Germany Loses Big if Iran Faces Sanctions

NewKerala:

Germany has more to lose from any economic sanctions on Iran than other Western countries as it is the world's biggest exporter to the Islamic republic, a leading German industry group said today.

''Our exports of goods and services to Iran are worth around 4 billion euros (4.8 billion dollars),'' Michael Pfeiffer, a foreign trade expert at the German Chamber of Industry and Trade (DIHK), told Reuters. That was up from some 3.6 billion euros in 2004. READ MORE

Iran's nuclear standoff with the West has brought threats from Washington and a European trio of Germany, France and Britain of referral to the U.N. Security Council for possible sanctions.

Analysts say an embargo is unlikely, but that the possibility is real.

Pfeiffer said a Western embargo would be disastrous for Germany, struggling with a double-digit unemployment rate and sluggish economic growth. ''With our unemployment problem and weak economy, this wouldn't be good at all,'' Pfeiffer said.

The so-called 'EU3' is spearheading a European Union initiative aimed at persuading Iran to give up what the EU and United States fear is a nuclear weapons programme.

Iran says it only wants nuclear technology to generate electricity, and refuses to give up a uranium enrichment programme that could produce fuel for nuclear power plants or atomic weapons.

Comments from Iran's President Mahmoud Ahmadinejad that the Holocaust was a myth have not helped bring the sides together; Germany said his remarks could weigh on attempts to revive the nuclear talks between the European Union and Tehran.

Pfeiffer said sanctions were generally not an effective weapon.

''We saw that in Iraq,'' he said, adding: ''One must remain in dialogue with a country like Iran''.

He said Germany was the world's top supplier of goods to Iran, providing 12.8 percent of the Islamic republic's imports. France, with 8.3 percent, Italy, with 7.7 percent, and China with 7.2 percent were the next most important exporters.

Russia, the UAE and South Korea were also major suppliers.