LEAD: Tehran warns EU embargo will have "serious consequences"

Jan 24, 2012, 14:48 GMT

Tehran - Tehran on Tuesday told the European Union it faces 'serious consequences' as a result of its decision to impose an embargo on Iranian oil, as the value of the national currency plummeted and the Foreign Ministry summoned the Danish ambassador.

'Iran condemns this EU move as illogical and unjustifiable and believes it will have serious consequences for Europeans,' the Foreign Ministry said in its first official statement since the decision taken by EU foreign ministers in Brussels on Monday. It did not clarify what such consequences would be.

The ministry also summoned the Danish ambassador, whose country currently holds the rotating EU presidency, as it accused the bloc of having adopted a 'hostile stance' towards Iran, according to the Fars news agency.

EU foreign ministers approved the embargo as a means to increase pressure on Iran over its disputed nuclear programme.

'The Iranian nuclear programmes are peaceful and solely for civil purposes,' the Foreign Mministry reiterated on Tuesday, adding that Tehran had been in 'constant cooperation' with the International Atomic Energy Agency (IAEA).

'Iran has no hesitation to further make all its nuclear programmes transparent,' the statement, carried by ISNA news agency, said, noting that the sanctions would not make Iran give up its nuclear rights.

However, a senior lawmaker and known critic of Iranian President Mahmoud Ahmadinejad argued that the sanctions could provoke a serious economic crisis.

'The value of the national currency (the rial) has been halved and there is no more investment in the market,' Ahmad Tavakoli told Mehr news agency.

Even before the approval of the embargo, the rial drastically lost in value. A weak currency tends to stoke inflation, which in Iran officially stands at 20 per cent but is believed to be nearly 50 per cent.

'The sanctions have an impact on the crisis, but wisdom could neutralize the crisis,' said Tavakoli, an economic expert and presidential candidate in 1993.

Meanwhile, in Vienna, Israeli Foreign Minister Avigdor Lieberman said the sanctions were a 'right step in the right direction,' but added that they were still not sufficient.

Speaking at a conference on the future of Europe, Lieberman warned that Iran could gain influence in Iraq and in other oil-rich countries of the region in the coming years, increasing its leverage in global energy markets.

Read more about Iran