Germany urges EU payment system without US to save Iran deal

The German foreign minister has said Europe must create a new system for financial transactions to save the nuclear deal with Iran.

In a guest article for Germany's Handelsblatt business newspaper, German Foreign Minister Heiko Maas warned: "Where the United States 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 US, creating a European Monetary Fund and building an independent Swift system," Maas wrote.

The Belgium-based SWIFT global payment network that facilitates the bulk of the world's cross-border transactions shut out Iran in 2012 after the United States and EU agreed to impose sanctions on the Islamic Republic over its nuclear activities.

The 2015 agreement between Iran and world powers lifted international sanctions. In return, Iran agreed to restrictions on its nuclear activities.

But relations between the US and its European allies have been strained after US President Donald Trump withdrew the United States from the deal - signed before he took office - calling the agreement deeply flawed and imposing new sanctions that kicked in earlier this month.

The new sanctions target Iran's trade in gold and other precious metals, purchases of US dollars and its car industry. Trump has said the United States will issue another round of tougher sanctions in November that will target Iran's oil sales and banking sector.

Trump's imposition of tariffs on steel and aluminum imports from the European Union further strained relations between the US and its European allies.

Europe has been scrambling to persuade Teheran to remain in the 2015 accord. But with European companies wary of far-reaching US financial penalties, it's proving to be a challenge.

The EU has crafted countermeasures intended to prevent European companies from abiding by Trump's unilateral restrictions.

The EU has enforced the so-called Blocking Statute to protect its companies operating in Iran from US sanctions against the country.

However, European companies such as Total, Maersk and others quit Iran for fear of US sanctions. These companies are dependent on the US-dominated international banking system and international financial markets.

Iran urged Europe this week to speed up efforts to salvage the nuclear accord after French oil group Total formally pulled out of a major gas project.

"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," Mass added.

"Given the circumstances, it is of strategic importance that we tell Washington clearly: we want to work together," Maas wrote. "But we will not allow you to hurt our interests without consulting us."