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Wed Aug 31 18:08:07 CAT 2016

Sanctions lifted, Iran's Rouhani heads to Europe to drum up business

Reuters | 24 January, 2016 16:36
Iranian President Hassan Rouhani. File photo
Image by: ATTA KENARE / AFP

President Hasan Rouhani brings the case to Europe this week for Iran as a potential investment bonanza, after the lifting of financial sanctions brought his country of 80 million people back into the world of global commerce.

Rouhani, a pragmatist elected in 2013 on a platform to reduce Iran's isolation, championed the deal under which Iran curbed its nuclear programme in return for the lifting of U.S., EU and United Nations sanctions this month.

On his first trip abroad since the accord took effect, he will lead a 120-strong delegation that includes Iranian entrepreneurs as well as the oil and gas minister and other government officials for five days in Paris and Rome. He will meet Pope Francis and French President Francois Hollande.

A week after nearly all sanctions were lifted, French and Italian officials still do not expect major deals to be signed yet during the trip. Rouhani himself has spoken of a "long road" to Iran's economic integration with the world.

Nevertheless, Iran already demonstrated its hunger for Western goods at an aviation conference on the eve of the visit, announcing plans on Sunday to buy eight A-380 superjumbo jets from Airbus and eventually buy up to 100 planes from Boeing.

The visit also comes as global diplomats are trying to arrange the first peace talks in two years to end the Syrian civil war. Shi'ite Muslim Iran is the strongest ally of President Bashar al-Assad, while European countries back his mainly Sunni Muslim opponents. Recent months have also seen an increase in hostility between Iran and traditional Western ally Saudi Arabia.

"This is a very important visit," said a senior Iranian official. "It's time to turn the page and open the door to cooperation between our countries in different areas."

The visit to France, the first by an Iranian president since 1999, will provide opportunities to smooth over particularly awkward relations with a country that has historically been comparatively friendly.

Paris took a hard line towards Iran among the six powers that were party to the nuclear negotiations, and has been outspoken in its condemnation of Iran's support for Assad and sceptical of Tehran's other Middle East interventions.

"Trust needs to be built. It's like love. It is only the proof of love that counts," said a senior French diplomat.

"On the nuclear accord the relationship is relaxed, but not on the other subjects. There is no change on the Iranian position for now on a number of regional issues ... so the idea (of the visit) is to open a new page," the diplomat said.

Since July, Paris has appeared more conciliatory. A senior French economic and political delegation travelled in September to Tehran. Some 130 firms took part ranging in sectors from agriculture to construction and tourism to lay the groundwork for the first business accords between the two countries since the nuclear deal.

Companies such as oil major <Total TOTF.PA>, planemaker Airbus and car manufacturer Peugeot are all interested in the new opportunities.

PAPAL BUSINESS

"We're far from when everyone was saying we would suffer economically because of our stance on the nuclear file. There will be some accords and progress on deals," said another French diplomat. "But I do sense some prudence among companies."

Without the same diplomatic constraints as France, Italian officials appear more upbeat. Italy has traditionally had close economic ties with Tehran and is rubbing its hands at the prospect of a possible surge in new contracts following the demise of the sanctions regime.

Italy's export credit agency, Sace, has said Italian exports to Iran might rise by some 3 billion euros in the 4-year period between 2015-2018. Exports totalled an estimated 1.56 billion euros last year.

But like in Paris, an industrial source said no major contracts were expected to be signed during the visit. An official with a major energy company said it was still not clear what contracts Iran had in mind for the sector.

After speaking to business leaders, Rouhani will head to the Vatican for talks with Pope Francis. After the nuclear deal, the Pope said he hoped it would be the start of "a definitive step toward a more secure and fraternal world".

The plight of Christians in the Middle East is likely to be discussed, as well as human rights. The Vatican strongly opposes executions, which have increased since Rouhani took office.

"European countries are rushing head first to get into Tehran, but they are bargaining with human rights for short-term commercial and economic interests" said Tahar Boumedra, a former U.N. human rights official in Iraq.

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