Iran-Germany Joint Economic Committee meeting to be held after 15 years
Iran-Germany Joint Economic Committee meeting to be held after 15 years[stm_post_details]
Sigmar Gabriel, the German vice chancellor and economy minister, will travel to Iran next week (May 2016) to attend the Iran-Germany Joint Economic Committee meeting in Tehran, a meeting held for the first time after 15 years.
This is Gabriel’s second visit since the nuclear deal and with the hope that it will upswing the economic relations between the two countries.
“I expect strong measures since Mr. Gabriel is not only the minister of economy, he is also Germany’s vice chancellor,” says Helene Rang, the executive director of Germany’s Near and Middle East Association.
Volker Treier, the managing director of the economic policy division of the Association of German Chambers of Industry and Commerce, has also pointed to the importance of the visit to Iran and said, “It has been months that political and economic officials from different countries are traveling to Iran seeking billions in contracts, while Chancellor Angela Merkel is maintaining distance with Iran.”
Since French President Francois Hollande has already met Iran’s President Hassan Rouhani a few months ago, and Italian Prime Minister Matteo Renzi already did the same, German companies expect that the government gives the signal to Iran that the revitalization of relations between the two countries is a subject of highest order.
Although much is still running slow, there is a lot of confidence in the German economy, with regard to Iran. German investors hope at least for one or two contracts to be signed during the visit, even if the scope of these contracts is not very wide. The fact that the Siemens group recently announced a comprehensive turbine cooperation with an Iranian partner, is seen as a good omen.
Treier is optimistic that economic relationship between the two countries which was greatly reduced as a result of sanctions, will rise again to 4-5 billion euros within the next two to three years. He hoped that the volume of trade will climb to 10 billion euros in the next five to seven years.
However, there are still some problems regarding business in Iran. The main problem that prevents many German companies from boosting deals with Iran is the lack of funding through German banks. “The key issue that needs to be solved in short term “, Said Rang.
Most German banks holding back on lending in order not to get lost in a maze of confusion which can cost them in the end. The reason is that they believe it is not yet clear which businesses are really allowed in Iran and which are still not, since they believe some of the sanctions are still in force.
Treier believes that when this problem is solved more financial institutions will be willing to get involved then also the instrument of state export credit guarantees for business with Iran should be available again.
Germany was the first Western country to dispatch a high-ranking political and trade delegation to Iran after nuclear deal. Gabriel led German officials and corporate managers on the business visit to Tehran.
During Gabriel’s last visit, Iranian and German officials discussed economizing water and energy consumption, improving efficiency in power plants, building new power plants, constructing renewable energy power plants as well as new energies.