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Rouhani Says European Measures To Counter U.S. Sanctions 'Disappointing'

Austrian President Alexander Van der Bellen and Iranian President Hassan Rouhani attend a news conference in Vienna, Austria, July 4, 2018.

Iranian President Hassan Rouhani has told the leaders of France and Germany that a European package of economic measures to counter the effects of U.S. sanctions does not go far enough, Iranian news agencies are reporting.

Rouhani told French President Emmanuel Macron in a phone call that the package "does not meet all our demands," the IRNA state news agency reported late on July 5.

In another phone call to German Chancellor Angela Merkel, Rouhani said the European economic measures are "disappointing," the Tasnim news agency reported.

"Unfortunately, the proposed package lacked an action plan or a clear road map for continuation of cooperation. It only included some general promises like previous EU statements," Tasnim quoted Rouhani as saying.

The Iranian leader said he hoped deficiencies Iran sees with the package can be addressed at an upcoming meeting of the foreign ministers of Iran and the five world powers that are signatories to its 2015 nuclear agreement and which have pledged to keep honoring it -- France, Germany, Britain, Russia, and China.

The meeting scheduled for July 6 in Vienna comes two months after U.S. President Donald Trump announced he was abandoning the nuclear deal and moving to reimpose sanctions on Iran.

While the other signatories have vowed to stay in the accord, dozens of European, Russian, and Asian companies have announced plans to pull out of Iran for fear of incurring U.S. penalties when sanctions are reimposed in November.

The European Union has scrambled to find ways to counter the sanctions and ensure that Iran continues to enjoy the benefits of global sanctions relief under the deal, which was granted in 2016 in exchange for curbs on Iran's nuclear activities.

Iran has warned that it may walk away from the deal unless other signatories "guarantee" that it will continue to benefit. The principal benefit Iran has experienced under the deal is a doubling of its oil exports to around 2.8 million barrels a day.

But Washington has also warned European allies that they face possible penalties if they violate U.S. sanctions, which Washington says are aimed at reducing Iranian oil exports to "zero" -- a level that would deprive Iran's economy of its principal source of revenue and economic growth.

In light of Washington's push on sanctions, European leaders have said they would do their utmost of maintain business ties with Iran but it would be difficult for them to make any "guarantees."

Rouhani did not specify what he found lacking in the EU package of measures to counter U.S. sanctions.

This week, the European Parliament approved a key component of the package, giving the European Investment Bank authority to invest in Iran despite the U.S. sanctions.

The measure authorizes the bank to work with Iran starting in August, but it does not require it to do so.

Reuters reports that whether the bank will invest in Iran is in doubt. The bank currently has a policy of not lending to Iran and other countries listed as high-risk by a global terrorism financing watchdog.

Also, the bank has expressed concerns that it will have difficulty raising money in financial markets if it defies the U.S. sanctions.

"Maintaining access to these markets is a quasi life-or-death issue for the [bank]" because it has $120 billion of bonds held by investors worldwide that must be continually rolled over and refinanced, Director-General Bertrand de Mazieres said in May.

Beyond the European Investment Bank plan, other elements of the European economic package that Rohani criticized as insufficient include a special measure to shield EU companies from the U.S. sanctions and a proposal for EU governments to make direct money transfers to Iran's central bank to avoid U.S. penalties.

Even before the United States moved to reimpose sanctions on Iran, Tehran complained that the surge in foreign investment and trade that was expected to come under the nuclear deal never materialized.

Now, the threat of U.S. sanctions has increasingly darkened the outlook for Iran's economy, helping to stoke a plunge in the Iranian rial this year that has driven up prices and provoked street protests and strikes.

With reporting by AFP and Reuters