Buying From Iran

Germany imported 580 million euros ($853 million) worth of goods from Iran in 2007, a 50 percent increase over the previous year, the German business daily Handelsblatt reported on Wednesday, Jan.9, citing sources in the German Foreign Trade Agency.

The jump indicates a deliberate move in the German economy to resist US appeals to trim down trade with the Islamic republic, said the paper. The US demand for a cutback in trade came in addition to United Nations sanctions.

The US had threatened German banks with sanctions on the American market if they did not in turn put economic pressure on Iran to cease its nuclear program. Germany's Commerzbank and Deutsche Bank have complied.

The United Nations has called on Iran to suspend its uranium enrichment program, which the West has said Tehran is using to develop a nuclear bomb. Iran has said it will not halt its nuclear program, which it insists serves only non-military purposes.

Red tape hinders exports to Iran

Though German wholesalers and retailers bought significantly more Iranian products last year, German sales to the country dropped.

Exports to Iran dropped by 15 percent to 3.5 billion euros. In contrast, exports to countries outside the euro zone rose 13.7 percent in 2007 as compared to 2006 (January through November), according to Germany's Federal Statistical Office.

In light of the Iranian nuclear conflict, the German government has issued significantly fewer export guarantees, particularly for large machinery -- one of Germany's most important exports.

"Exports are so burdened by bureaucratic obstacles that they are breaking down," Jens Nagel, head of the Federation of German Wholesale and Foreign Trade, told Handelsblatt. "We're seeing that trade of even fully harmless products is falling more and more into the hands of Asian competitors."