MacroScope

The Iranian thaw

By Mike Peacock
January 20, 2014

A landmark deal curbing Iran’s nuclear programme in return for a loosening of sanctions appears to be underway, an agreement intended to buy time for a permanent settlement of a decade-old standoff.

Under the deal, Iran must suspend enrichment of uranium to a fissile concentration of 20 percent. An Iranian official has just said Tehran will start its suspension of uranium enrichment up to 20 percent in a few hours.

EU foreign ministers meet in Brussels and are expected to suspend some sanctions against Iran in line with the Nov. 24 interim agreement if as expected, the United Nations’ nuclear watchdog confirms Tehran is meeting its end of the bargain.

Given the green light, Tehran will be able to retrieve $4.2 billion in oil revenues frozen in overseas accounts, and resume trade in petrochemicals, gold and other precious metals. Iranian President Hassan Rouhani will court global business in Davos later in the week.

If things go according to plan, the potential of a market of 76 million people in a country with some of the world’s biggest oil and gas reserves will be hard for foreign business to ignore. Iranian trade officials say delegations from Turkey, Georgia, Ireland, Tunisia, Kazakhstan, China, Italy, India, Austria and Sweden have visited Iran since early December.

The EU ministers will also give the go-ahead to send an EU military mission  of up to 1,000 soldiers to the Central African Republic. A senior U.N. official warned last week of the risk of genocide without a more robust international response to communal bloodshed.

A week after ex-rebel leader Michel Djotodia was pressured into stepping down, the country’s national assembly will vote on the next interim leader. Stand in leader Alexandre-Ferdinand Nguendet has ruled out standing.

France has been the main player in CAR and Mali. Today, President Francois Hollande is in The Hague for talks with Dutch premier Mark Rutte.

French sources say Hollande wants to change the perception that France and the Netherlands are always on opposite sides when it comes to EU debates, and the two are expected to discussed euro zone reforms, new leadership for the European Commission and forthcoming European elections and the surge in support for fringe parties in both their countries.

The visit follows Marine Le Pen’s trip to The Hague to launch her Eurosceptic alliance with Geert Wilders. A poll in Britain over the weekend named the anti-European Union UK Independence Party as the public’s favourite political party. This is going to be a big theme with EU elections due in May.

It’s been a rough time for Hollande but a weekend poll showed his approval rating remained unchanged (still very low, that is) following a news conference to announce economic reforms and after reports of an affair with actress Julie Gayet put his private life in the spotlight.

Hollande’s partner, first lady Valerie Trierweiler left hospital on Saturday, a week after reports of his affair broke. Whether the Dutch press will treat him as courteously as the French have, or will get to ask questions at all, remains to be seen. Hollande has pledged to clarify Trierweiler’s status ahead of a trip to the United States scheduled for Feb. 9.

Ukrainians were back on the streets of Kiev on Sunday, clashing with police after anti-protest legislation, which President Viktor Yanukovich’s opponents say paves the way for a police state. Opposition leader Vitaly Klitscho said Yanukovich had agreed to set up a committee today to settle the political crisis.

On the euro zone front, Moody’s has lifted Ireland back into investment grade, the last rating agency to do so, opening up its already sought after debt to investors prohibited from buying junk-rated paper.

In Italy, Silvio Berlusconi and new centre-left leader Matteo Renzi have struck a deal on electoral reform which could bring much-needed governmental stability. The agreed to seek to consolidate the power of the largest parties at the expense of smaller ones.

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