Germany criticizes Austrian trade ties with Iran - Haaretz

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Wed., January 23, 2008 Shvat 16, 5768

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Germany criticizes Austrian trade ties with Iran

By Benjamin Weinthal

Top German officials, including German Chancellor Angela Merkel, have recently criticized Austria's commercial ties with Iran and its opposition to tighter sanctions on the Islamic republic, according to a source with ties to the Berlin government.

These criticisms, made at several high-level meetings, are the first sign of a rift between fellow European Union members Austria and Germany over trade with Iran.

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In one closed-door meeting last autumn, according to the source, Merkel said that Austria set a dangerous precedent when its state-owned energy and gas company OMV negotiated a 22 billion euro agreement to develop Iranian gas and oil fields. Merkel said that the EU must work to stop such agreements.

At another meeting in mid-December, the German State Secretary for Foreign Affairs Reinhard Silberberg suggested that the EU might institute its own sanctions against Iran's bank and energy sectors, in an effort to halt Tehran's nuclear program. However, the official added, Austria could complicate any EU effort to implement new trade restrictions.

Germany, as Iran's leading trade partner in the EU, could exert serious economic pressure on Tehran. In an article for the paper Handelsblatt on December 27, Merkel wrote: "It remains in the vital interest of the entire international community to prevent a nuclear-armed Iran, if necessary by intensifying sanctions."

Nonetheless, the German Ambassador to Iran, Herbert Honsowitz, told Iranian Press TV that the "German Embassy is trying to take measures toward maintaining and improving economic ties between the private sectors of the two countries." He added that UN sanctions have not hurt German exports to Iran because these products pass through the Dubai free-trade zone.

Honsowitz's efforts to strengthen economic relations between Iran and Germany seem to be at cross purposes with Merkel's efforts to clamp down on German-Iranian trade. During her visit to the United States in November, she assured President George W. Bush that Germany would discourage companies from commencing deals with the Iranians.

Some critics believe that Berlin's gingerly approach to persuading companies to end business relations with Iran is ineffective. "If the special relationship with Israel and the vows to defend its right to exist count for anything, this is the time for the Federal Republic to set an example to follow. It would entail enacting comprehensive and if need be even unilateral sanctions and slashing all export credit guarantees," said Dr. Yves Pallade, an expert on German-Israeli relations and director of the Foreign Affairs Network of B'nai B'rith Europe.

The OMV deal, signed in April, also faces mounting criticism in Austria. But Austrian Chancellor Alfred Gusenbauer, asked by the Austrian daily Die Presse how the deal squares with his Social Democratic Party's tradition of "human rights before business," responded: "The tradition never held true."

Ironically, OMV sponsors the Holocaust remembrance project Letter to the Stars, which fosters exchanges between Holocaust survivors and Austrian students. Yaakov Stiassny, of the central committee of Jews from Austria in Israel, said his organization has asked the project to sever its partnership with OMV.

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