Are They “Willing”? (Germany, the EU and Iranian Trade Sanctions)

Posted by John Rosenthal

An article by Nikolas Busse in yesterday’s (10 May) Frankfurter Allgemeine Zeitung points out that commercial sanctions against Iran could prove highly effective – on the condition, that is, that the EU countries and, in particular, Germany cooperate. The United States, of course, already prohibits trade with Iran. But will the EU states cooperate? An extract:


More comprehensive sanctions [i.e. including commercial sanctions] would be tied to ever higher costs also for the West – and, in particular, for Germany. Should commercial sanctions be applied, it would be first and foremost the EU states that are affected. In 2004, Germany was the most important supplier of Iran (12.3% of all imports), followed by France (8.5%), Italy (7.9%), and China (7.5%). Due to its long-term cooperation with Europe and a lack of local know-how, Iran is particularly dependent upon imports in the automobile and machine-building industries and the oil and gas sectors. As consequence, Iran could be highly susceptible to sanctions.

 

Nikolas Busse ends his article by alluding to what he calls a "well-known and fundamental problem with sanctions":

The fewer the states that participate, the more ineffective they are. A "Coalition of the Willing", of which one is yet again talking in Washington in reference to Iran, could only work if Iran’s most important trading partners participate – above all, the EU.

 

Current German policy in fact actively encourages exports to Iran: notably by having the German state assume the financial risks of German firms exporting to Iran (via the so-called "Hermes" program of export credit guarantees). For further details, see Matthias Küntzel’s earlier Trans-Int article "Are 500,000 Keys to Paradise Enough?: Germany ‘Confronts’ Ahmadinejad".

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