Discussions about concrete proposals for more stringent sanctions against Iran are underway in Brussels in advance of the October 15 meeting there of the 27 EU foreign ministers.

The Jerusalem Post has learned that Britain, the Netherlands, Germany, France and Italy have all put forward recommendations for stiffening the sanctions regime.

Among measures being considered are closing existing loopholes that would make it more difficult to work with Iran’s central bank, banning flights by Iran Air, adding to the list of Iranian companies that would be blacklisted and taking further measures against Iran’s energy sector.

The foreign ministers of Britain, France and Germany sent a letter last month to their colleagues saying the EU must let Iran know it has not exhausted its sanctions options. The letter also called for decisions to be made at the October 15 meeting.

Diplomatic officials said that Israel is pushing hard for stepped-up sanctions.

The internal EU discussion over sanctions has been characterized as “difficult” because the punitive measures are taking place in the midst of the euro crisis.

According to one school of thought, if the EU – despite its own economic crisis and the significant trade it does with Iran – does indeed ratchet up sanctions at a price to its own economic well-being, then this would send a powerful message to Tehran.

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The sanctions issue will certainly come up later this month when the Italian cabinet, including Prime Minister Mario Monti, comes to Israel for an annual government-to-government meeting. Prime Minister Binyamin Netanyahu is scheduled to lead his cabinet to Germany in December for a similar meeting with the German government.

The talk of enhanced EU sanctions comes as three rounds of talks since April between the world powers known as the P5+1 – the US, Russia, China, Britain, Germany and France – and Iran have led nowhere, and as the Iranian economy is being badly battered by existing sanctions.

Despite the looming economic storm, Iranian President Mahmoud Ahmadinejad said on Tuesday that his country has been able to cope with Western economic sanctions and the central bank has supplied enough hard currency to finance imports, even though the sanctions have cut Tehran’s oil earnings.

Ahmadinejad was speaking after the Iranian rial plunged to a record low against the US dollar earlier in the day. The currency lost about a third of its value in the past week, as panicking Iranians scrambled to change their savings into hard currency to escape high inflation and further depreciation.

Iran’s imports totaled $26 billion in the first half of this year, down only moderately from $29 billion in the same period last year, Ahmadinejad told a news conference.

“The central bank has provided all the currency for these imports,” he said.

Ahmadinejad said the country’s enemies were waging a “psychological war” against it.

“Enemies have managed to reduce our oil sales but hopefully we will compensate for this.”

Many businessmen and ordinary citizens in Iran blame the government for the currency crisis, and Ahmadinejad has been criticized for it by political enemies in parliament.

The rial has been depreciating for over a year and has lost about two-thirds of its value since June 2011. Its losses have accelerated in the past week after the government launched an “exchange center” to supply dollars to importers of some basic goods; businessmen have complained the center has failed to meet demand for dollars.

Ahmadinejad defended his economic record on Tuesday, saying a phase-out of food and fuel subsidies that he launched in 2010, which has boosted the official inflation rate to around 25 percent, had been successful.

“What is the subsidy reform? We are taking from the pockets of those who consume more to give to those who consume less,” he said.

Reuters contributed to this report.

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