EU needs to talk to Iran on oil link

Iran's pursuit of a nuclear programme has in many ways become a constant variable in international relations and is already factored into the balance of power in the Middle East.

Why then are the E3 (France, UK, Germany) sounding the alarm bells now? It has mostly to do with internal politics of the EU and the future of the European Security and Defence Policy (ESDP). ESDP has for the most part been a paper tiger. The substance and the will to promote interests globally are missing on the EU level. Iraq, Afghanistan and various projects in Africa, Latin America and Asia are American-led projects, or areas where individual EU members are engaged through bilateral deals or within coalitions of the willing.

Iran, however, seems to be a real break with tradition. For one it is a rare example of the big three in the EU managing to coordinate interests.

Second, it is the first brinkmanship game with high stakes that the EU has been willing to play. Whether the EU will finish it whether it will muster the willingness in the end to use force if it comes to that is doubtful, but a separate issue.

Still, there is a problem here. The EU approach to Iran is too narrow and thus strategically flawed. It is over focused on Iran's nuclear programme, an issue where the room for progress is smallest and where European tools for engagement are most limited. Iran's nuclear programme can only be averted by changing the regime through a process of tactful diplomatic engagement, or through an Iraq-type military expedition. Neither is an ideal option nor a speedy answer to the problem, but the first is better than the latter.

A military invasion for all practical purposes will be another difficult battle to win. The issue is in winning the hearts and minds of the Muslim world and the Iraq experience has clearly shown that a military-driven approach is not the best way of going about achieving this goal. At the same time, using surgical military strikes to destroy Iran's nuclear capabilities, which is something some are strongly advocating, is also a bad option.

First, it is highly improbable that all of Iran's facilities can be destroyed via an aerial attack. In this case US Secretary of Defence Donald Rumsfeld's logic of known unknowns applies. We know that we don't know all the sites in which Iran hides its nuclear materials.

Second, we also know that we will radicalise the Iranian population, including the moderates, if the US, Israel, or some combination of a coalition force, strikes Iran. By this, we will only undermine the small gains in the internal reform process that have been reached thus far.

So back to Europe's shortsightedness: given that Iran is likely to develop a nuclear programme and given that a military option is really not an option, why put all the chips on this brinkmanship game that the E3 are now playing with Iran? Rather, the EU needs to diversify its engagement with Iran to also include a dialogue on energy and governance, reforms and economic development.

Obsession

It is through strengthening the latter sectors that the EU can achieve progress on the nuclear front. Iran's nuclear programme is an obsession of an insecure nation. If the EU could find engagement programmes to help Iranians with their self-confidence problem, we could potentially also get to the bottom of the nuclear issue.

The energy dimension is something that should play a more prominent role in the EU's strategic planning on Iran. Europe's energy dependence on Russia is not only worrying but outright dangerous. The Russians have encircled Europe with Russian gas and oil now coming into the EU from both the north and the south via Turkey. The only existing alternatives are the Algerian and Libyan resources, but these are almost negligible in comparison to the size of the Russian products. Iran, which sits on almost 16 per cent of the world's proven gas reserves, presents itself as the only serious alternative for the EU to the Russian option.

However, for this alternative to be realised, the EU urgently needs to do two things. One, it needs to start thinking about what to do with the south Caucasus. The European Neighbourhood Policy is not enough in this case. A decision has to be taken on accession. This region is simply too important to Europe to have the relationship be driven by Brussels' bureaucracy. The trans-Caucasus pipeline has the potential to bring both Kazakh and Iranian gas to Europe. If the EU misses the opportunity to engage the south Caucasus republics, the energy routes there will come under the control of Russia's Gazprom.

Second, the EU needs to talk to Iran about linking its gas into the trans-Caucasus pipeline and making it available to the EU consumers.

If the EU can achieve this goal, it will have done a great deal more to secure itself than is presently the case with all the emphasis going to the nuclear issue.

- Borut Grgic is the director of the Institute for Strategic Studies in Ljubljana.