Sanctions Against Iran Could Cost 10,000 German Jobs

More than 10,000 jobs in Germany could be jeopardized if economic sanctions are imposed against Iran, the German federation of chambers of commerce DIHK said Friday.

"Economic sanctions against Iran would not solve political problems, as the example of Iraq has shown dramatically," it said in a statement. "The German economy would be severely hit in an important growth market. The loss of business in Iran could threaten more than 10,000 jobs in Germany," it added.

The conflict between Iran and the international community has already generated a climate of uncertainty which was having a negative effect on growth, the federation argued.

German exports to Iran had fallen by 10 percent in the first six months of the current year.

The DIHK said that around 50 German companies had branches in Iran and more than 12,000 firms had representatives there.

Iran was the biggest market in the Middle East for German exports in 2005, ahead of the United Arab Emirates and Saudi Arabia. Germany exported goods worth more than 4.4 billion euros ($5.6 billion) there in 2005.

No action so far

The 15-member UN Security Council took no action Thursday as its deadline for Tehran to suspend its sensitive nuclear fuel work or face possible sanctions expired. A report by the International Atomic Energy Agency concluded Thursday that Iran "has not suspended its enrichment-related activities."

US Ambassador to the United Nations John Bolton said Thursday that the council would not act until after a meeting between EU foreign policy chief Javier Solana and Iran's top nuclear negotiator Ali Larijani in Berlin next Wednesday.

Senior officials from Britain, China, France, Russia and the United States -- the five permanent members of the council -- plus Germany, the six powers trying to resolve the nuclear standoff with Iran, are also set to meet in Berlin next Thursday.

The council had demanded that Iran suspend all uranium enrichment and reprocessing activities by August 31 or face possible sanctions, with Western countries suspecting that Tehran's nuclear program hides a bid to develop an atomic bomb.

The six powers had hoped to win Iran's cooperation by offering a package of security, trade and technology incentives. But Tehran remains defiant, asserting its right to enrichment as a signatory of the nuclear Non-Proliferation Treaty.

In the first official reaction to the IAEA report, Iranian President Mahmoud Ahmadinejad vowed that his country "will not give up one iota" of its nuclear rights.

US officials are meanwhile keen to see the council impose gradual targeted sanctions against Iran, beginning with relatively symbolic steps such as bans on travel by Iranian nuclear officials but then progressing to more substantial measures such as financial restrictions and trade embargoes.

"We'll find out in the next several weeks whether we're able to proceed to sanctions," Bolton told CNN television Friday. "We're consulting with European countries. What we're going to aim at is the leadership of Iran and the programs involving their nuclear and ballistic missile capabilities."

He said efforts would be made to avoid sanctions that could hurt the average Iranian citizen.

Three tiers of sanctions

While US diplomats at the United Nations would not go into details, The New York Times on Thursday quoted senior officials saying the United States, Britain, France and Germany had been working on a three-tier menu of sanctions.

The list would begin with low-impact measures including an embargo on the sale of nuclear-related materials, a freeze of overseas assets and a travel ban for some Iranian officials, said officials involved with the talks. If that failed to persuade Iran, the measures a few weeks later would escalate to a broader travel ban and freezing assets of Iranian government members, it said. And if needed, the sanctions would be ratcheted up to include restrictions on commercial flights and efforts to get international banks and financial institutions to stop lending to Iran.

It remained unclear whether such a plan would gain the backing of China and Russia, which both have extensive economic ties with Iran and traditionally oppose the use of sanctions as a diplomatic tool.

Friday, Russian Foreign Minister Sergei Lavrov Russia said: "We will consider a whole range of options for resolving the Iranian nuclear question, but only those options that take us forward toward this goal and not those that prevent us from reaching it."

And he reiterated Moscow's aversion to imposing sanctions on Iran, saying: "a way out needs to be sought through dialogue and not through the path of isolation and sanctions."

Bolton however reiterated Friday that sanctions could be imposed outside of the Security Council.

"There's a wide range of sanctions we could seek to impose on Iran that do not require Security Council authorization," he told CNN. "If for whatever reason, we don't achieve the level of sanctions we want, and even if we do, there are other things we're going to pursue that countries like the European Union, Japan and others can impose by their own national decisions," he added.

The United States has already imposed a broad range of sanctions against Iran.

"In the area of financial transactions, investment transactions and large flows of capital there are a number of things that governments could do already under existing authorities concerning anti-terrorism legislation," Bolton said.