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Just two days after the EU set up a transactions channel with Iran to ease the Islamic country's financial woes, Tehran tested a cruise missile that experts say could force Brussels to review its Iran support.
The European Union's latest Iran chiding was not entirely unexpected. Despite the bloc's strong support to Tehran in the wake of United States' sanctions on the Islamic country, the Iranian government's "belligerence," as some analysts would put it, has not ceased.
The EU urged the Iranian regime on Monday to put an "immediate end" to "unacceptable behavior," including halting any further ballistic missile tests or attempts to assassinate Iranian dissidents on European soil.
The warning comes amid increasing pressure from US President Donald Trump to counter growing Iranian influence in Europe and the Middle East.
Read more: Iran sanctions: 5 things to know
It also comes only two days after Iran unveiled a new cruise missile with a range of more than 1,300 kilometers (800 miles) during celebrations marking the anniversary of the 1979 Islamic Revolution.
Tehran launched the missile despite continuous warnings from the US. Trump withdrew the US from the 2015 international Iran nuclear deal last year and re-imposed sanctions on the country that had been lifted under the pact in return for Tehran curbing its nuclear program. Iran has said its missile tests do not violate the resolution.
A set back for the EU
The EU said on Monday that it was "gravely concerned by Iran's ballistic missile activity" and called on Tehran to refrain from any further launches that violate United Nations Security Council orders. But the European bloc vowed to continue to support the 2015 nuclear deal with Iran.
In its response to EU criticism, Iran's foreign ministry said on Tuesday that it was committed to the nuclear deal.
Europe has been supportive of Iran despite Trump's harsh posture against the Islamic republic. On January 31, several European countries established a new transaction channel that will allow European companies to continue trading with Iran despite US sanctions.
The channel, set up by Germany, France and the UK, is called INSTEX — short for "Instrument in Support of Trade Exchanges." The payment channel allows for European countries to continue trade with Iran but could put them on a collision course with Washington. Experts say that despite these extraordinary concessions, the Iranian government is not cooperating with the bloc fully and is strengthening President Trump's narrative that Tehran should not be trusted.
"Time and again, Europe has shown its weakness to Tehran. I think the Iranian regime is doing what it has been doing for quite some time," Paulo Casaca, an Iran expert and the executive director of the Brussels-based South Asia Democratic Forum (SADF), told DW.
Casaca, who was a Portuguese member of the European Parliament from 1999 to 2009, said that it is difficult to understand the EU rationale behind its Iran support. "On January 8, the EU listed the internal security directorate of Iranian secret service as a terrorist organization. After this measure, the EU proposed a special vehicle to evade sanctions on Iran. It is likely that INSTEX is only meant to send a message to the US that the EU does not accept its extraterritoriality," Casaca said.
The expert said that Brussels, however, is beginning to understand the Iranian threat.
"Last July, when the security officials in Belgium, France, and Germany averted a terrorist attempt to bomb a major gathering of Iranian opposition activists in Paris, it was not taken too seriously. Now, it is clear to everyone that it was indeed an attack orchestrated by Iranian authorities," Casaca argued.
"The argument that Iran could not possibly organize a terrorist attack on European soil is flawed because it ignores the 40-year history of Euro-Iranian relations," he added.
The Iranian foreign ministry, however, denied allegations that Tehran was plotting terrorist acts in Europe, saying the country itself is a victim of terrorism.
Iran divided on EU support
But why did Iran conduct the controversial missile test at a time when it badly needs the EU's support?
Mehran Barati, a Berlin-based Iran expert, told DW that the cruise missile test was aimed at regional and domestic needs.
"The Iranian regime believes it could be targeted by Israel. The Iranian military does not have an effective weapon to respond to a potential attack. I think that with the launch of the cruise missile, which can reach a distance of 1,350 kilometers and can evade the Israeli and American radar systems, the Iranian military feels empowered," Barati said.
However, the missile launch is likely to increase Iranian-Israeli tension, the expert said.
Barati is of the view that although missile tests would increase Iran's economic woes, Iran's Revolutionary Guards and Supreme Leader Ayatollah Khamenei believe that the EU support would not last and that they need to strengthen their military program.
But Reza Taghizadeh, a UK-based political analyst and Iran expert, told DW that Iranian authorities are divided over European assistance. "President Hassan Rouhani is in favor of opening up to Europe and taking measures against money laundering and terrorist financing. However, the hardliners believe that the EU's INSTEX is not something that Iran wants," Taghizadeh underlined.
"Iran's hardliners insist on adopting an offensive approach toward the Europeans and want to undermine Rouhani's diplomatic efforts," he added.
Iranian experts also say that the latest missile test should be viewed as a bargaining chip with the EU.
But the EU was clear in its warning on Monday that it was "deeply concerned by the hostile activities that Iran has conducted on the territory of several Member States." It also expressed "serious concerns regarding Iran's military involvement and continuous presence of Iranian forces in Syria."
On its part, the Iranian foreign ministry said that despite differences, it hoped that Europe "will fulfill all of its commitments, and the two sides will shortly witness deepening of trade relations."
Additional reporting by DW's Farsi department.