Sunday, January 22, 2006

German Firms Lower Profile in Iran
As the international community considers a response to Iran’s resumption of its nuclear program, Germany may need to balance diplomacy with economic reality.

For several years, Germany has been exporting more products to Iran than any other country in the Middle East. Many top German companies have invested heavily in the state especially in the automobile, machinery and chemical sectors.

With over 1,700 members, the German-Iranian Chamber of Commerce and Industry in Iran is, according to its Web site, the fifth largest such German representation in the world. Users logging on to its site now, however, will find it difficult -- if not impossible -- to see the names of those members.

The chamber's director, Michael Tockuss, said Germany is Iran's number one partner in the construction business.

"We have orders worth billions for German companies," he told German public broadcaster ARD. "Construction firms like Lurgi, Krupp-Uhde and DSD are working here on huge projects."

Tockuss added that DaimlerChrysler is set to begin production of its E-class Mercedes-Benz cars locally and Volkswagen is already well established.

US disapproves of German-Iranian business ties

Germany's business concerns in the Islamic republic have long been a source of disagreement between Berlin and Washington.

In light of recent developments other countries are also debating how to, on the one hand send a clear message to Tehran against the resumption nuclear research, while on the other hand protect their own interests. Emerging power China, for example, has turned to Iranian oil to fuel its growing economy. Russia, too, would presumably not take any action that could endanger its business ties.

Although Iranian oil accounts for less than half a percent of Germany's oil imports, international trade restrictions could prove very costly to German business. Despite the threat of sanctions it seems German firms will maintain their presence in Iran, albeit with no little degree of secrecy. READ MORE