Bolton Says Iran Will Be Squeezed ‘Until the Pips Squeak'

(Bloomberg) -- The U.S. intends to double down on sanctioning Iran, pressuring the nation until it submits, National Security Adviser John Bolton signaled on Tuesday.

“We think the government is under real pressure and it’s our intention to squeeze them very hard,” Bolton said Tuesday in Singapore. “As the British say, ‘squeeze them until the pips squeak’.”

Iran’s vital oil exports have been under sanctions since Nov. 5 as the Trump administration ratchets up pressure on the Islamic Republic. Even before the latest penalties were reintroduced, the U.S. economic offensive had triggered a collapse in the value of Iran’s rial currency, pushing up prices and emptying some shelves of essential goods.

The U.S. in May withdrew from the 2015 multinational nuclear deal that lifted curbs on Iran’s economy, vowing to force Tehran back to the table to negotiate a new accord limiting its regional and military power. President Donald Trump’s campaign has been enthusiastically backed by U.S. allies in the Gulf that oppose Iran.

European signatories to the deal are attempting to put in place mechanisms to allow trade and investment with Iran to continue, as Iranian officials warn that their country won’t stay bound by an agreement that isn’t delivering benefits.

Bolton suggested the Europeans would fail and rethink their approach.

“I like to compare the attitudes that are changing in Europe to a book written years ago in the U.S. called ‘The Six Stages of Grief’,” Bolton said as he attended a regional summit. “It starts off with denial. Then it ends up at acceptance.”

Oil sanctions are likely to drive Iran’s economy into recession starting in 2018, deepen its fiscal shortfall and triple inflation from last year, the International Monetary Fund said in a regional economic outlook released on Tuesday.

The Trump administration says its economic assault on Iran is aimed at forcing the Islamic Republic’s leadership to diminish its role in some of the Middle East conflicts. Iranian officials, however, say the “economic war" is meant to push ordinary Iranians into revolt against their leaders.

In its latest assessment, international monitors said Iran continued abiding by nuclear limits in the landmark accord.

The International Atomic Energy Agency said Iran is still allowing intrusive inspections while keeping its nuclear capacity and material below thresholds allowed under the July 2015 deal, according to a 5-page restricted report published Monday and seen by Bloomberg News.

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