German trade associations warn of the consequences of US sanctions against Iran. The country threatens to slide into a recession – that destabilizes the Middle East, warned BDI and DIHK.
The German economy has sharply criticized severe US sanctions against Iran and warned of massive consequences. The unilateral reintroduction of further sanctions increases the risk of political destabilization in the Middle East, said the President of the Federation of German Industries (BDI), Dieter Kempf. "The instrumentalization of the world economy for US political goals is weighing on international relations and the transatlantic partnership."
Oil, financial market and transportation affected
The US wants to weaken Iran from Monday on with economic sanctions that hit the oil industry, the financial sector and the transport sector with the important ports, above all. The sanctions were initially suspended with the 2015 nuclear agreement. However, the US has dropped out of the agreement against the Council of Europeans, Russia and China. After that, they took action against individual industries in Iran as a first step.
Kempf said that most states have realized that a stronger Iranian economy would help stabilize the region and strengthen the reform forces in Iran. "The recent US sanctions unnecessarily limit Iran's economic prospects."
On the verge of a recession
Eric Schweitzer, president of the Association of German Chambers of Industry and Commerce (DIHK), said US sanctions are particularly noticeable to Iran, as the oil and gas business is the country's main source of revenue. "The Iranian economy is already on the verge of recession and the economy is likely to shrink for the foreseeable future."
The trade relations are clearly affected by the sanctions in the finance and logistics sector, said Schweitzer. Payments are already very difficult, as hardly any banks do business with Iran. "In view of the current situation, German companies are increasingly withdrawing from the Islamic Republic and closing their representative offices." Iran's business is in danger of completely falling apart. "