BERLIN (Reuters) - Germany plans to revive state export guarantees for companies that want to do business with Iran following the lifting of international sanctions against the Islamic Republic, the Economy Ministry said on Monday.
Iran emerged from years of economic isolation when world powers lifted sanctions over the weekend in return for Tehran compliance with a deal to curb its nuclear ambitions, confirmed by the U.N. atomic watchdog on Saturday.
A spokesman for Economy Minister Sigmar Gabriel said export guarantees were now permitted again though some other issues had to be settled first such as payment of outstanding liabilities.
Berlin is in constructive talks with Tehran on that matter, the spokesman added.
The so-called Hermes guarantees have become a pillar of Germany’s export industry, offering security to companies and banks that do business in markets classified as posing a risk of non-payment.
Firms are eligible to receive such a guarantee if more than half of a product’s components are made locally, but industry and banking groups have called on the government to extend the scope of the system.
The guarantees were originally introduced in 1949 for cases where firms could find no private insurance. In 2014, some 24.8 billion euros ($27.01 billion) worth of exports were backed by Hermes guarantees.
Exports used to be a major driver of growth in Europe’s largest economy, accounting for about 40 percent of GDP.
But a slowdown in China and other emerging markets dampened export growth in 2015, letting private consumption and state spending take over as the main propellants.
The DIHK Chambers of Commerce and Industry expects German exports to Iran to double to 5 billion euros ($5.5 billion) in coming years and reach twice that figure in the longer term.
German machinery, car, chemicals, healthcare and renewable energy firms are likely to be the biggest beneficiaries of the opening up of the Iranian market.
Gabriel, who last July led the first top level German government visit to Tehran in 13 years, will head back to Iran in May to co-chair an economic conference with Iranian counterpart Ali Tayyebnia.
($1 = 0.9182 euros)
Reporting by Michael Nienaber; Editing by Mark Heinrich