The Crashing Iranian Economy and the Mullahs’ Last Stand

There are reports now that Iranian officials are in a panic as they race to save the nuclear deal and stave off a return of crushing sanctions on their fragile economy. Although European officials have claimed they will stay in the nuclear deal despite President Trump decertifying the it and reapplying crushing sanctions last week, there is little they can do.  Iranian government representatives and their European counterparts have been huddling with ex State Department officials last week, but with little success with a way forward as Congress has been cool to the idea of discussing any relaxing of sanctions.

The Washington Free Beacon reported the following:

European diplomats are said to be blaming the Obama administration for drumming up business with Iran and telling these allies that they could engage in economic transactions without penalty. The reaction from lawmakers has been unsympathetic, source said, explaining that congressional opponents of the deal long warned these European countries the deal would be subject to harsh scrutiny after President Barack Obama left office.

A State Department official familiar with the progress of new negotiations surrounding the deal said the Trump administration is set on fundamentally changing Iran’s behavior, including its buildup on ballistic missiles and support for terrorism, before it agree to any Iranian demands.

One veteran U.S. adviser close to the White House told the Washington Free Beacon that Iran’s reaction indicates its desperation to remain in the Obama-era agreement and continue receiving cash windfalls.

“As President Trump has always said, the Iran deal was great for the mullahs and terrible for the American people,” the source said, speaking only on background. “Obama gave Iran more than they could ever have imagined, and now Trump is taking it away. The Iranians are rushing to grab and save whatever they can. Europe will have to choose a side.”

Despite public calls for doing business with Iran, there is little the EU can do as corporations are pulling out of doing business with the rogue state due to fear from banking sanctions.  Russia has no interest in saving the deal either despite public comradery, since Putin finally has an Iran that is becoming pacified before it grows out of control.

All of this pressure on the regime in Tehran makes it far more likely that a military confrontation is in the offing. This is not a bad thing.  A war was expected eventually between the Ayatollahs in Iran and Israel and the Sunni block. If the JCPOA had been kept, Iran would have waited and been far too powerful to stop.  Now they are in a weak position and except for Hezbollah and the Houthis in Yemen, Iran cannot sustain a warfront for too long unless they have other actors enter on their behalf.

With North Korea threatening to pull out of the Trump-Un meet up and China becoming a serious threat, the Mullahs may be banking on making a last stand. Yet they will have to do this before their economy crashes and their citizens revolt.