Germany and Iraq sign investment accord

BERLIN, July 23 (Reuters) - Germany and Iraq have signed a bilateral investment agreement aimed at bolstering business ties between Europe's largest economy and the oil-rich state.

German Economy Minster Michael Glos and Iraqi Industry Minister Fawzi Al-Hariri on Wednesday initialled the accord in Berlin as German firms announced plans to invest in Iraq. "Backed by investment guarantees by the federal government ... German firms can in future make an important contribution to the reconstruction of Iraq," Glos said in a statement after also meeting Iraqi Prime Minister Nuri al-Maliki in Berlin.

A spokeswoman for Glos's ministry said the deal was the first of its kind with Iraq since the U.S.-led invasion of the country in 2003.

Under former Social Democrat (SPD) Chancellor Gerhard Schroeder, Germany opposed the invasion but some of its biggest companies are now keen to move in and win contracts.

Earlier, Maliki said German firms needed to take a more active role in Iraq and urged them to visit to see what he said was a markedly improved security situation in the country.

"Iraq is open for any kind of investment from Germany," he said at a news conference, speaking through an interpreter.

Maliki said firms who invested in the country would be granted extra protection in Iraq, where violence has dropped to its lowest levels since early 2004, according the U.S. military.

Germany has been more cautious in its assessment of the security situation in Iraq, but Glos, who visited Baghdad earlier this month, said companies were now expected there.

"The time of the middle men is over," he said.