Can we get a link to the original source?
I am not aware of how diplomatic relations can be downgraded. Diplomatic relations are like being pregnant. Either you does or you aint' got diplomatic relations.
Now the diplomatic relations can be strained or even hostile. But what exactly does it mean when a country decides to downgrade diplomatic relations?
Being that this concerns Iran and the sources are probably occidental, I always suspect biases in translation.
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abusus non tollit usum - A right should NOT be withheld from people on the basis that some tend to abuse that right.
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