Iran Withdraws $75 Billion from Europe
June 16th, 2008Via: Reuters:
Iran has withdrawn around $75 billion from Europe to prevent the assets from being blocked under threatened new sanctions over Tehran’s disputed nuclear ambitions, an Iranian weekly said.
Western powers are warning the Islamic Republic of more punitive measures if it rejects an incentives offer and presses on with sensitive nuclear work, but the world’s fourth-largest oil exporter is showing no sign of backing down.
“Part of Iran’s assets in European banks have been converted to gold and shares and another part has been transferred to Asian banks,” Mohsen Talaie, deputy foreign minister in charge of economic affairs, was quoted as saying.
Iranian officials were not immediately available to comment on the report in Shahrvand-e Emrouz, a moderate weekly, which did not specify the time period for the withdrawals which it said were ordered by President Mahmoud Ahmadinejad.
“About $75 billion of Iran’s foreign assets which were under threat of being blocked were wired back to Iran based on Ahmadinejad’s order,” the weekly said.
Iran’s Etemad-e Melli newspaper, also quoting Talai, last week also reported the country was withdrawing assets from European banks but did not give any figures.
So where can they put those assets now? Russia? China? The battle lines get a little clearer.
anothernut…you’re right, one paragraph in the article mentions “part of Iran’s assets in European banks have been converted to gold and shares and another part has been transferred to Asian banks”
We should keep in mind that Iran is not just protecting its money. Withdrawing this kind of cha-ching all at once is effectively kidney-punching the banks and investment houses where those assets were being held. At a time when few banks appear to have even a semblance of the depositary assets they should show to cover their loans, this kind of move ought to be giving heart-palpatations to the whole financial sector. Could it even trigger another bank failure? Who knows.
Also, I’d speculate that Iranian financial officials had probably been leaning hard on those EU bankers before now to plead their case in government (under threat of withdrawing assets). So obviously they weren’t getting anywhere on that front. Which probably speaks to how flimsy any of Iran’s political overtures to the EU have been to this point.
And lastly, while punishing the European financial firms, they are also evidently rewarding Asian ones. While that’s no surprise, it does show that Asia is clearly where the Iranian bread is being buttered. (I still don’t believe the US politicians will directly attack Iran–it’s just too overtly foolish in every way–but, if they did, Chinese officials would have an open door to re-patriate Taiwan, and probably would seize it within a years time.)