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EU Earmarks $20Mln for Iran in Effort to Offset US Sanctions

The European Union is working hard to salvage the 2015 nuclear agreement with Iran, which the US withdrew from earlier this year, and widen economic relations “in areas that are of direct benefit to our citizens."

The European Union allocated 18 million euros ($20.6 million) in aid for Iran on Thursday, including for the country’s private sector in an effort to lessen the impact of US sanctions and encourage Tehran to stay in the 2015 nuclear agreement aimed at  curbing its nuclear program, Reuters reported.

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The bailout is part of a 50 million euro ($58 million) aid package that Brussels has set aside for Iran in its budget.

Faced with a US threat to punish foreign companies that refuse to join Washington’s sanctions and continue doing business with Iran, the EU has activated the so-called “blocking statute” and has been taking other measures to meet Tehran’s demand for practical guarantees that its economic ties with Europe will not suffer as a result of the US sanctions.

In a statement on Thursday, the EU’s foreign policy commissioner, Federica Mogherini, said that Brussels remained fully committed to mutually —rewarding cooperation with Iran.

"This new package will widen economic and sectoral relations in areas that are of direct benefit to our citizens," she said.

The EU will spend 8 million euros ($9.2 million) on the Islamic Republic's private sector, including assistance for small and medium-sized enterprises and Iran's Trade Promotion Organization.

A further 8 million euros will go to environmental projects and 2 million euros ($2.3 million) to fighting harm caused by drugs.

On Monday, Iran urged the EU to speed up efforts to salvage the 2015 nuclear deal between Tehran and major powers that US President Donald Trump abandoned in May,  threatening otherwise to stop complying with its terms.

The first wave of US sanctions targeting Iranian exports, the country's financial system and its ability to access the global financial system, took effect at midnight on Tuesday.

READ MORE: EU Firms Free to Decide on Activities in Iran Amid US Sanctions — EU Commission

A second wave of sanctions to targeting Iran’s energy sector is scheduled for November 4.

The 2015 nuclear deal, also known as the JCPOA, eased sanctions earlier imposed on Iran in exchange for Tehran curtailing its nuclear weapons program.

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