German exports to Iran surge after easing of sanctions

Germany is traditionally Iran’s most important trading partner in the 28-nation European Union

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German exports to Iran jumped by about 33 percent in the first eight months of the year, lifted by an easing of Western sanctions against the Islamic Republic after an interim deal on its disputed nuclear work, data seen by Reuters showed.

Germany, Europe’s biggest economy, is traditionally Iran’s most important trading partner in the 28-nation European Union.

Data from the Statistics Office seen by Reuters show that exports to Iran rose by 32.7 percent to 1.6 billion euros in the first eight months of the year compared to the same period last year. In 2013, they slumped by 26 percent and in the two previous years they fell by more than 18 percent.

While the amounts are small, the data is something of a bright spot for Germany, whose export-oriented economy is suffering from modest global growth and weakness in much of the European market. Its exports to Russia have plunged due to the impact of sanctions against Moscow over the Ukraine crisis.

Iran and six world powers, including Germany, reached an interim deal last November under which Tehran received limited sanctions relief in exchange for halting the production of medium enriched uranium.

“These relatively small steps have been like a lever starting a bigger movement,” said Jens Nagel of the BGA exporters’ and wholesalers’ association.

“The German economy especially could profit from a relaxation (in the sanctions),” he said, adding there was demand in Iran for German machines, vehicles and chemicals.

Several major companies such as Siemens had been forced to reduce their activities in Iran due to the sanctions. Other companies with business interests there include Bayer and utilities RWE and E.ON.

Iran and the six powers - the United States, China, Russia, Britain, France and Germany - have set a deadline of Nov. 24 to reach a long-term agreement on Iran’s nuclear program.

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