Germany's Priorities

BERLIN/TEHRAN/WASHINGTON (Own report) - In talks with Iranian government officials on Tuesday, the German government will seek a solution in the dispute over the nuclear deal with Tehran. While trying to defend the interests of German industry, it is aiming for an independent Middle East policy. Because of its close alliance with Washington in the power struggle with Moscow and Beijing, this would be very important, as legitimization of Berlin's claims to playing a leading role in global policy. While commentators are encouraging the government, the minister of the economy and business circles are warning against exacerbating the conflict with Washington. It is very risky for the German elite's prosperity, because the United States is the largest market for German companies and, by far, their most important investment site. On the other hand, in Iran, the EU countries' industry risks irrevocably losing out to China, due to the US sanctions.


Struggle for Independence

Over the past few days, Chancellor Angela Merkel and other German government representatives have reiterated their willingness to openly oppose the United States in its Iran policy. Referring to the Trump administration's breach of the nuclear deal, Merkel said last Friday, "if everyone does what he likes, it would be bad news for the world."[1] The foreign ministers of Germany, France and the UK will meet tomorrow with Iranian government representatives to discuss ways to safeguard the nuclear deal. At the end of last week, Merkel had already had an exchange of views on the issue in a telephone conversation with Russian President Vladimir Putin.[2] "We are ready to talk, to negotiate, but if necessary to argue in favor of our positions," Foreign Minister Heiko Maas was quoted. Indeed the German government has hardly another choice, if it does not want to renounce on a leading role in global policy that it has been claiming more often publicly.[3] Berlin is Washington's close ally in the power struggle with Russia. In the conflict with China, a joint transatlantic approach is also in the offing. Only in the Middle East, has Berlin been able to demonstrate a certain independence from Washington through its Iran policy, aimed at "transformation through convergence."[4] This, however, is now at risk, if the nuclear deal is annulled.


Commentators in the media, as well as government advisors have been spurring on Berlin's efforts to salvage the nuclear deal in opposition to the USA. "Europe must add weight to the balance, to be listened to, respected and impose its own interests," a leading newspaper commented last Friday. "World power is not achieved in a conference room, with complacent speeches or by feeling offended."[5] In the power struggle over the nuclear deal, "the EU" must "act jointly and should not shy away from the conflict with the USA," the German Institute for International and Security Affairs (SWP) declared, even if the EU's "decisive approach would most likely provoke a tough conflict with an uncertain outcome."[6] In view of the expected tough "transatlantic conflict," "precautions must be taken," that the "EU will not again be divided - like in 2003 over the issue of the Iraq war," SWP continues. "Germany, France and the UK should therefore promote the support of all EU countries for this course." Heightened transatlantic tensions are by no means "desirable." However, if the EU is now shying away from a confrontation, "Trump would have damaged not only the US' but the EU's credibility, as well." It is therefore necessary to insist on an independent Iran policy.

Secondary Sanctions

Government advisors consider state measures to insure German business with Iran to be essential. Washington is threatening to apply secondary sanctions to any German company, that continues to trade with Iran or still seek to invest, according to another SWP paper. The EU must oppose such punitive measures, to salvage German-Iranian trade and the investments in Iran. Brussels could invoke its "blocking statute," created back in 1996, the paper suggests.[7] State guarantees for EU companies' business with Iran are also possible. The German government is already warning that it is neither willing nor able to do this. "We have no legal means of protecting or exempting German companies from the American government's decisions, especially when it concerns cooperation with American companies in the USA," declared Germany's Minister of the Economy Peter Altmaier. At best, we can "advise" the companies concerned.[8] It is already clear that the German economy will, for the most part, submit to US sanctions. The consequences of insubordination to Washington, have already been suffered, for example, by the Commerzbank, when in 2015, it was fined €1.45 billion - for facilitating the financing of business with Iran.

"A Bit Susceptible to Blackmail"

An added factor is that many of the German companies doing business in Iran are doing much larger business in the United States. Siemens, for example, could expect billions of dollars in contracts for building gas turbines and modernizing Iran's railroad network. In the USA, on the other hand, Siemens earns US $24 billion annually. The Henkel Corp. in Düsseldorf, calculates that its business with Iran makes up one percent of its total intake, whereas it reaps 25 percent of the company's turnover and 20 percent of its yields from its business in the USA. Many German enterprises find themselves in similar situations, because the United States is the most important market and the most significant investment site for the German economy. Last year, German companies delivered commodities valued at around €112 billion to the USA, reaping an export surplus of €51 billion, with German direct investments recently reaching US $260 billion - far more than in any other country. "We are, in fact, a bit susceptible to blackmail," remarks an official dealing with this issue. He warned against open criticism of the USA, "beating one's chest does not make matters better."[9]

"A Slip of the Tongue"

Also with this in mind, Minister of the Economy Altmaier has begun warning against considerations, of openly taking Moscow and Beijing's side against Washington in the Iran policy. He considers it "a slip of the tongue ... when some say, we should join Russia and China against the USA," explained Altmaier. Not only is the United States "still our closest NATO ally," there are "very close and good business relations between the USA, Europe and Germany." Therefore, one should "not engage in an arms buildup in rhetoric," warned Germany's minister of the economy.[10]

The New Silk Road

At the same time, business circles are warning that, of course, business with Iran does not balance out that with the USA. However, one must also consider that China will fill the gap, if US sanctions force Europe's companies to withdraw from Iran. Consequently, this could permanently exclude western business from the country with the prospect of becoming the most lucrative market in the entire Middle East. In fact, Chinese companies have already announced plans to expand their activities in Iran. Just a few days ago, a freight train set out from the People's Republic of China to inaugurate a new transport link from China to Iran within the framework of the New Silk Road ("One Belt, One Road"). As a matter of fact, companies from Germany and the EU cannot afford further delay, if they do not want to completely lose out. The only alternative option for securing influence in Iran, as it now stands, would be winning a war.


[1] Klartext Richtung Trump. 11.05.2018.

[2] Merkel telefoniert mit Putin - beide bekennen sich zum Iran-Deal. 11.05.2018.

[3] See also Gabriels Kampfansage.

[4] See also Die Anti-Trump-Allianz.

[5] Klaus-Dieter Frankenberger: Zeitenwende. Frankfurter Allgemeine Zeitung 11.05.2018.

[6] Johannes Thimm: Nach dem US-Austritt aus dem Iran-Abkommen: Die Stunde Europas. 09.05.2018.

[7] Oliver Meier: Point of View: What Germany, France and Britain should do after Trump nixes the Iran deal. 08.05.2018.

[8] Schadensbegrenzung für die deutsche Wirtschaft. 11.05.2018.

[9] Daniel Brössler, Stefan Kornelius: Vereint im Zorn auf Trump. 11.05.2018.

[10] Schadensbegrenzung für die deutsche Wirtschaft. 11.05.2018.