Iran Embargo Boycott of Tehran Hits German Coffers
Germany's Finance Ministry is estimating that the current business boycott against Iran has already led to a triple-digit million shortfall in the federal budget. If additional sanctions are imposed, the figure could soon swell to a few billion euros.
Germany exported 5.147 billion worth of goods to Iran in 2006. Exports in 2007, however, are down by 18 percent for the first half of the year.
The German government backs domestic exports to Iran with so-called Hermes export credit protection, and if Iran doesn't pay for the exports, the German government would be forced to foot the bill to German businesses.
Experts at the German Finance Ministry have estimated that budget losses in 2008 alone could amount to 700 million ($1.03 billion) to 800 million euro. In the medium-term, however, that figure could swell to 2 billion.
A number of German companies are already winding down business with Tehran because of direct pressure from the United States. German exports during the first half of 2007 fell by 18 percent -- a decline that continues today. This has already resulted in fewer taxes from these companies and resulted in a budget shortfall in the triple-digit millions.