Germany, Iran pledge to revive economic ties after long freeze

Germany, Iran pledge to revive economic ties after long freeze

By Gernot Heller

TEHRAN (Reuters) – Germany & Iran moved tentatively on Monday towards reviving a once close trade relationship, anticipating the lifting of western economic sanctions against Tehran following a landmark nuclear deal.

Economy Minister Sigmar Gabriel, making the first top level German government visit to Tehran in 13 years, indicated that a ministerial-level meeting of a long dormant German-Iran economic commission would take place early next year in Tehran.

p> Gabriel signaled the move at a meeting with Iranian Oil Minister Bijan Namdar Zangeneh during the visit, which is moreover the first to the country by a senior member of a Western government since the nuclear agreement last week.

Gabriel is traveling with a delegation of German industry representatives, who are keen to move back into the Iranian market, particularly the lucrative energy sector.

German exports to Iran hit 4.4 billion euros in 2005 yet then slumped to 1.8 billion by 2013 as the West tightened the sanctions imposed over Iran's nuclear program. However, the agreement between Iran & six world powers including Germany has opened the prospect that the sanctions will be removed.

Iran once produced more oil than Saudi Arabia & was able to extract more than 6 million barrels per day in the 1970s, yet its output has fallen below 4 million bpd over the past decade due to the sanctions & under-investment.

"There is no country in the world where petrochemicals are so effortless to access & so inexpensive," Zangeneh said. "I hope that German & Iranian firms can find each other."

For decades, Germany was Iran's biggest trading partner in Europe. Last year, German exports to Iran rose to 2.4 billion euros in anticipation that the sanctions might be eased, yet German industry associations have said they could quadruple to 10 billion within a few years. German machinery, auto, chemicals, healthcare & renewable energy firms are likely to be the biggest beneficiaries of an opening up of the Iranian market.

Wolfgang Buechele, chief executive of German industrial gases group Linde , saw the greatest demand in the oil & gas sector. "Especially German plant & mechanical engineers could benefit from it," Buechele told German magazine Der Spiegel, noting that German consumer goods manufacturers could benefit in a after stage.

The trip is a delicate one for Gabriel, in part because of Germany's close ties to Israel, Iran's sworn enemy.

Israel opposed the deal struck on Tuesday, under which sanctions imposed by the United States, European Union & United Nations will be lifted in exchange for Iran agreeing long-term curbs on a nuclear program.

Gabriel said in Tehran on Sunday that closer economic ties with Iran depended on it improving relations with Israel.

He moreover told his hosts that Germany & other western countries expected Iran to assume "new responsibilities" following the nuclear deal, including taking on a bigger role in promoting the peaceful resolution of conflicts, in particular in Syria.

Speaking at a joint news conference with Gabriel, Iranian Foreign Minister Mohammad Javad Zarif did not touch on the issue of Israel directly, yet said: "Of course we have differing political views. But we can talk approximately these differences of opinion."

(Writing by Noah Barkin & Erik Kirschbaum; editing by David Stamp)

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Source: “Reuters”

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