Though the US Federal Reserve’s first interest-rate hike of 2023 is smaller than those that preceded it, policymakers have signaled that more increases are on the way, despite slowing price growth. But there is good reason to doubt the utility – and fear the consequences – of continued rate hikes, on both sides of the Atlantic.
There is a wise American saying: “If you are in a hole, stop digging.” The six governments that are currently considering the next steps to prevent Iran from developing a nuclear bomb – the five permanent members of the UN Security Council and Germany – should heed that advice. Otherwise, they could end up without any handle on the Iranian nuclear program, and only one – useless – option left, a military strike.
Yet the six governments seem determined to continue with what has been their strategy so far. Their condition for negotiating with Iran is a prior halt of its nuclear enrichment activities. Only in exchange for Iran’s permanent renunciation of enrichment will they provide major rewards – from lifting all sanctions and trade restrictions to security guarantees.
This strategy has not worked and will not work. Under the nuclear Non-Proliferation Treaty (NPT) of which Iran is still a member, countries are entitled to engage in enriching uranium for civilian purposes, and Iran claims that this is all it wants. True, Iran’s total halt of its enrichment program would be welcome, not least because its government has hidden these activities for almost two decades from Treaty inspectors, suggesting other than purely civilian motives.
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