President Barack Obama announced on Monday a policy intended to shut down international transactions by the Bank of Iran, amid growing worries by Democrats that Iran’s nearly-complete effort to build a nuclear weapon will spark a war with Israel and an oil-price shock in the run up to the November election.
The executive order, which was made on Sunday, comes after more than three years of failed diplomatic outreach by Obama, including an inaugural-day offer to establish friendly relations with the Iranian theocracy.
“The [executive order] freezes all property of the Central Bank of Iran and all other Iranian financial institutions, as well as all property of the government of Iran … [and] underscore[s] the administration’s resolve to hold the Iranian regime accountable for its failure to meet its international obligations,” read a statement from the U.S Department of the Treasury, which will use its economic clout to enforce the shutdown.
“Iran now faces an unprecedented level of pressure due to intensified sanctions applied by the United States and complementary actions by many others around the world,” the statement continued.
The new sanctions are intended to stop Iran’s nuclear program by further crippling Iran’s economy, which is already reeling under extensive sanctions. However, the theocracy has given no indication that it would stop its nuke-building program.
Obama isn’t giving up hope the Iranians will change their nuclear ambitions. “My goal is to try to resolve this diplomatically, mainly because the only way over the long them we can assure Iran doesn’t have a nuclear weapon is by getting them to … understand that it’s not in their interest,” Obama said in a Feb. 5 MSNBC interview. (RELATED: Full coverage of the Obama presidency)
The bank shutdown may reduce the Israeli government’s worries about the nuclear program. On Feb. 2, for example, Israeli Defense Minister Ehud Barack said that the much-delayed international pressure on Iran may not stop the radical government from building nuclear weapons.
“Dealing with a nuclearized Iran will be far more complex, far more dangerous and far more costly in blood and money than stopping it today. In other words, those who say ‘later’ may find that later is too late,” Barak said at a conference in Israel.
Iran’s government, and its supreme leader, Ayatollah Ali Khamenei, have promised repeatedly to destroy Israel. “The Zionist regime is a true cancer tumor on this region that should be cut off,” Khameni declared Feb. 3, adding that “it definitely will be cut off.”
However, Israel’s leaders have repeatedly said they will defend their small country from Iran’s nuclear buildup.
Israel’s need to defend itself has created an election-year problem for the Obama administration, which doesn’t want an Iranian conflict to spike oil prices and further hinder the president’s re-election prospects. Obama’s outreach to Islamic governments in the Middle East has also sapped Obama’s weakening support among Jewish Americans in Florida, Pennsylvania and Ohio.
On Feb. 2, The Washington Post’s David Ignatius reported that “Defense Secretary Leon Panetta has a lot on his mind these days… but his biggest worry is the growing possibility that Israel will attack Iran over the next few months… [and] a likely spike in oil prices would have [a harmful impact] on the fragile global economy.”
Since 2008, Obama has signaled an eagerness to arrange a diplomatic deal with the Islamic government of Iran, despite widespread skepticism that Iran’s Islamic government could ever strike a deal with its ideological enemy, the United States.
At his inauguration, for example, Obama declared that “we will extend a hand if you are willing to unclench your fist.”
But neither Obama’s inaugural day offer, nor numerous follow-up efforts, have persuaded the Iranian theocracy to end its long-standing policies of attacking U.S., European and Israeli soldiers and civilian targets, undermining Arab regimes and seeking to develop a nuclear weapon.
Obama’s outreach effort even continued through the Iranian government’s successful suppression of the country’s freedom marches in 2009, and despite repeated Iranian-backed attacks on U.S. troops in Iraq.
During his outreach efforts, Obama withdrew troops from Iran’s neighbor, Iraq, and announced plans to withdraw U.S. troops from Afghanistan, which also borders Iran.
Despite military pullbacks and numerous diplomatic offers to Iran — including letters from Obama to Iran’s government — Obama’s deputies have repeatedly touted the administration’s line that it was gradually tightening economic sanctions on Iran.
Those sanctions have been undermined by periodic opposition from Russia and China, both of whom have an interest in trading with Iran. Both countries also gain when U.S. policy is hampered by Iranian opposition.