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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Haim R. Branisteanu who wrote (64697)	3/21/2007 2:38:00 PM
From: mishedlo	Read Replies (2) \| Respond to of 116555

German Companies Come Under Pressure to Curtail Iran Exports March 21 (Bloomberg) -- German jobs risk becoming an unintended casualty of United Nations sanctions against Iran as export companies come under political pressure to curtail business with the Islamic Republic, business groups warned. Ten percent of 120 German companies that do business in Iran surveyed by the Berlin-based DIHK trade chambers said they already felt ``informal pressure'' to reduce trade. Another 16 percent said they were beginning to experience such pressure. About 10,000 German jobs depend upon Iran trade, the DIHK says. ``We're following with some concern the political debate about possible sanctions against Iran,'' Martin Wansleben, executive director of the DIHK representing more than 3 million companies, said in an interview. ``Germany is a traditional export nation,'' and ``any sanctions would prove disruptive.'' The UN Security Council holds a formal session in New York today to discuss a resolution setting a new 60-day deadline for Iran to halt uranium enrichment activities or face further sanctions, the second round of sanctions since December. Trade affected includes financial aid, arms and technology that might be used to build nuclear weapons. Germany, as the world's biggest exporter, ``fully supports'' sanctions as in the ``common interest,'' Finance Minister Peer Steinbrueck told an audience in Washington March 14. Still, ``there needs to be an understanding that European economies could be more damaged by such sanctions than the U.S. economy,'' he said. Further tightening ``could damage some investment engagements of German companies.'' $5 Billion Trade Germany was Iran's biggest trading partner in 2005, yet lost that place to the United Arab Emirates last year, the UN Commodity Trade Statistics database shows. German exports to Iran from machinery to automobile parts declined by 6 percent to 4.1 billion euros ($5.5 billion) last year, according to Federal Statistics Office figures. The ramifications of a worsening political climate rather than any specific sanctions are to blame, according to the DIHK. Forty percent of those surveyed said bank loans were becoming harder to secure and more expensive, leading to a decline in business with Iran. One-third said sales were declining, while another third said they expected sales to fall in the near future due to export restrictions and a trade environment described as generally negative. ``We have certain pressure at the political level to step back from business in Iran,'' Wansleben said. German companies that export to Iran approached by Bloomberg News refused to discuss their business publicly, citing the sensitivity of the trade. ..... ``German companies should absolutely comply with UN sanctions but trade with products that don't fall under the embargo should be carried out unopposed,'' Eckart von Unger, regional director for Middle East and Africa at the BDI industry federation, said in an interview. The German government has slashed its export guarantees for Iran. In 2006, the value of approved new credit guarantees, a kind of government-backed insurance, dropped to 904 million euros from 1.45 billion euros in 2005, according to the Web site of the AGA federal office for foreign trade and investment promotion. ... bloomberg.com