April 15, 2015
German companies are ready to reinvest in Iran. Is this a smart move?
With a framework in place for addressing the Iran nuclear issue, Germany, a member of the P5+1 powers negotiating with Tehran, stands to reap an economic windfall. German investment in Iran, however, is a double-edged sword. When it comes to the uncertainties of sanctions relief for Iran’s battered economy and the misuse of technology for domestic repression, Germany’s business community may face enormous challenges.
The November 2013 Joint Plan of Action interim agreement sparked a 30-percent rise in German exports to the Islamic Republic in 2014 to reach €2.4 billion.
German businesses are straining at the leash to reenter the Iranian market. Michael Tockuss, managing board member at the German-Iranian Chamber of Commerce Association in Hamburg, said Iran is “totally dependent” on German spare parts and suppliers, and estimates that annual exports to Iran could rise to €5 billion or €6 billion after a comprehensive deal. The Chambers of Commerce and Industry in Germany see a €12 billion benchmark in the coming years.
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