Italy and Iran sign billions of euros of business deals at the start of a Europe visit by Iran's President Rouhani to rebuild ties with the West after years of economic sanctions.
With sanctions lifted, Italy and Iran have signed 17 billion euros worth of business deals during President Hassan Rouhani’s visit to Rome.
Rouhani talked up his country as a regional trade hub and pillar of stability saying that generating economic growth and jobs in the Middle East are crucial to defeating extremism.
Speaking at a business forum he said: “We are ready to welcome investment, welcome technology and create a new export market.”
“Under the new conditions, we want to export 30 percent of what we produce in Iran,” he said, calling for rapid investment in “the safest and most stable country in the entire region”.
“If we want to combat extremism in the world, if we want to fight terror, one of the roads before us is providing growth and jobs. Lack of growth creates forces for terrorism. Unemployment creates soldiers for terrorists,” Rouhani added.
The Italian deals cover areas including energy, infrastructure, steel, shipbuilding and aviation. There was a 3.7 billion euro contract for oil services group Saipem, up to 5.7 billion euros in contracts for steel firm Danieli, up to 4 billion euros of business for infrastructure firm Condotte d’Acqua, 4 billion euros for rail and road company Gavio and 400 million euros for planes from Finmeccanica.
Europe was Iran’s largest trading partner before the sanctions and Italy was second only the Germany, with seven billion euros in trade, falling to 1.5 billion after the sanctions.
Italian officials hope to rebuild that to three billion in exports alone by 2018. Foreign Minister Paolo Gentiloni said: “We maintained a good level of contact, so we can say today, Italy is not returning to Iran, as our institutions, our companies, never really left the country.”
“We are not looking at simple reactivation of our cooperation with Iran, but rather a comprehensive relaunch of a strategic alliance,” Gentiloni added.
From Rome, Rouhani and his 120-strong delegation of business leaders and ministers head to Paris, with a major order of Airbus planes top of the list of wants.
Earlier this week Iran’s Transportation Minister Abbas Akhoundi said: “Our first measure will be a contract with Airbus for 114 new aircraft, which will soon be signed and we will release more details after striking the deal. We could have the first fleet of these airplanes in Iran before 21 March.”
However there are many legal, financial and regulatory hurdles that would have to be cleared before that can happen.
Washington has said Iran may still not use its financial system, raising potential difficulties for jet deals denominated in dollars. If Iran pays for its planes in euros, any money subsequently converted into dollars may create problems.
Iran also faces warnings that Western banks may hold off from backing aircraft and other deals until rules are clear.
“I think we need much more clarity on what (the US Treasury) is going to authorise or not,” said Bertrand Grabowski, a managing director at Germany’s DVB Bank.