European firms size up Iran's post-deal potential

Fri Nov 29, 2013 5:35am EST
 
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By Alexandra Hudson

BERLIN (Reuters) - The phone hasn't stopped ringing at the German-Iranian Chamber of Commerce since six world powers reached a deal with Tehran to curb its nuclear program, opening the prospect that Iran can begin to shake off its economic isolation.

A strategically located country with massive oil and gas reserves, an urgent need to overhaul its creaking infrastructure, and a young population of 76 million is of particular interest to export champion Germany, once Iran's largest trade partner.

"We are speaking to companies interested in doing business with Iran all day," said Michael Tockuss, director of the chamber of commerce.

In practice, they are likely to tread warily. The preliminary accord struck in Geneva on Sunday, which brings up to $7 billion worth of sanctions relief to Iran, could still come unstuck after 10 years of distrust and rancor, leading to yet deeper sanctions that could sink any hasty investments.

The deal, which runs for six months, includes access to a potential $1.5 billion in trade in gold and precious metals, the suspension of some sanctions on Iran's auto sector and petrochemical exports, and opens ways to send and receive payments for humanitarian trade, including medicine and medical devices.

The United States, under pressure from congressmen skeptical about the deal and from an implacably opposed Israel, has downplayed the likelihood of a business bonanza.

"We don't see on the basis of a six-month agreement business rushing in ... and we will vigorously, vigorously, enforce the vast majority of sanctions, which will remain in place," a senior U.S. administration official said ahead of the talks.

But he conceded: "There is no doubt that some business will return to Iran."   Continued...

 
EDITORS' NOTE: Reuters and other foreign media are subject to Iranian restrictions on leaving the office to report, film or take pictures in Tehran. An Iranian man walks past a dress shop in central Tehran March 1, 2012. REUTERS/Morteza Nikoubazl