Europe Failed to Support Iran’s IMF Loan Request

EghtesadOnline: President Hassan Rouhani told Germany’s new ambassador on Tuesday said that Iran expected the three European Union countries signatory to the landmark nuclear deal to support its loan request from the International Monetary Fund.

News ID: ۷۵۱۱۵۴

01 October 2020

In March the Tehran government asked the IMF for $5 billion in emergency loans to help it combat the coronavirus and mitigate its economic impact. The request was denied due to US pressure.

Rouhani said Iran had expectations that the EU3 -Germany, France and the UK - would resist US pressures and help it receive the loan to meet its medical, health and pharmaceutical needs amid the Covid-19 spread, president.ir reported.

Although the IMF executive board had agreed to Iran’s request, the US under Donald Trump lobbied to block the loan, Rouhani noted.

"Of course the Islamic Republic of Iran expected the three European countries to stand up to US pressures to [help] meet the medical and health needs of the Iranian people with the loan," Rouhani said.

Highlighting long-standing and friendly relations between Tehran and Berlin, he added that bilateral economic and trade relations should grow irrespective of the illegal US restrictions.

The incoming German envoy Hans Odo Motzel said Berlin is duty-bound to safeguard the nuclear deal, officially known as the Joint Comprehensive Plan of Action (JCPOA).

On the need to enhance two-way cooperation in the existing tough conditions, Motzel said he would do his utmost to that end during his time in Tehran.

Iran was among the first countries to apply for emergency coronavirus aid under the Rapid Financing Instrument (RFI) program.

The Governor of Central Bank of Iran Abdolnasser Hemmati earlier urged the IMF chief Kristalina Georgieva to uphold the lender’s mandate, warning that denying Iran the loan would undermine IMF policy of impartiality.

He reiterated that the loan would be used for humanitarian goods, namely medicine and medical equipment.

“We believe that the humanitarian dimension of this crisis should be our guiding principle. The RFI covers financing food and medical supplies that are urgently needed to save lives and prevent spread of the virus,” Hemmati said.

While most countries are members of the IMF and have voting powers, the US is the largest shareholder and can influence the fund’s decisions.

As a country hit the hardest by the pandemic in Middle East, Iran has so far reported about half a million Covid-19 cases since the beginning of the outbreak in February. The deadly disease has cut short 26,000 lives as it spreads destroying lives and livelihoods.