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Submitted by Robert Naiman on 8 December 2011 - 8:20pm
Remember, "It's the Economy, Stupid?" So how come Democrats in Congress - over the objections of the Obama Administration - are helping Republicans press sanctions on Europeans who buy oil from Iran - sanctions that would increase unemployment in the U.S. during the 2012 campaign?
The National Defense Authorization Act now contains a Senate amendment by Republican Senator Mark Kirk - supported by many Democrats in Congress - that would sanction European banks and companies that do business with Iran's Central Bank, in order to stop Europeans from buying Iranian oil. This is a big deal, because Iran is the world's fifth-largest oil exporter, and blocking Iranian oil exports to Europe would raise the price of oil, in Europe and in the United States.
Kirk's amendment would hurt the U.S. economy, at a time when economic contraction in Europe could push the U.S. back into recession.
Is fear of the economic blowback of the sanctions on Europe that Kirk wants to impose justified? Many Europeans seem to think so.
On Tuesday, Reuters reported:
The European Union is becoming skeptical about slapping sanctions on imports of Iranian oil, diplomats and traders say, as awareness grows that the embargo could damage its own economy without doing much to undercut to Iran's oil revenues.
"Maybe the aim of sanctions is to help Italy, Spain and Greece to collapse and make the EU a smaller club," one trader joked.
The remark reflects the growing unease that EU sanctions would hit hardest some of the continent's weakest economies, because Iranian oil provides the highest share of their needs, not to mention the rest of the bloc.