Why Germany Coddles Iran

Berlin’s split with Washington on Iran long predates Trump—and it speaks to a dangerous naivety in German strategic thinking.

Like most Germans, I am no admirer of the current American president. Donald Trump is wrong about the value of alliances, wrong about the utility of tariffs and trade wars, and wrong in his fondness for “alternative facts.” But on at least one issue, President Trump has gotten it right: namely, his decision to take the United States out of the nuclear deal with Iran just over one year ago.

In withdrawing from the so-called Joint Comprehensive Plan of Action (JCPOA), however, Trump has also triggered an immense crisis in the Transatlantic relationship. Chancellor Angela Merkel has spoken openly of a “split between the United States and the Europeans on Iran.” How is this split to be explained? And how can it be overcome?

Nuclear blackmail—the threat that, without the deal, Iran would go ahead and build a bomb—shaped the dynamic of negotiations from the start. Iran’s Foreign Minister Javad Zarif proved himself a master of wielding these threats. At the beginning of the negotiations, he warned on the regime-affiliated Press TV: “You only have one way to ensure that the Iranian nuclear program remains peaceful. You must allow the nuclear program to be able to develop in a peaceful international context.”

Intimidated, the P5+1 negotiators—led by Secretary of State John Kerry and an overeager Obama Administration, which seemed desperate to secure a deal—abandoned one position after another. Concerns voiced by the French delegation, that the deal’s provisions were too generous and that the talks were being rushed, were brushed aside. Finally, negotiators arrived at the current deal, which permits nuclear enrichment and its further development, prevents IAEA inspectors from examining military sites, allows the regime to continue its missile programs, and will expire a mere decade after its signature.

The deal was unpopular with Republicans from the moment it was cobbled together, and Donald Trump didn’t stray from party orthodoxy on the campaign trail. When in office, he proceeded to dismantle it rather than prevaricate. In explaining his decision to ditch the deal, Donald Trump railed against the idea of the United States being blackmailed by a second-rate power. But he also correctly noted that the deal itself had not brought peace to the Middle East, as many of the deal’s boosters had claimed it would. On the contrary, Iranian regional meddling increased, in turn causing a mass exodus from Syria and Iraq—and all this without Iran having to abandon the pursuit of its uranium and rocket programs.

Trump’s decision is not without risk. Given the nature of the Iranian regime, irrational responses and war scenarios can’t be ruled out. Exactly one year after the United States left the deal, Iranian President Hassan Rouhani announced a partial withdrawal, saying Iran would keep excess enriched uranium and heavy water instead of selling it. Continuing the policy of nuclear blackmail, he threatens to resume higher uranium enrichment after 60 days. However, at least for the time being, Tehran seems not to be interested in a massive escalation.

Trump’s alternative approach—to put sufficient economic and political pressure on the Iranian leadership to compel it to sign a new agreement that would address not only Iran‘s nuclear ambitions but also its missile program and regional warmongering—may be a long shot, but it is worth trying. Effective sanctions, however, require the cooperation of Iran’s most important trade partners, Germany and the European Union. And that is where the problem starts.

Immediately after President Trump left the nuclear deal and imposed new sanctions, the German Chancellor announced her opposition to his decision, declaring “that the current European sanctions relief should of course remain in force.”

Over the following months, the E-3—France, Great Britain, and Germany—conceived of a new payment mechanism (christened the “Special Purpose Vehicle”) aimed at undermining new sanctions imposed by the United States. At the end of January 2019, a new company called Instex (shortened from “Instrument in Support of Trade Exchanges”), run by a German banker, has been registered in France “with a view to providing a positive impact on trade and economic relations with Iran,” according to an EU statement.

Then in February, key European leaders demonstratively boycotted a U.S.-organized security conference in Warsaw that focused on Iran’s malign behavior in the Middle East. Although 60 nations participated, the foreign ministers of France and Germany and the EU foreign policy chief preferred to stay away. In so doing, they seemed to prioritize snubbing the Trump Administration over countering Tehran’s aggressive ambitions in the Middle East.

True, there have been some European measures against Iran. In January of this year, the EU sanctioned Iran in response to its alleged carrying out of targeted killings on European soil. In addition, the German government withdrew the operating permit of the Iranian airline Mahan Air in connection with its use in the Syrian conflict. France followed with a similar action in March. However, these were small moves that have not altered Europe’s broader effort to save the nuclear deal.

European observers have pinned the blame for this Transatlantic rift on the American side—on Trump’s belligerent megaphone diplomacy. But that is an ahistorical analysis.European observers have pinned the blame for this Transatlantic rift on the American side—on Trump’s belligerent megaphone diplomacy. But that is an ahistorical analysis. The divergence on Iran goes back a long way, with a more conciliatory posture being most pronounced among the Germans.

As early as 1995, when President Bill Clinton prohibited American firms from trading with Iran because of the regime’s nuclear ambitions, it was Germany that systematically counteracted the American efforts to impose international sanctions. Hossain Mousavian, then the Iranian Ambassador in Germany, wrote that Tehran was “aware in the 1990s of Germany’s significant role in breaking the economic chains, with which the USA had wrapped Iran . . . Iran viewed its dialogue and relations with Germany as an important means toward the circumvention of the anti-Iranian policies of the United States.”

Washington, however, persisted in its efforts. As former Secretary of State Warren Christopher detailed in his memoirs, “We constantly prodded them [the Germans] to distance themselves from Iran and to suspend trade, as we had done . . . Unfortunately, the struggle to stop our allies from doing business with Iran has not yet succeeded.”

In September 2004, German Foreign Minister Joschka Fischer explained the thrust of his approach bluntly: “We Europeans have constantly advised our Iranian partners in their own well-founded interest to view us as their protective shield,” he stated in a speech disseminated by the German government. Yes, you read that right: Europe was to be as a shield for Iran, defending it from a dangerous America. Though Berlin later adhered to the Iran sanctions decided by the United Nations, the goal of German diplomacy was to impose as few sanctions as possible—and only as many as were strictly necessary to keep the United States doing diplomacy rather than resorting to force.

The current split between the United States and Germany on Iran is nothing new. It has been affecting bilateral relations for decades. The question remains: What drives Germany to stubbornly defend the nuclear deal and maintain good relations with the world’s only country that denies the Holocaust and wants to eradicate the state of Israel?

It’s easy to believe that German authorities are simply trying to protect trade interests. But this explanation doesn’t quite clear the bar. Big companies have left Iran in droves over the last few months despite the rollout of the above-mentioned SPV, and the hit that those companies will take as a result will be limited. In 2017, German exports to Iran comprised only about 0.2 percent of total German exports. That same year, Iran was 33rd among recipients of Europeans exports, behind countries such as Kazakhstan and Serbia.

No, it’s more complicated than that. There are at least two other factors that play into the dynamic.

Factor One: The Traditional Link

Germany’s relationship toward Iran is based, first of all, on “historically shaped strategic preferences,” to quote Peter Rudolf, a researcher from the German Institute for International and Security Affairs. Or, as the current website of the German Ambassador in Tehran states: “German-Iranian relations have a long tradition and great potential. Let us work together to further deepen the good relationship.”

In the mid-1920s, Germany was the founder of Persian industry, providing Iran with the backbone of its industrial infrastructure and the trained personnel needed to run it. Between 1933 and 1941, according to the scholar Yair P. Hirschfeld, the Nazi share of Iranian imports rose from 11 to 43 percent while the German share of Iranian exports rose from 19 to 47 percent. (Another aspect of the Nazi period, which continues to be important in Iran, was pointed out in 1996 by Iranian President Rafsanjani: “Our relations have always been good. Both [peoples] are of the Aryan race.”)

In 1952 West Germany again became Iran’s leading trading partner, a position it held almost continuously until 1979. After the Islamic revolution, West Germany’s trade with Khomeini’s Iran rebounded from 2.8 billion Deutsche Marks in 1980 to 7.7 billion in 1983. “It is striking to see how Persia’s new rulers are specially favoring German firms with orders, given that German business leaders and politicians had kowtowed to the Shah with special fervor,” wrote Der Spiegel at the time.

In the following years, Germany remained not only Iran’s most important high-tech partner but also its most trusted one. “The only people whose image is incredibly positive are the Germans,” recalled a former German ambassador to Iran in 2013. “What is good must be German.”

Old habits die hard. In order to maintain this special relationship and this positive attitude, Berlin is predisposed to favor “engagement” over bullying. In practice, they are downplaying the brutal reality of the Iranian regime.

Factor Two: Pride

For Germany, the nuclear deal with Iran is more than just any agreement. It was one that Berlin had a huge hand in crafting. The P5+1 talks enhanced Germany’s status: For the first time in the postwar period, Berlin was invited to shape world policy together with the five veto powers of the United Nations. And Germany actually achieved something approaching double representation at these talks—through both its national representative and the EU’s lead negotiator, Helga Schmid. Schmid, a former office manager of Joschka Fischer who has good contacts with Merkel, established herself as an authoritative figure in the talks with the Iranian side. As a deputy to Catherine Ashton and Federica Mogherini, the EU’s official foreign policy representatives, she led subgroups of the P5+1 and prepared talks with chief negotiators. Germany put in the hard work to try to make it work.

And if it doesn’t work, Germany has emotional reservations about any alternatives. As an economic giant and military dwarf, the country would certainly be out of the game in the event of military operations. This fear of being sidelined is, as always, celebrated as a moral triumph. The Iran nuclear deal is held up as yet another example of the righteousness of German insistence that diplomacy always be preferred to force—a choice that was vindicated during the Iraq War and they think will be vindicated again.

The most important goal of German Iran policy remains to keep dialogue channels open. Little thought is given what exactly 40 years of engagement have actually achieved. Iran remains an aggressive and illiberal theocracy which continues to menace both its own population and its neighbors.

The reality understood in Washington is that America can’t change Iranian behavior alone. This goal can only be achieved together with Washington’s European allies. As long as Europe creates loopholes, the pressure will be insufficient.

That said, the Trump Administration’s bullying rhetoric has at times been counterproductive. Vice President Mike Pence’s hectoring speech at the last Munich Security Conference merely hardened positions—which only helps Tehran. The Iranian leadership is determined to deepen divisions between Europe and the United States. Washington should emphasize unity. All too often, Trump’s calls for “America first” sounds like he’s actually saying “America alone.”

American diplomacy with Europeans should concentrate on Tehran’s amply documented crimes. Iran’s illegal nuclear archive, its murderous incitement against Israel, Hezbollah’s rearmament, the Revolutionary Guard warfare in the region—all of these offenses fly in the face of shared Western values.

The Americans might also appeal to the historical conscience of Germans. As Josef Schuster, the head of the Central Council of the Jews in Germany, put it:
It seems paradoxical that Germany, as a country that is said to have learned from its horrendous past and which has a strong commitment to fighting antisemitism, is one of the strongest economic partners of a regime that is blatantly denying the Holocaust and abusing human rights on a daily basis. I endorse an immediate stop to any economic relations with Iran. Any trade with Iran benefits radical and terrorist forces and presents a danger and destabilizing factor for the region.
For the time being, Schuster’s statement has not triggered any discussions in Germany. His approach, however, provides the best basis for overcoming the U.S.-European split on Iran.