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Secretary of State Cyrus Vance sounded out U.S. allies on possible economic moves against Iran during two days of hopscotching around Western Europe. He consulted with government leaders in London, Paris, Rome, Bonn and finally at the NATO meeting in Brussels. The allied governments previously had denounced Tehran for holding the hostages, but most of them are heavily dependent on Iranian petroleum and seemed unwilling to support any action that might cause Tehran to shut off their oil. Observed Harvard International Affairs Professor Stanley Hoffmann, who is on sabbatical in Paris: " There is on the part of Europeans a tendency to play spectator to world affairs as if they were at a stadium looking at other teams playing soccer and it did not concern them at all."
That Europeans have qualms about further action against Iran was made very clear to Vance. Britain fears that additional economic retaliation might cause its embassy in Tehran to be attacked next. The British government has considered many options on the crisis, said a high official, but "you wind up rejecting most of them because they could endanger the hostages or lead to the taking of more hostages." West German officials warned that if the crisis turned into an economic war that involved other Middle East oil producers, the U.S. might lose its present worldwide support.
On the other hand, the Europeans would rather have the U.S. put further economic pressure on Iran than take military action over the hostages. Thus, reported a senior official on Vance's plane: "There is virtually universal support for [new economic pressure] if there is no satisfactory response [from Iran] in the very near future." He added: "One thing that came through loud and clear is that there is really wholehearted support for us. We are operating against the background of very strong sympathy for the U.S. Everyone realizes that it is a desperate situation, and it may call for desperate solutions." Still, after arriving back in Washington, Vance said: "No decisions have yet been taken."
There is considerable skepticism, however, even in the U.S. Government, that economic retaliation of any kind will provide enough pressure on Iran to force the hostages' release. Confides a Government economist: "There may be a lot of wishful thinking by the Administration on this. Businessmen are very resourceful. Wherever there is a buck to be made, there is always going to be a sizable group of clever people who will get around an obstacle, even an outright embargo." U.N. sanctions against trade with Rhodesia since 1966 and against arms sales to South Africa since 1977 have posed no insurmountable problems for either country.
Iran is beginning to find some ways around the economic measures taken against it by the U.S. The biggest difficulty has been surmounting the international banking tangle caused by Carter's order last month freezing more than $8 billion in Iranian assets held by U.S. banks. Because of it, no sizable bank anywhere in the world is willing to extend credit to Iran. Most banks are also unwilling to handle Iran's international transactions, with the important exception of the Swiss and Japanese. They have made it possible for Iran to keep making oil sales, which amount to about $1 billion a week.