Greece tries to ease Iran oil ban

By Joshua Chaffin Brussels and James Blitz in London

Greece is looking to its European Union partners to make last-minute concessions over an embargo on Iranian oil, complicating the bloc?s efforts to unveil sanctions against Tehran on Monday.

European diplomats are confident that EU foreign ministers will agree plans on Monday to impose a phased ban on the import of crude oil from Iran over the next few months.

But Greek brinkmanship has added an element of suspense to the meeting, which is aimed at imposing the most serious sanctions the EU has agreed in protest at Iran?s nuclear programme.

The imposition of a ban on Iranian oil will be painful for southern European countries, such as Italy and Spain, which are heavily dependent on imports from Iran.

However, Greece argues that it is in a particularly vulnerable position. Iran supplies crude to Greece on highly favourable terms that would be difficult to match elsewhere. Greek refiners do not have to make payment until 60 days after receiving shipments, according to EU officials.

Adding to the complication is the dire condition of the Greek economy and the country?s place at the centre of the continent?s debt crisis.

Diplomats said Greece was holding out for the EU ban to be phased in gradually over eight months – about three months longer than the timescale which most of the rest of the EU desires. Greece wants the extra time to find alternative sources of supply.

Athens is also negotiating over the terms of a review of the ban, which all EU countries accept must be undertaken after two or three months.

EU members accept a review is needed to check that the ban does not create a sharp rise in the world oil price or undermine the European economy. Greece is demanding that the terms of the review should be as wide-ranging as possible, diplomats said.

?It is inconceivable that Greece would scupper the ban altogether,? said a diplomat from one EU state.

?What we?re seeing here is classic EU brinkmanship but we need to make sure the outcome does not water down the EU ban so far that Iran emerges unscathed.?

A senior EU official acknowledged that talks over the oil embargo were becoming increasingly mixed up with Athens? broader dealings with the bloc over the euro crisis, and the reform package it has agreed in exchange for a 130bn euros bail-out.

?This is adding an additional complication to what is already a complicated negotiation,? the senior official said. It emerged yesterday that the EU plans a wide range of measures in addition to the oil embargo. It will for the first time impose a partial asset freeze on the Central Bank of Iran.

The EU also plans to ban the transfer from Iran to Europe of gold and precious metals.

This ban on the export of precious commodities is aimed at stopping the Iranian regime selling them assets for foreign currency.

Gold traders believe that Tehran repatriated most of its official gold reserves from Switzerland a few years ago and could use the commodity, which is trading near record highs, in a desperate attempt to raise foreign currency.

Nicolas Sarkozy, French president, yesterday accused Iran of lying and denounced what he called its ?senseless race for a nuclear bomb?.

He called for ?much stronger, much more decisive? sanctions, adding that ?time is running out? and ?everything must be done to avoid? international military intervention.

? The Financial Times Limited 2012