EU adopts sustainable economic development package for Iran

EU adopts sustainable economic development package for Iran
European Commission High Representative Federica Mogherini © Ministerie van Buitenlandse Zaken

The European Commission has adopted an €18m sustainable economic development package for Iran, which will promote social cohesion and support investment in the private sector.

The €18m in funding is the first tranche of a total of €50m in a sustainable economic development package which aims to address a number of key social and economic challenges in Iran. The package is part of an effort to increase co-operation between Iran and the EU as part of the Joint Comprehensive Plan of Action (JCPoA), also known as the Iran nuclear deal.

In recent weeks, following the withdrawal of the US from the deal, the EU has dramatically increased its efforts to commit to the deal, by countering US sanctions on Iran and now by accelerating its investment in the country, which in turn aims to catalyse additional private investment in Iran as part of an ongoing effort to grow the country’s economy.

How will the funding be allocated to support social and economic development in Iran?

Of the total €18m in funding, €8m will be allocated to providing assistance to Iran’s private sector. This will include efforts to support small and medium-sized enterprises, develop value chains in some industries, and provide technical assistance to Iran’s Trade Promotion Organisation.

A further €8m will address environmental challenges – again by providing technical support – and €2m will support drug harm reduction, to improve sustainability and address social challenges across the country.

How does the latest funding announcement further the EU’s aims with the JCPoA?

Following the announcement, EU leaders took the opportunity to emphasise their commitment to the JCPoA, and welcomed the first tranche of funding – and the support it will provide to Iran’s economy – as a step towards renewing the bloc’s relationship with Iran.

European Commission High Representative Federica Mogherini said: “Since the renewal of the EU-Iran relations as a result of the Iran nuclear deal, cooperation has developed in many sectors. We are committed to sustain it and this new package will widen economic and sectoral relations in areas that are of direct benefit to our citizens.”

Commissioner for International Cooperation and Development, Neven Mimica, added: “With these measures, the EU demonstrates its support to the Iranian people and their peaceful and sustainable development. It encourages stronger involvement of all actors in Iran and in particular the private sector.”

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