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Europe facing 'huge pressure' from U.S. over Iran trade channel - French minister

PARIS (Reuters) - European powers are facing huge pressure from the United States to drop its proposed trade channel with Iran and it will also not succumb to ultimatums from Tehran, French Finance Minister Bruno Le Maire said on Tuesday.

FILE PHOTO: French Economy and Finance Minister Bruno Le Maire delivers a speech during a high-level forum on debt at the Finance ministry in Paris, France, May 7, 2019. REUTERS/Benoit Tessier/File Photo

Britain, France and Germany, which signed a 2015 nuclear deal with Iran along with the United States, China and Russia, are determined to show they can compensate for last year’s U.S. withdrawal from the accord, protect trade and still prevent Tehran from developing a nuclear bomb.

As part of those efforts, it is trying to set up a special trade channel known as INSTEX, that will deal essentially with food and medical trade, but it is struggling to become operational.

“Yes, there is American pressure. It’s strong, very strong and very direct on this subject,” Le Maire told reporters in Paris. “There is pressure on political officials, the administration and all those who are implicated on this subject.”

Tension between Washington and Tehran has escalated this month. The U.S. wants its European allies to fall behind its policy of putting maximum pressure on Iran through sanctions to push it to fresh negotiations on a broader arms control deal.

Iran accuses the Europeans of not doing enough to save the deal.

Le Maire said that as well as the U.S. pressure, daily threats by Iran to withdraw from the agreement were also making its talks on creating the trade channel more difficult.

“Iran is constantly threatening to break the agreement and that doesn’t facilitate the possibility of trade,” he said.

Iran has warned the European powers that it could renege on key parts of the nuclear deal after 60 days if oil exports did not drastically increase.

“I do not think that Europe will give into an ultimatum,” Le Maire said.

Reporting by John Irish; Editing by Sudip Kar-Gupta and Bate Felix