An even more ambitious version of this SPV would have a banking licence, and would thus have access to the ECB and its TARGET interbank settlement system. The explicit purpose of such a vehicle would be to completely bypass the dollar channel, to allow Iran to denominate its oil exports in euros, and thus to be able to purchase goods and services invoiced in euros.
The political willingness underlying this project - at this stage, it is only a project - is both necessary and commendable, but its effectiveness is questionable. The United States’ main argument aims to have a deterrent effect: "if you do business with Iran, expect great difficulty in doing business in the United States". The shocking brutality of the wording of this law of the strongest makes it no less effective, and it is hard to see how European companies could ignore it - except, perhaps, for certain companies specializing in the Iranian market.
Jean-Claude Juncker explains that it is absurd for the EU to have to pay for its oil in dollars, and thinks the euro should be an instrument of European sovereignty. Do you think this is possible, and if so, when?
France has long denounced the "exorbitant privilege" that the US dollar, as the world currency, confers to the United States. Yet this denunciation has rarely complemented by realistic proposals to reduce the dollar’s role. The euro’s launch resurrected this goal, which has now been taken up by federalists such as Jean-Claude Juncker, but also mentioned by some German politicians, who are sensitive to the trade opportunities offered by the Iranian market. Yet this goal is still a long way from being achieved. It is true that the US dollar is THE international reserve currency, in a sense that goes beyond the mere holding of foreign exchange reserves by various countries’ central banks. The US Federal Reserve (Fed) is, de facto rather than de jure, the ultimate provider of the liquidity required for the functioning of global financial markets. This was very clear at the end of the year 2008. Indeed, in order to avoid the international financial collapse that would have occurred had the intense global demand for dollars not been met, the Fed established unlimited swap lines with many central banks, including the ECB and the Swiss National Bank. The ECB, which used these swap lines to respond to European banks’ needs, was very cautious when it came to demands for euros, as demonstrated by its reluctance towards Hungary, Poland and Latvia during the same period. The ECB is however not to blame, because, unlike the Fed or the PBC (China’s central bank), it is not supported by a state, and must constantly consider the risks posed by its decisions to grant liquidity or to acquire assets.