Saturday, February 07, 2009

Wall Street Journal Europe, 05 February 2009 (excerpts) – Tehran seems to have no trouble obtaining the necessary technology for its nuclear-weapons program.
While the U.S. has ratcheted up its efforts to prevent Iran from obtaining nuclear arms, the Islamic Republic is reaping a windfall from European companies. These firms’ deals aid a regime that is bent on developing nuclear weapons and which financially supports the terror organizations Hamas and Hezbollah.
The Austrian oil giant OMV is itching to implement a €22 billion agreement signed in April 2007 to produce liquefied natural gas from Iran’s South Pars gas field; at last May’s annual shareholder meeting, Chief Executive Officer Wolfgang Ruttenstorfer said OMV was only waiting for “political change in the U.S.A.” Raiffeisen Zentralbank, Austria’s third-largest bank, is active in Iran and, according to a story by the Journal’s Glenn Simpson last February, has absorbed the transactions of key European banks that shut down their operations in Iran. And in late January Paolo Scaroni, CEO of Italian energy corporation Eni SpA, told the Associated Press that his firm will continue to fulfill its contractual obligations in Iran and feels no external pressure to sever ties with Iran’s energy sector.
Yet because of the sheer volume of its trade with Iran, Germany, the economic engine of Europe, is uniquely positioned to pressure Tehran. Still, the obvious danger of a nuclear-armed Iran has not stopped Germany from rewarding the country with a roughly €4 billion trade relationship in 2008, thereby remaining Iran’s most important European trade partner. In the period of January to November 2008, German exports to Iran grew by 10.5% over the same period in 2007. That booming trade last year included 39 “dual-use” contracts with Iran, according to Germany’s export-control office. Dual-use equipment and technology can be used for both military and civilian purposes.
Siemens, the largest German trade partner of Iran, represents a window onto an opulent economic partnership between the two countries. German firms such as Mercedes-Benz, whose Web site lists an Iranian general distributor, and insurance giant Munich Re have also remained indifferent to the growing calls to isolate Iran economically. Yesterday, a Munich Re spokesman confirmed to me that the company insures goods in transit to Iran. This was the first such public disclosure by the firm.
And the deals just keep on coming. The Hannoversche Allgemeine newspaper, for example, reported in late January that the German engineering firm Aerzen secured a contract totaling €21 million to supply process gas blowers and screw-type compressors to a steel factory in Esfahan, Iran.
All of this is taking place while Iran is moving at an astonishing pace to process high-grade uranium for its atomic bomb. Iran’s launch of its first domestically produced satellite on Tuesday prompted an alarmed French Foreign Ministry spokesman Eric Chevallier to underscore the link between Iran’s military nuclear capability and its compatibility with the satellite technology.
In short, while Berlin claims it wants to discourage Iran from building a nuclear bomb, it has so far done little to actually stop the bomb. German legislation prohibiting trade with Iran, coupled with an immediate cessation of credit guarantees, would decisively setback, if not stop, Iran’s nuclear weapons program and set an invaluable example for other EU countries to adapt for their own companies.