Sunday, October 21

European Support for Iran

On one hand, we have Javier Solana, EU Foreign Policy Head, carrying the implicit threat of sanctions on Iran for carrying out attempts to create a nuclear weapon programme. On the other hand, we have Germany and other firms offering export guarantees to firms doing business with Iran. Some quotes:

In its 2004 annual report on export guarantees, Berlin's Economics Ministry dedicated a special section to Iran that captures its giddy excitement about business with Tehran.

"Federal Government export credit guarantees played a crucial role for German exports to Iran; the volume of coverage of Iranian buyers rose by a factor of almost 3.5 to some €2.3 billion compared to the previous year," the report said. "The Federal Government thus insured something like 65% of total German exports to the country. Iran lies second in the league of countries with the highest coverage in 2004, hot on the heels of China."

Iran tops Germany's list of countries with the largest outstanding export guarantees, totaling €5.5 billion. France's export guarantees to Iran amount to about €1 billion. Italy's come to €4.5 billion, accounting for 20% of Rome's overall guarantee portfolio. Little Austria had, at the end of 2005, €800 million of its exports to Iran covered by guarantees.

Between 2003 and 2005, Europe's exports to Iran rose 29% to €12.9 billion; machinery, transport equipment and chemicals make up the bulk of the sales. European imports from Iran, predominantly oil, increased 62% to €11.4 billion in that period. In addition, Europe heavily invests in Iranian oil, gas, mining automotive, transportation and communications companies.

Europe is Iran’s main supplier of goods and makes up 44% of the country’s total imports. Much of that commerce is subsidized by European tax dollars which underwrite deals with and within Iran. Indeed, in some European nations such as Germany, the Federal government export credit guarantees play a very important role for German exports to Iran. It insures, through export guarantee programs, approximately 65% of the total German exports to Iran. After Germany (with around 5.5 billions € of export guarantees), comes Italy (with around 4.5 billions € of export guarantees), and then France (with around 1 billion € export guarantees). Austria too guarantees about 800 million € of exports to Iran....

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