The European Union passed a new round of Iran sanctionson Monday, targeting the Islamic Republic’s vulnerable financial, shipping, and bank sectors.

The Obama administration rushed to take credit for the new EU sanctions. White House spokesman Jay Carney, accompanying Obama on the campaign trail,told the pressthat “Rallying the world to isolate Iran and increasing the pressure on its leadership so that they stop pursuing a nuclear weapon has been a top priority for the president.”

Iran remained predictably defiant. Iranian foreign ministry spokesman Ramin Mehmanparast termed the sanctions “illegal, unwise and inhuman,” and refused to suspend the country’s continued illicit enrichment of uranium.

Economic warfare has, without question, contributed to the demise of Iran’s currency—the rial—and prompted riots in Tehran.

But the Obama administration has failed to convince the Europeans to enact sanctions sweeping enough to crush the Iranian economy. The EU refuses to designate Iran’s Islamic Revolutionary Guard Corps as a terrorist entity. According to estimates, the IRGC controls at leasthalf of Iran’s economic enterprisesand oversees its illicit nuclear activities and ballistic missile program.

The Europeans don’t want to enact stronger sanctions, but they also worry that a President Mitt Romney might twist their arms for it. The Europeans have an annual bilateral trade volume of over 25 billion euros with Iran.

In his blog for the Telegraph, the paper’s chief foreign correspondentColin Freemanwrote, “the only way to stop Tehran acquiring a nuclear weapon now is to foment regime change from within, a plan that happily coincides with the express wishes of a lot of Iranian people.”

Sadly, Obama stood idle as the mullahs put down Iran’s democrats in 2009. But Iran still has the potential for massive political reform and a transformation to democracy.

The EU has a great leverage over Iran’s wobbly economy. Put simply, the next U.S. administration needs to push Europe to move beyond economic half-measures and employ industry-wide sanctions against Iran’s rulers coupled with a ban of the IRGC.

Benjamin Weinthal is a Berlin-based fellow at the Foundation for Defense of Democracies.

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