Last updated: 18 June, 2014

Iran economy in distress despite sanctions relief

US Treasury Secretary Jacob Lew said Wednesday Iran’s economy remained in a “state of distress” despite limited sanctions relief, as world powers sought a nuclear deal with the Islamic republic.

“Iran sanctions are the toughest the world community has imposed on any country and its economy is suffering a serious blow as a result –- an impact that is not being reversed,” Lew said at a meeting in Jerusalem of the Joint Economic Development Group (JEDG).

“As we approach the last month of the agreed upon period for negotiations, Iran’s economy remains in a state of distress that brought the government to the negotiating table in the first place,” he said, according to a statement.

Nuclear negotiators from Iran and six world powers got down to business Tuesday in Vienna, seeking to strike a momentous deal before a July 20 deadline but with significant differences still to bridge.

The hugely complex accord would see the Islamic republic scale down its nuclear programme to ease concerns that it wants atomic weapons — something Iran has long denied.

In return Iran is demanding a lifting of all UN and Western sanctions that are hitting its vital oil exports, clogging up its financial system and causing major economic problems.

The parties have set themselves a deadline of July 20, when an interim deal struck in November expires, and many experts believe an extension is already being talked about.

“During the same six month period, Iran is losing a significant amount in oil sales alone from the sanctions that remain in place, more than the value of the temporary relief,” Lew said.

“This sustained pressure gives us the opportunity to pursue a negotiated agreement with Iran, in conjunction with our P5+1 partners (Britain, Russia, France, China and Germany), that will assure the international community that Iran’s nuclear programme is entirely peaceful.

“Make no mistake: we will not allow Iran to obtain a nuclear weapon.”

Iran’s arch foe Israel has opposed negotiations with the Islamic republic.