders Samuelson said there was "a very broad majority" in favour of expanding sanctions.

Simon Coveney, the Irish foreign minister, said there was a need to "send a strong signal to Iran that we're concerned in relation to some of their activity particularly in Syria". "But also to send a message to Washington that we share their concerns in some of those areas," he added.

Any decision on sanctions requires unanimous approval from all 28 EU states and several, including Italy and Sweden, are not convinced about new measures. 

But German Foreign Minister Heiko Maas said the question of expanding sanctions would "remain on the agenda" in the coming weeks.

The EU is desperate to preserve the Iran nuclear deal, seeing it as the best way to stop Tehran getting the bomb. French President Emmanuel Macron and Germany's Chancellor Angela Merkel will both visit Washington on separate official visits before May 12, in part to lobby Trump on the issue.

Earlier this month, Iran said the US will "regret" violating the nuclear deal and that the country would respond "within a week" should that happen.

Speculation about the deal's impending collapse has contributed to a sliding Iranian rial. On April 10, Iran moved to enforce a single exchange rate against the US dollar and banned all unregulated trading to curb pressure on the currency after it hit an all-time low.

The official exchange rate now hovers around 42,000, down from 62,000 on earlier this month. Exchange offices have in recent weeks seen long queues as uncertainty over the nuclear deal looms. 

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In a further sign of discontent, the head of Iran's central bank, Valiollah Seif, appeared before parliament earlier this month to explain the move toward a single exchange rate. He was met with angry objections and interruptions from a group of lawmakers who briefly pushed him around on the podium and demanded his resignation.

Many Iranians are hoarding dollars as a preferred way to store money amid the drastic drop in the rial's value. Iranian banks have sought to discourage this practice, offering interest rates as high as 20 per cent.

Investors have been less willing to put their money into businesses amid attractive interest rates at banks, sparking further economic problems.