The US-Germany divide on Iran

BERLIN, Germany — A narrative has attached itself to the American "carrot-and-stick" policy toward Iran, the broad outlines of which go something like this: With Iran failing to bargain in good faith over its nuclear program and China refusing to back meaningful penalties through the United Nations Security Council, the United States and Europe are going to be left on their own with the task of imposing sanctions that are tough enough to persuade Iran to change its behavior.

As much as that story clarifies the course ahead, though, it also obscures important facts — not least, the potential for transatlantic rifts. Germany, for example, may be one of America's closest partners in the nuclear negotiations, but it's also a country that has a very different relationship and very different interests toward Iran. And those differences will undoubtedly make Germany more hesitant than the U.S. to support further sanctions.

For one, America's penchant for imposing punishment on Iran is itself the product of peculiar historical circumstances. The German public, one shouldn't forget, doesn't harbor memories of its diplomats being held hostage in Tehran.

Indeed, the 1979-1981 hostage crisis was the first skirmish of the low-level war that the U.S. and the Islamic Republic have waged for the past 30 years. It's no secret that there's been little love lost between America and Iran: The U.S. public muses on the possibility of military strikes against Iran, while the Iranian regime indulges heartily in anti-American rhetoric, and each has repeatedly tried, through force and diplomacy, to subvert the interests of the other in the Middle East region. It's a relationship that has left America with no diplomatic relations and minimal trade ties with Iran, and little compunction to consider changing its stance.

Germany, by contrast, has maintained sound political and economic ties with the Islamic Republic. It's a policy that has made eminent sense economically: Germany has long been one of Iran's leading trading partners, selling nearly 4 billion euros worth of goods to Iran in 2009 and earning a reputation in Tehran for reliable business dealings and industrial craftsmanship. Iran primarily purchases steel, engineering machines and industrial chemicals from Germany.

Furthermore, according to Iranian statistics, Germany is the country's leading foreign investor, ahead of Saudi Arabia and Turkey. Most prominently, German companies have often lent their expertise to the Iranian energy sector. The German government has long thought of Iran as an important emerging market, and sees fit to bolster trade with Iran by providing billions of euros worth of trade guarantees.

Politically, Berlin has likewise always tried to maintain friendly ties with Tehran. Germany's foreign policy establishment says that it doesn't excuse Iran's human rights violations, but argues instead that strong inter-governmental ties are the best way to ensure leverage over Iran's actions. Proponents of that stance point to Germany's successes at securing the release of certain political prisoners: Critics say that Iran has suffered little condemnation from Germany for its subversion of the Middle East peace process.

Germany's political experts, meanwhile, have often argued that Iran, with its semi-democratic institutions and vital civil society, is Europe's most natural partner in the Muslim Middle East. Where American commentators are more apt to focus on the radicalism of Iran's government, German experts focus more on the pragmatic aspects of Iran's foreign policy.

If America wants Germany to join in on further rounds of sanctions, it's going to have to take these circumstances into account. The German industries that would suffer from robust sanctions have committed lobbies in Berlin to protect their interests. And the German foreign policy establishment is much more wedded to the status quo in the Middle East, in which Iran is an emerging power. Business and political interests in Germany want to prevent Iran from establishing closer ties with China and Russia.

Germany has likely already agreed to support a round of sanctions that target the Iranian Revolutionary Guard, but it probably won't have the stomach to support the more severe sanctions — including an embargo on Iranian imports of refined oil — that are being considered by the U.S. Congress and State Department. Indeed, Germany is considered to be the most strident opponent of unilateral European sanctions toward Iran, a stance it has justified by emphasizing the importance of gaining a U.N. imprimatur.

Of course, Germany doesn't want to risk damaging its political and economic relationship with the United States. Exports to Iran have dropped over the last four years, as the German government has pursued a policy of “discouraging” companies from involving themselves in Iran. Siemens, one of Germany's largest engineering firms, announced last week that it would no longer seek orders in Iran. Other engineering companies, citing Germany's reduced credit guarantees, have also reduced their business with Iran. And the American Treasury Department has convinced German banks to cut off their Iranian business, under the threat of finding themselves suffering penalties for having done business with a “rogue state.”

But many German businesses are still undaunted. It was just last week that the Iranian press reported that an unnamed German company signed a contract worth billions of dollars to work on the transport of Iranian natural gas. And German companies have proven themselves remarkably resistant to public shaming when it comes to their ties with Iran. Most prominently, Siemens has yet to publicly account for its role in providing the Iranian government with the hardware to monitor telephone lines and internet traffic — technology that has been used in the wake of last year's presidential election to subvert protests.

America's greatest asset in the struggle to keep Germany on board may well be Angela Merkel. The chancellor has emphasized, more clearly than her predecessors, that Germany's commitment to the security of Israel requires preventing Tehran from acquiring nuclear weapons. Of course, as head of the conservative Christian Democratic Party, and coalition partner of the business-friendly Free Democratic Party, Merkel may be quite exposed to the pleas of Germany's business lobbyists .

What's clear is that the chancellory has a different perspective on the nuclear negotiations than does the White House. Ultimately, it might not be a question of whether those differences will rear their head, but when.