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Pro-Europe Ukrainians march as Kiev balances Moscow and Brussels

Days after Ukraine announced it was freezing its association agreement with the EU under pressure from Russia, tens of thousands took to the streets.

Iran and six world powers struck a historic deal Sunday morning to temporarily halt Iran’s nuclear program, hoping it will pave the way for a comprehensive agreement in six months that would render Iran incapable of building an atomic bomb.

The deal is the first significant slowdown of Iran’s nuclear program in nearly a decade. But it also marks another milestone already impacting the Middle East: A first concrete test of the ability of Iran’s new centrist President Hassan Rouhani to fulfill his promise to end both “extremism” at home and nearly three decades of Iran’s isolation abroad by reaching out to the West – changes that could begin to fundamentally alter Iran’s global relations.

Both sides declared victory over the nuclear deal, struck on the fifth day of marathon talks in Geneva that brought together seven foreign ministers, including US Secretary of State John Kerry, and were brokered by the European Union’s foreign policy chief, Catherine Ashton.

A light-hearted tweet from one of Iran’s senior negotiators helped break the news: “Day Five. 3am. Talks. White smoke,” tweeted Deputy Foreign Minister Seyed Abbas Araghchi.

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The accord gives Iran up to $7 billion in sanctions relief in exchange for curtailing uranium enrichment and other steps to prevent expansion of its nuclear program. It is the first fruit of nearly two years of negotiations between Iran and the P5+1 group (the United States, Russia, China, Britain, France, and Germany).

In Washington, President Barack Obama hailed the deal as “significant and tangible,” saying that “diplomacy opened up a new path to a world that is more secure.” Mr. Obama has faced fierce criticism over any deal from a hawkish Congress preparing new sanctions measures, the pro-Israel lobby, and US allies Israel and Saudi Arabia, which fear a resurgent Iran.

In Tehran, Mr. Rouhani said the “enemy [failed] to promote Iranophobia,” and that the world “came to understand that respecting the Iranian nation would bear results.” Rouhani drew support from family members beside him of assassinated nuclear scientists, and wrote a letter of congratulations to Iran’s Supreme Leader Ayatollah Ali Khamenei – whose “victory” in the talks was hailed on Iranian state TV. 

The deal is “very significant because it puts more time on the proverbial nuclear clock, while at the same time each side can go back and declare victory,” says Ali Vaez, the senior Iran analyst of the Brussels-based International Crisis Group.

“This in itself will result in the two sides being able to preserve this positive momentum, which is absolutely necessary for negotiating the comprehensive agreement, and for safeguarding the process from outside pressure, and from pressure from skeptics,” said Mr. Vaez in Geneva.

Political risks for everyone

Those skeptics about “victory” abound on both sides. The agreement presents serious political risks for the Iranians, who have paid a high price in cash and through harsh sanctions to create a sophisticated nuclear infrastructure. Rouhani will face criticism from hardliners who say Iran gave away too much, even though the deal leaves intact and working much of Iran’s nuclear infrastructure, though at a lower level.

The US and leaders from the other P5+1 countries also face pressure, as they have vowed that Iran will never get the bomb. Iran says it has no ambition to do so, and that this deal is a first step to prove it.

Iranian Foreign Minister Mohammad Javad Zarif said Sunday’s deal was an “opportunity to end an unnecessary crisis and open new horizons, based on respect for the rights of the Iranian people, and the removal of any doubts about the exclusively peaceful nature of Iran’s nuclear program.”

He also said that the agreement explicitly recognized twice that Iran had a right to enrich uranium in any final deal, a years-long sticking point. 

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The text of the four-page deal published by Fars News Agency states clearly that the final deal “would involve a mutually defined enrichment programme with practical limits and transparency.” 

Kerry, however, said that “this first step does not say that Iran has a right to enrichment. No matter what interpretive comments are made, it is not in this document. The scope and role of Iran’s enrichment, as is set forth in the language within this document, says that Iran’s peaceful nuclear program is subject to a negotiation and to mutual agreement. And it can only be by mutual agreement that enrichment might or might not be able to be decided on in the course of negotiations.”

The deal comes within the first 100 days since Rouhani’s initial cabinet meeting, a three-month period that has seen a substantial change in tone in Iran’s relations with the US – mutually hostile since Iran’s 1979 Islamic revolution and the seizing of the US embassy and subsequent 444-day hostage crisis.

Since September, Rouhani and Zarif have tag-teamed on an Iranian charm offensive, trying to replace the unhappy memory of the bombastic former President Mahmoud Ahmadinejad with one of “new rationalism.” Initial unprecedented public contact between top US and Iranian officials during the UN annual meeting in New York led to a historic, 15-minute phone call between Obama and Rouhani.

Those events were aided by a series of secret face-to-face meetings between US and Iranian officials in the past year, conducted largely in Oman, the Associated Press reported.

This nuclear deal – which its proponents say eases the prospect of war, and partially fulfills Rouhani’s pledge to ease economic pain by paving the way for easing of sanctions that have stung Iran’s economy  – could well give a further boost to Rouhani’s political fortunes.

“We really can’t overstate how remarkable this has been,” says Reza Marashi, a former State Department Iran staffer who is now at the National Iranian American Council, a group that has campaigned against sanctions.

“Six months ago, pretty much any Iran analyst would have told you that this is not possible; not that diplomacy couldn’t succeed, if it was truly tried, but that neither side was willing to take the risks necessary to create a peaceful solution,” says Mr. Marashi. “And what a difference an Iranian president can make.”

“In return, we have to ask: What are the Iranians really getting?” says Mr. Marashi in Geneva, ticking off “very modest sanctions relief, access to their own money” – some cash from oil sales that is frozen in accounts outside Iran – and wording that Iran’s nuclear “rights” would be respected. “So I think the Iranians right now are willing to lose small in order to win big, and the ‘win big’ part that they’re looking towards is the endgame – and I think the US is cognizant of that fact.” 

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Mr. Kerry said this morning the ultimate goal was a comprehensive, “fail-safe” deal six months from now that would virtually erase Iran’s future chances of getting a bomb, thereby benefiting everyone in the region, including Israel.

Kerry said the benefits instead favored the US and P5+1, because this first step “actually rolls back the program from where it is today, enlarges the break-out time – which would not have occurred, if this agreement did not exist. It will make our partners in the region safer; it will make our ally Israel safer.”

Israeli Prime Minister Benjamin Netanyahu begged to differ, repeating his claim today that the deal is a “historic mistake” that “made the world a much more dangerous place.” Two weeks ago he said caustically that such an agreement would be the “deal of the century for Iran.”

When asked about opposition to the deal from Israel and Saudi Arabia – both staunch rivals of Iran for decades – Mr. Zarif said “the agreement is geared toward solving a problem that has had its shadow cast over the entire world and over our region, so I cannot see any – any – justification whatsoever to be concerned.”

Key bargaining chip

The temporary deal requires Iran to halt all its uranium enrichment at 20 percent purity – Iran’s most sensitive nuclear work, which is a few technical steps away from bomb-grade – and convert its 200-kg stockpile into oxide for fuel that is unsuitable for weapons.

That bargaining chip was one of Iran’s most valuable, though Iran always said its purpose was to fuel Iran’s small Tehran research reactor.

That means, said Kerry, “that whereas Iran today has about 200 kg of 20-percent enriched uranium, that could readily be enriched towards a nuclear weapon, in six months Iran will have zero.”

Yet Iran is able to continue enriching uranium to below 5 percent purity – which is usable for reactor fuel – though not to increase its sizable stockpile of that material. Iran can continue work at its two primary enrichment facilities, even though the P5+1 had originally demanded that a small, deeply buried one at Fordow be shuttered.

But those facilities will now be subject to daily, instead of weekly, inspections, with video monitoring, and there will be new access to centrifuge production locations. 

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For the half-year time frame of the deal, Iran agrees not to add to the 19,500 or so centrifuges it has already installed, nor to turn on any of the roughly 11,000 of those not yet operating.

Iran will also stop building fuel assemblies for the Arak heavy water reactor, which is still under construction, effectively adding another six months to the two-year minimum time that it would take for that reactor to be finished and yield enough plutonium for a bomb, even if Iran had a facility to reprocess it. 

Building can continue, but no critical components – which are currently missing – can be installed.

“For the Iranian government, it is their responsibility to recognize that this first phase [deal] is a very simple test,” said Kerry. “Folks, it is not hard to prove peaceful intent, if that’s what you want to do.”

A big step for Iran

Zarif said the deal was an achievement for Iran, because it avoids any new sanctions for six months, will yield access to some proceeds that are currently frozen from oil sales, and ease sanctions on precious metal and petrochemical exports, and on car and airplane parts.

A “humanitarian corridor” will also be set up, enabling items that are not sanctioned – such as medical and agricultural goods, and food – to more easily get through strict banking restrictions. Some $400 million in government-assisted tuition costs will also be allowed to be used for Iranian students abroad.

Senior US officials in Washington – clearly wary of a backlash from critics – portrayed the deal as a win, saying it extracted “very important concessions,” including steps that “halts Arak in its tracks” and yields “much more extensive monitoring than we have today.”

The total value of incentives was a “modest and reversible” $6 billion to $7 billion in sanctions relief, which US officials described as a “fraction” of the value of losses to Iran because of the remaining sanctions, which are to be “vigorously” enforced. 

 In this first-step accord, the core US and EU sanctions would not be touched on oil and banking. Oil sanctions alone during the same six months will cost $30 billion. 

Briefing Iranian journalists after the Geneva signing, Zarif emphasized that Iran had not given up any of Iran’s nuclear rights, and in fact preserved all of them – including enrichment.

Zarif said Iran hoped to “restore lost confidence” with the deal, and end this “unnecessary and rather sad chapter.”

Large numbers of pro-European Union demonstrators rallied in downtown Kiev for a second day Monday. They clashed violently with police and vowed to remain on the streets at least until Nov 29, the last possible date for Ukraine to sign a now-aborted Association Agreement with the EU.

The protesters, who’ve been bused in from many other Ukrainian cities as well as Kiev, have been joined by several major opposition figures, including world championship boxer Vitaly Klitschko and the head of jailed opposition leader Yulia Tymoshenko‘s movement, Arseniy Yatsenyuk.

“People have come from all over Ukraine to protest the decision of the government to curtail the process of integration with Europe. There is a threat that Ukraine will not sign the association agreement, although we hope it’s still possible,” says Olga Bodnar, a parliamentary deputy with Ms. Tymoshenko’s bloc.

She says public opinion polls show a vast majority back the idea of joining the EU track, while the alternative of joining a Russian-led customs union enjoys much less popular support.

“We plan to continue until Friday [the day the EU agreement was to have been signed]. This is not just an action by the Ukrainian opposition. It has the support of ordinary people,” Ms. Bodnar says.

Kiev police estimated Sunday’s crowd at 50,000, but journalists on the scene said it was probably much larger. Monday’s rally saw significantly smaller numbers.

But these are the biggest public protests since the Orange Revolution nine years ago, which knocked Ukraine out of Moscow‘s orbit and put it onto a fast track toward membership in NATO and the EU under a new pro-Western president, Viktor Yushchenko.

Mr. Yushchenko’s efforts became mired in corruption and political indecision. He left office amid political defeat, and Ukraine’s other pro-Western champion, Tymoshenko, was narrowly topped in presidential polls by the more pro-Russian Viktor Yanukovych almost four years ago.

Since then, Ukraine has gone some distance toward repairing ties with Russia, its biggest single trading partner and vital supplier of energy, but even Mr. Yanukovych has balked at joining Moscow’s customs union project, which aims to transform itself into a full-fledged competitor to the EU called the Eurasian Economic Union by 2015.

Writing in the Financial Times Sunday, former President Yushchenko warned that Ukraine is in danger of being dragged into a neo-Soviet empire that would keep it permanently out of the European mainstream.

“Russia is, at the moment, looking to restore the Soviet model through innocuous-sounding projects such as the ‘customs union’ and the ‘common economic space’. But these structures have nothing to do with economic integration and hardly qualify as partnerships…. They have only one aim: pass sovereignty to Russia and destroy competitive industries in the neighborhood,” he wrote.

But despite all the headlines that suggest Ukraine’s decision not to sign the EU agreement this week means that Russia has triumphed in the tug-of-war over its giant Slavic neighbor, experts say nothing is final.

“This is not a change of course on the part of Ukrainian authorities, it’s just a pause [on the way to EU integration],” says Dmitry Vydrin, an independent Kiev-based political expert. “Many people understand it as a halt, or change of direction, and the opposition is taking advantage of this to improve its political prospects. But it’s just wrong. The authorities will go on with the same course.”

Ukraine’s government, which is skating dangerously on the brink of bankruptcy, complained that the EU deal offered little in the way of immediate financial relief, while Russia was threatening toimpose massive trade sanctions if Ukraine chose the Western path. The country’s public debt is rated “junk,” and it owes at least $1.3 billion to Russia’s state monopoly Gazprom in unpaid gas bills.

The EU’s insistence that Kiev release imprisoned opposition leader Tymoshenko as a condition of admittance to the EU zone was another serious sticking point, experts say.

“Yanukovych faces a re-election fight in 2015, and doesn’t want to be humiliated by having to let Tymoshenko go, which is like saying the charges against her were false,” says Sergei Strokan, a foreign affairs columnist with the Moscow daily Kommersant.

Tymoshenko was sentenced to seven years in prison in 2011 for “abuse of power” during a previous stint as prime minister. Ironically, her crime was to negotiate a gas supply deal with then-Russian Prime Minister Vladimir Putin that allegedly harmed Ukraine’s interests.

Ukrainian Prime Minister Mykola Azarov told Russian media that the $1.4 billion in compensation being offered to Ukraine to help upgrade its industries to EU standards was nothing more than “helping a beggar.” He also denied reports carried on Ukrainian TV that Russia had offered Kiev $20 billion if it declined to sign the EU accord.

But Mr. Azarov told journalists Sunday that since Ukraine declined to sign the EU deal, Moscow has indicated that it might take another look at Ukraine’s gas contract with Gazprom, which Kiev says imposes unfair prices. “We have been persistently trying to persuade the Russian Federation to review the contract. Now, generally speaking, there is such a pledge,” Azarov said.

In another interview Monday, Azarov suggested that Ukraine might be ready to sign the EU accord later, perhaps in as little as six months from now.

Experts say that Ukrainian authorities do not feel ready at this moment to join an EU free-trade zone, and just want more time to negotiate the terms.

Ukraine’s indecision does not mean it’s ready to sign up with the Russian-led customs union, says Fyodor Lukyanov, editor of Russia in Global Affairs, a leading Moscow-based foreign policy journal.

“I hope there is no one in Moscow who imagines that Ukraine chose Russia when it decided not to go ahead with the European option,” he says.

“That didn’t happen. What happened was that Ukraine, once again, kicked the can down the road, because any definitive choice at this moment would be destructive for Ukraine. They have postponed the European choice, but they’ll probably continue to resist joining the Russian-led customs union.”