European leaders agree to new sanctions on Iran after attack on Israel

European Union leaders have agreed to increase sanctions Iran after Iran's missile and drone attack on Israel, in an attempt to limit any Israeli retaliation and prevent a wider conflict in the Middle East, as the war in Gaza continues.

Meeting Wednesday for the first time since Iran's attack on Israel, the EU's 27 leaders condemned the Iranian attack, reaffirmed their commitment to Israel's security and called on all sides to prevent more tensions, including in Lebanon.

"We feel it's very important to do everything to isolate Iran," said summit chair Charles Michel.

German Chancellor Olaf Scholz said it was important that Israel "does not respond with a massive attack of its own."

Israel has signalled it will retaliate but has not said how.

New sanctions

The new sanctions will target companies involved in the production of drones and missiles.

The EU already has multiple programmes that target Iran for human rights abuses, the proliferation of weapons of mass destruction, and Tehran's support for Russia's war in Ukraine.

Several EU countries, France and Germany, are considering expanding an existing scheme that seeks to curb the supply of Iranian drones to Russia, to include the provision of missiles and cover deliveries to Iranian proxies in the Middle East.

Belgium backed introducing sanctions against Iran's Revolutionary Guard Corps but Scholz said that required further legal checks, and such a move could only happen if the corps was found to have been directly involved in terrorist activity.

G7 backs limiting weapons

Finance leaders from the Group of Seven industrial democracies, meeting separately in Washington Wednesday, on the sidelines of the spring meetings of the International Monetary Fund and World Bank, said they would cooperate on sanctions.

In a joint statement with central bank governors, the G7 finance ministers said they would "ensure close coordination of any future measure to diminish Iran's ability to acquire, produce, or transfer weapons to support destabilising regional activities."

Analysts say Iran is unlikely to face more severe economic punishment because of worries about increasing oil prices and angering top buyer China.

(with Reuters)