Following a long-delayed green light from Italy, the EU is poised in the coming days to slap sanctions on one of Iran's most influential banks, in a move praised in Jerusalem as "very important." The Jerusalem Post has learned that at last Friday's meeting of the EU's Political and Security Committee (PSC) in Brussels, Italy removed its objection to placing Bank Melli, Iran's largest bank, on a list of Iranian institutions and personalities that the EU would boycott. Government sources said this was an early indication that new Italian Prime Minister Silvio Berlusconi seemed intent on steering a different Italian policy toward Iran. Up until Friday, Italy - Iran's largest trading partner in Europe - was the most vocal opponent to placing this bank on the list. Italy was joined in this opposition by Austria, Spain and Cyprus. Those countries, following Italy's lead, have now removed their objections as well. The addition of Bank Melli to the list is considered significant because this bank is one of the major vehicles through which business between Iran and the EU is channeled. The latest round of UN Sanctions against Iran - Security Council Resolution 1803, adopted in March - called for all states to "exercise vigilance over the activities of financial institutions in their territories with all banks domiciled in Iran, in particular with Bank Melli and Bank Saderat." The EU, by now putting the bank on its black list, has ratcheted up those sanctions a notch, joining the US, which took unilateral sanctions against the bank last October. A US Department of Treasury statement at the time explained its sanctions against the bank by saying that Melli "provides banking services to entities involved in Iran's nuclear and ballistic missile programs," and that it also provided banking services to the Islamic Revolutionary Guards and its Quds force, which "provides material support to the Taliban, Lebanese Hizbullah, Hamas, Palestinian Islamic Jihad, and the Popular Front for the Liberation of Palestine-General Command (PFLP-GC)." One government source said the EU move would be a real blow to the Iranians, both because Melli was an important bank and because the decision sent a strong political message to Teheran that its support inside the EU was not as strong as it had once thought. "This is definitely significant, because Iran sees the EU as a major economic partner," the source said. The source said that as Teheran was having increasing difficulties doing business with Europe, it was looking east to countries like China, Indonesia and Malaysia to provide it with spare parts and technological upgrades. What those countries couldn't provide, however, and what Iran needed desperately for its energy industry, was Western technology, the source said. The decision to blacklist Bank Melli was made at last Friday's PSC meeting, where a discussion was held on the formulation of an EU "common position" on the UN sanctions taken against Iran in March. Following the first two rounds of sanctions in 2007, the EU went a little further than the UN Security Council and in its "common position" drew up a list of personalities and institutions it would boycott. The PSC is a group of ambassadors from each of the EU states, making up the highest political-level echelon stationed permanently in Brussels. It prepares the resolutions that are later approved by the EU ministers. What was agreed upon at the PSC, government sources said, was to take the current EU list of blacklisted Iranian people and institutions and expand it to include Bank Melli. It is expected to be approved by EU ministers in a number of days, possibly by the EU foreign ministers when they meet for their monthly meeting on Friday. However, no decision has yet been made on a "common position" on Resolution 1803, with Italy still among those opposing a British and French resolution to intensify those sanctions as well. Even as the EU's move was seen as a positive development in Jerusalem, there was continued concern here that the $28 billion deal signed last month between the Swiss energy giant EGL and the state-owned National Iranian Gas Export Co. might open up the dam and lead others to invest there as well. Officials in Jerusalem explained that the main concern was not business trade with Iran, but rather investment in Iran's energy sector. The official said there were some signs that following the Swiss example - which received Swiss political backing when the country's Foreign Minister Micheline Calmy-Rey went to Teheran to witness the signing of the deal - some countries with smaller economies, such as Croatia and Poland, might follow suit with smaller deals. Although the Swiss deal did not violate the letter of the UN sanctions, sources in Jerusalem said, it did violate the spirit of the sanctions, which was to send a clear message that Iran was not a safe place for investments. Switzerland is not an EU member.