DUBAI — Iran will surpass the internationally agreed limit on its low-enriched uranium stockpiles in 10 days, the country’s atomic energy body said Monday.
A spokesperson for the Iranian Atomic Energy Organization said that the country would increase enrichment levels to 20% — significantly closer to weapons-grade material — for use in local reactors, but emphasized that Europe still had a chance to rescue the 2015 nuclear deal if its remaining signatories found a way to shield the Islamic Republic from the crippling effect of U.S. economic sanctions.
“We have quadrupled the rate of enrichment and even increased it more recently, so that in 10 days it will bypass the 300 kilogram limit,” Iran’s Atomic Energy Organization spokesman Behrouz Kamalvandi said on state TV, as quoted by Reuters. “There is still time … if European countries act.”
Iran would be exceeding its internationally-agreed enrichment cap of 3.67%, which is the amount allowed for civilian nuclear power development. Weapons-grade enrichment is 90%, but according to nuclear experts, reaching 3 to 4% enrichment equates to roughly two-thirds of the work done toward that 90% figure, as any increases beyond that seemingly small amount disproportionately speeds up breakout time.
Tehran is threatening to roll back its obligations under the nuclear deal a year after the Trump administration withdrew from it and reimposed punishing sanctions on the Iranian economy, most significantly its oil sector, the country’s largest source of revenue.
The nuclear agreement, officially known as the Joint Comprehensive Plan of Action (JCPOA), was meant to offer Iran financial relief from sanctions in exchange for curbs to its nuclear program and was signed under the Obama administration along with the U.S., France, Germany, the U.K., Russia and China.
The deal’s non-U.S. signatories opposed the Trump administration’s withdrawal and have pledged to keep the deal alive, even going so far as creating a special-purpose vehicle that could facilitate trade with Iran while skirting U.S. secondary sanctions.
Iran’s Atomic Energy Organization spokesman said Monday that European leaders needed to “act, not talk.”
Hurtling toward conflict?
A rapid escalation in tensions has stoked fears of impending conflict between the U.S. and its Gulf allies and the Islamic Republic, though both sides say they don’t want war. Washington has ramped up its military presence in the region, with additional aircraft carriers, bomber tank forces and planned deployments of thousands more troops. A slight miscalculation or miscommunication, many believe, could risk sparking all-out conflict.
European leaders react
The U.K. government reacted to Iran’s announcement Monday, warning that it would consider “all options” in response to a breach of the 2015 deal.
“We have been clear about our concern at Iranian plans to reduce compliance with the JCPOA,” a spokesman for U.K. Prime Minister Theresa May said. “Should Iran cease meeting its nuclear commitments, we would then look at all options available to us.”
A German Foreign Ministry spokeswoman urged Iranian leaders to uphold the deal.
European foreign ministers have been urging restraint and have not yet made their conclusions as to who was behind the tanker attacks of the previous week, though U.K. Foreign Minister Jeremy Hunt said last week that Iran’s military was “almost certainly” responsible.
Iranian President Hassan Rouhani, meeting with France’s new ambassador to Iran in Tehran, said, “The current situation is very critical and France and the other parties to the (deal) still have a very limited opportunity to play their historic role for saving the deal.”
“There is no doubt that the collapse of the (agreement) will not be beneficial for Iran, France, the region and the world.”
Spain needs to be a ‘motor for growth’ in Europe, vice president says
Spain is the latest European country to have a new coalition government after a period of political stalemate and uncertainty and the left-wing government will aim to focus on growth policies and addressing inequalities, the country’s vice president told CNBC.
“I’m extremely happy that we finally have a government, it took quite some time, it was not an easy time but we finally have a coalition government in Spain,” Nadia Calviño, one of four vice presidents in Spain, told CNBC’s “Squawk Box Europe” Wednesday.
“We are very clear about a continuity message. In the past 19 months, we have followed a policy based on three lines: fiscal responsibility, social sensitivity and structural reforms and these will be the three main guiding lines for us also in the coming years,” she said.
The coalition is made up of Prime Minister Pedro Sanchez’s party, the Spanish Socialist Workers’ Party (PSOE) and Unidas Podemos, a group of left-leaning parties led by Pablo Iglesias, who is known for his anti-austerity stance.
The joint government came about after Sanchez won snap elections in April and November 2019, but fell short of a majority and struggled to form a government. The inconclusive vote last fall led to the formation of this current minority coalition government, however, and it very narrowly won a parliamentary vote earlier this month.
As a minority coalition, the government will likely have to rely on smaller regional parties to pass laws. However, this could lead to political instability in Spain’s already fragmented political system.
Still, Sanchez and Iglesias (who is also a vice president) have some shared goals including plans to roll back some 2012 labor reforms under the previous Conservative government that supporters said make Spain more competitive, but whose critics say make many jobs more precarious. They have also signaled that they could increase taxes on higher earners and companies.
Speaking to CNBC at the World Economic Forum in Davos, Calviño recognized that a coalition government meant striking a balance between the different party approaches but said “the basic lines are common, are shared.”
“What we have signed with Podemos is a governing agreement which is very clear about striking the right balance of continuing growth, pursuing entrepreneurship, pursuing those reforms that we have been launching in the last few months and, at the same time, having a deep focus on addressing inequalities,” she said.
The European Commission forecast in November that Spain’s gross domestic product would expand 1.5% in 2020 and 1.4% in 2021, moderating a more robust trend seen in recent years. By comparison, the country’s GDP growth was 2.4% in 2018 and 1.9% in 2019.
There has been pressure on economies like Germany, seen as the euro zone’s growth driver and one which runs a large budget surplus, to spend more money in order to stimulate the wider sluggish European economy. But Calviño said every country has to look at its own policies to boost growth.
“Spain has been registering very strong growth for the past five years,” Calviño said. “We closed down last year in a slowdown environment, still at around 2% year-on-year growth, so Spain is one of the four larger economies (in the EU) and we need to play our part to be one of the motors for growth,” she said.
“I don’t think we should focus just on one country doing that job, we all have to undertake our reforms and ensure that we have solid sustainable growth in the mid-run.”
‘We have it totally under control’
President Donald Trump told CNBC on Wednesday that he trusts the information coming out of China on the coronavirus as the Centers for Disease Control and Prevention confirms the first case of it in the United States.
“We have it totally under control,” Trump told “Squawk Box” co-host Joe Kernen in an interview from the World Economic Forum in Davos, Switzerland. “It’s one person coming in from China. We have it under control. It’s going to be just fine.”
The CDC on Tuesday said a Snohomish County, Washington state, resident who was returning from China on Jan. 15 was diagnosed with the Wuhan coronavirus, which has killed nine people in China and sickened hundreds more.
Trump told CNBC he believes that Chinese President Xi Jinping and health officials there are going to continue to tell authorities around the world everything they need to know about the virus.
“I do. I do. I have a great relationship with President Xi,” said Trump, addressing a question about whether he’s concerned about transparency in China. “The relationship is very good.”
This weekend, the CDC and Homeland Security began screening people traveling to major airports in California and New York from Wuhan, China, where the outbreak is believed to have started. Health officials have also confirmed cases in Thailand, South Korea, Japan and Taiwan.
The coronavirus evoked memories of the 2003 outbreak of severe acute respiratory syndrome in China. SARS, which killed nearly 800 people worldwide, hit Asian cities such as Hong Kong, Singapore, Taipei and Beijing the hardest and triggered a severe economic downturn in the region.
Coronaviruses are a large family of viruses that usually infect animals but can sometimes evolve and spread to humans. Symptoms in humans include fever, coughing and shortness of breath, which can progress to pneumonia.
— CNBC’s Berkeley Lovelace contributed to this report.
Trump says GDP, Dow would be higher if it weren’t for the Fed
President Donald Trump on Wednesday said that the U.S. economy’s GDP growth would have been closer to 4% if it weren’t for the lingering effect of Federal Reserve rate hikes.
“That was a big blip that should not have taken place. It should not have happened. But it’s one of those things. But we had Boeing. We had the big strike with General Motors. We had things happen that are very unusual to happen,” Trump told CNBC’s Joe Kernen in an interview from the World Economic Forum in Davos, Switzerland.
The president also suggested that the stock market would be even higher than its already record-setting highs if the Fed hadn’t raised rates so quickly before cutting them three times during 2019.
“Now, with all of that, had we not done the big raise on interest, I think we would have been close to 4%,” Trump said. “And I – I could see 5,000 to 10,000 points more on the Dow. But that was a killer when they raised the rate. It was just a big mistake.”
The president has repeatedly taken the Fed and its chair, Jerome Powell, to task for raising rates too quickly, in his view. Trump nominated Powell to the role in November 2017, and the Fed raised rates four times in 2018.
The president’s remarks Wednesday echoed those his top economic advisor, Larry Kudlow, made to CNBC on Tuesday, when he predicted 3% growth in U.S. gross domestic product in 2020.
“This is a long cycle, and what you’ve got here in the Trump years is essentially a mini upcycle,” Kudlow said Tuesday. “You’ve gone from 1.5% to 2% growth. We had it going at almost 4%, then the Fed tightened.”
Manufacturing and trade data released this month suggested the American economy ended 2019 on a strong note. The economy is expected to grow more than 2% in the fourth quarter. That would represent a slowdown from the 2.9% increase in 2018, and 2% growth would still suggest the decade-old expansion is set to continue into this pivotal election year.
The Trump interview came hours after the first full day of impeachment proceedings wrapped up in the U.S. Senate and a day after Trump gave a speech to the World Economic Forum in which he boasted about U.S. economic gains under his watch.
Several observers said the address sounded like a campaign speech as the president seeks reelection in November’s election.
From a policy standpoint, Trump stood firm on his use of tariffs in trade negotiations, particularly as his administration looks to follow its so-called phase one trade deal with China with a second-phase pact. This stance has made business leaders in Davos skeptical that the two nations would reach an agreement before Trump’s term is up in a year.
—CNBC’s Thomas Franck contributed to this article.
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