On Iran deal, Merkel cautious about compensation for companies

German Chancellor Angela Merkel signalled on Thursday that it won't be feasible to offer wide-ranging compensation to European companies affected by United States sanctions over Iran's nuclear programme.

President Donald Trump last week withdrew the US from the 2015 Iran nuclear deal, but European signatories vowed to salvage it.

Merkel said, after EU leaders met in Bulgaria, that "all European Union member states still stand by this agreement".

But she was cautious about possible compensation for companies that do business with Iran.

"We can see whether we can give small and medium-size companies certain relief. That is being examined," she said

However, "as for compensating all businesses in a comprehensive way for such measures by the United States of America, I think we cannot and must not create illusions," Merkel added.

In an effort to keep Iran in the deal, the EU's executive commission announced that it will start work on revising a so-called blocking regulation that was drawn up in 1996 in response to the fallout from US sanctions on Cuba, and on Libya and Iran.

The measure has never been used, but in essence it bans companies from respecting American sanctions where those sanctions might damage EU interests, notably trade and the movement of capital.

For the blocking regulation to be used now, it would have to be updated to include US nuclear-related sanctions against Iran. This would take time, and runs the risk that any one of the 28 EU member countries could block the move.

The EU is also ready to allow the European Investment Bank to help companies invest in Iran. On top of that, the EU's energy commissioner is heading to Tehran for talks on boosting energy cooperation.

French President Emmanuel Macron said his country - along with Germany, one of the EU's leading economies - won't get into a trade war against the US over Iran.

"We're not going to choose one camp over another," he told reporters after the summit in Sofia.

Commenting on a decision by French oil and gas group Total to stop a multibillion-dollar project in Iran unless it is granted a waiver by US authorities, Macron said he wants to provide all guarantees for businesses that want to stay in Iran to be able to do so.

But "we're not going to impose on French businesses to stay in Iran," he said. "The president of the French Republic is not the CEO of Total."

Macron said he was convinced the US decision will benefit Russian and Chinese companies in Iran.

- AP