Germany in no Iran exit
Siemens' decision to wind down business with Iran found few followers among German companies recently, despite mounting pressure to cut ties over the Islamic Republic's sensitive nuclear work.While some sectors such as machinery and banking are already seeing a decline in business with Iran, others are seeking new trade there, including some keen to tap Iran's hold on the world's second-largest natural gas reserves.
"In the interest of security of supply for Germany and Europe we are in talks with many producers of natural gas, amongst others Iran," a spokesman for energy group E.ON's gas unit said, reiterating the company's stance.
No German companies are exploring for oil in Iran, which remains a net importer of gas given its creaky infrastructure.
RWE - a shareholder in the Nabucco pipeline consortium that is planning to ship gas from the Caspian region to Europe via Turkey from 2014 - said including Iran in the project was not planned at this stage.
"We maintain that Iran is not envisaged as a supplier under the current political conditions," said the spokesman for RWE's Supply & Trading unit in Essen.
The consortium can speak for its own planned shipments on the pipe but will not be responsible for volumes booked by outside traders and importers and so could stretch to Iran.
Siemens, Europe's biggest engineering conglomerate, said it would reject further orders from Iran.
Western nations accuse Iran of trying to develop a nuclear weapons capability. Tehran denies this and says its uranium enrichment programme aims solely to generate electricity.
Not a core market
The US has pressed for greater restrictions on foreign trade and investment with Iran but Siemens is the only major German company to ban new business with Iran outright.
Many German companies view deals with the country as a tiny part of their overall business. Bayer and Linde for instance called it "small" and "not substantial" respectively.
Germany's VDMA engineering industry association said trade with Iran had been declining for years.
"Iran is not a core market," said Ulrich Ackermann, head of the VDMA's foreign trade division, adding Iran accounted for less than one percent of engineering exports.
Iran ignored a US end-2009 deadline to respond to an offer from world powers of economic and political incentives in exchange for halting enrichment or face more sanctions. German Chancellor Merkel said time was running out for Iran.
She also said many German firms had scaled back their business ties with Iran and that Germany would adhere to sanctions in whatever sectors they applied to.
German exports to Iran fell less steeply than to other countries last year despite UN sanctions, Federal Statistics Office data seen by reporters showed.
German companies sold about 3.3bn euros ($4.6bn) worth of goods to Iran in the first 11 months of 2009, down about eight percent from the previous year. Overall German exports slumped 19.9 percent amid the global recession.
Iran was Germany's 42nd largest export market in 2008 and is a heavy buyer of machinery, chemical products and metals.
Final Bell
Coercive forces grip India...
Special Reports
The Troubled Asset Relief Programme has been a bigger success than was expected – but its critics haven't gone away...
Risk Encyclopedia
Also in this section
- Indonesian reform fought on Bank Century battlefield
- Greece must do more to tackle debt crisis, EU says
- Germany quietly gains from Eurozone crisis
- South Africa's January CPI inflation dips on food prices
- WTO: World trade contracted 12% in 2009
- UK exchange continues progress
- 'The system is not only unreformed, but actually worse than before'
- Global M&A: Back from the brink?
- The dirty dozen
- Standpoint
Most read articles
World Finance TV
Virtual Edition
In our latest print edition: Gruma's Chairman Roberto Gonzalez Barrera shares his experiences in growing and maintaining his business, and branching out into global markets.
