With hostility between Iran and the U.S. running high and Tehran vowing to backtrack on its commitment to the 2015 international nuclear deal, questions have arisen over whether European nations will stand by the pact, or side with the U.S.
The EU has attracted criticism for its slow response to the crisis that erupted last week following the U.S. airstrike on Baghdad that killed Iran's top military commander Qasem Suleimani, prompting public and political outrage in Iran.
Only on Monday (four days after the attack and a day after Iran said it would no longer abide by uranium enrichment limits in the nuclear deal struck with the U.S., U.K., France, Germany, Russia and China), did European Commission President Ursula von der Leyen comment on the crisis.
Von der Leyen said in a statement that "now it is important to halt the cycle of violence" and that a space for diplomacy was created; "Europe has a special responsibility here," she said.
Europe might well feel a special responsibility toward Iran given that its most powerful member states — the U.K., France and Germany — were signatories of the 2015 international nuclear deal that was signed with the Islamic Republic.
Following the U.S.' withdrawal in 2018 and re-imposition of sanctions on Iran, the other signatories have tried to keep the pact alive but Iran, and the U.S., haven't made it easy.
The U.S. has been ready to impose secondary sanctions on any company, including European ones, doing business with Iran. Tehran's commitment to the deal was shaken after the U.S.' withdrawal and it has pressured the remaining signatories to help it to circumvent U.S. sanctions. Iran has disengaged from the conditions of the deal and announced that it was to restart uranium enrichment activities. Last September, the EU's foreign policy chief Federica Mogherini admitted that preserving the pact was "increasingly difficult."
Holger Schmieding, chief economist at Berenberg, told CNBC Tuesday that he feels the Iran nuclear deal "is largely dead as Iran feels no longer bound by it," and that limits Europe's influence over both Iran and the U.S.
"As Trump does not listen to allies, Europe's role is very limited in the region. Europe is mostly a bystander, having to grapple with the potential fallout of instability in the region without being able and willing to influence events much," he said. Neil Dwane, global strategist at Allianz Global Investors, echoed that perspective and told CNBC that he too thought the deal was dead.
"I think (the deal) is dead in the water but that's probably because I don't trust Iran anyway … They'll say one thing with one hand and move on," he noted. "To me it (the deal) felt like a minimal way to keep Iran inside the international system."
He noted that one of the tensions between Europe and the U.S. over Iran was that "Europe, and particularly France, has wanted to open up Iran as a new market and suddenly if they don't get compliance (with the nuclear deal) and America can drive a wedge, Europe will have to choose — do you pull out of Iran or not?"
Since Soleimani's death, Iran has issued conflicting statements over the nuclear deal. On Sunday, it said it would abandon limitations on enriching uranium but Iran's Foreign Minister Javed Zarif also said Iran could comply again with the deal upon what he called the "effective implementation of reciprocal obligations" and said it would continue to cooperate with the United Nations' nuclear watchdog, the International Atomic Energy Agency.
That statement was echoed on Tuesday with a senior Iranian official on Twitter, and quoted by Reuters, saying that Iran is "ready to come back to full compliance" in the JCPOA (Joint Comprehensive Plan of Action) without detailing any conditions.
Nonetheless, European ministers are showing signs of weariness and distrust toward Iran now and appear to be considering triggering a dispute resolution process, according to France's foreign minister, which could eventually result in UN sanctions being placed on Tehran.
French Foreign Minister Jean-Yves Le Drian said Monday that "the repeated violations leave us today asking about the long-term validity of this (nuclear) accord. We are considering launching the dispute mechanism resolution ... We will take a decision in the coming days." The EU's 28 foreign ministers are scheduled to hold an emergency meeting on Friday although the decision to trigger the dispute mechanism could come earlier.
On Monday, von der Leyen said that the EU was "deeply concerned by Iran's announcement that it will not respect the limit set by the Joint Comprehensive Plan of Action any longer" and asked that "instead space is again created for diplomacy."
"From a European viewpoint, it is important for Iran to return to the nuclear deal. We have to convince Iran that it's also in its own interest," she said.