Germany tightens trade restrictions; Can it do more?
February 2, 2009 Deutsche Welle reported last week that the Merkel government is seeking to end or severely limit export credit guarantees known as Hermes Cover to firms doing business with Iranian firms. (Hermes cover is used when private companies sell to countries or entities in countries deemed risky by credit markets; the government provides guarantees in case the buyer defaults, allowing companies to go ahead with sales). Reportedly Chancellor Angela Merkel, in response to criticism from the United States that it is not doing more to curb trade with Iran, has decided to curtail use of such guarantees. Of the three EU partners leading diplomacy with Iran, Germany has long been the least enthusiastic about sanctions. Wall Street Journal Europe editorial writer Daniel Schwammenthal explains why here. According to Schwammenthal, Germany’s trade with Iran rose more than 14 percent in 2008. More interesting, he cites a recent German-Iranian Chamber of Commerce finding that 75 percent o
