In Europe, governments may have recently toughened their stance – as France, the UK, and Germany jointly did only last Friday – but their desire to negotiate with Iran remains.

After the long-haul diplomacy that led to the nuclear deal in 2015, the Trump administration’s ‘maximum pressure’ campaign has pushed the mainstream of Iranian politics away from support for engaging the West.

This new policy brief by Ellie Geranmayeh maps how power operates inside Iran and describes how the different factions that shape decisions in the system each approach the country’s difficulties and attempt to influence the supreme leader. The paper considers what shifting dynamics inside Iran mean for whether and how Europe can succeed in its diplomatic outreach with the country.

The main findings are:

• The US maximum pressure campaign has fundamentally shifted internal political discourse among Iran’s leaders away from a pro-engagement agenda towards a confrontational ‘maximum resistance’ posture.
• Three main power blocs compete to influence Iran’s supreme leader, including the ‘modernisers’, who were instrumental in building the case internally for the nuclear deal. The maximum pressure campaign has placed them, including Hassan Rouhani’s government, on the back foot.
• Improving the economy remains the most pressing issue in Iran. Without a Western economic offer, the other two power blocs – the conservative ‘principlists’ and IRGC-linked ‘securocrats’ – will continue their recent ascendancy and press for a confrontational ‘maximum resistance’ response.
• This fierce debate over the economy is closely tied to how Iranian political actors view US sanctions and Western diplomacy more generally after the failed experiment of the nuclear deal.  
• Although Iran’s modernisers have a weak hand internally, they are not completely in retreat. The supreme leader has allowed modernisers to test out sensitive diplomatic options, and the Iranian decision-making system has proven itself capable of engaging in pragmatic diplomacy with the West. 

The paper also focuses on what Europeans can do:

• Europeans wish to persuade Iran to compromise on strategic issues – but without understanding the dynamics of domestic Iranian politics, they will not get far.
• In advance of the US presidential election, Europeans should safeguard the nuclear agreement from further attempts by the US administration to sabotage it while pressing Iran to halt its most alarming nuclear activities. Immediately after the election, Europeans should embark on shuttle diplomacy to advance a reset agenda between Tehran and Washington.
• This should begin by addressing the most urgent concerns over Iran’s nuclear programme and putting in place an interim deal that freezes and eventually rolls back Iran’s recent nuclear activities. Achieving this is far more likely under a Biden presidency, but it is still feasible to make progress on this track in a Trump second term.
• As part of future negotiations with Iran, Europeans will need to be aware that the priority for Iran’s leaders is the economy. Whoever wins Iran’s 2021 presidential election will likely inherit bigger burdens than Rouhani did in 2013. The most effective route for Europe to influence decision-makers in Iran will be to provide them with a way out of the current economic ordeal.
• Economic relief will need to be attractive enough and sequenced in such a way for Iran to commit to eventual full compliance with the JCPOA. While France, Germany, and the UK can kickstart this process, given the impact of US sanctions, Washington’s position will determine how far this path can lead.
• Positive political momentum on this diplomatic effort could also strengthen modernisers ahead of Iran’s own presidential race in 2021, and put in place a roadmap for negotiations with Iran that outlasts the current Rouhani administration.

“Europe and the US need a far more nuanced understanding of Iranian domestic politics and how their actions over recent years have influenced the power dynamics on the ground in Tehran”, says Ellie Geranmayeh. “Despite the fact that the US maximum pressure campaign has placed more confrontational forces in the ascendency in Tehran, there is a small window available in the coming year for Europe to work with more moderate forces in Iran on a face-saving reset formula that brings Washington and Tehran back to negotiations”, the author of the report adds.     

About the author:

Ellie Geranmayeh is deputy director of the Middle East and North Africa programme at ECFR, where she focuses on European policy towards Iran. Prior to this she was based at Herbert Smith Freehills LLP after graduating in law from the University of Cambridge.