Germany must rethink over Iran sanctions

Obediently, if not slavishly Germany has gone along with sanctions against Iran oil. So with Russian oil too. Yet the globe is changing. Sanctions regime against both these countries is falling apart. Interestingly Germany has taken a front seat in supporting sanctions and opposing any easing of them. Germany needs to do a rethink.

When Trump in March this year ordered a temporary suspension of Russian oil sanction in order to ease the pressure over price hike globally, German Chancellor Friedrich Merz went over the board criticizing U.S. decision and branding it as a wrong move. He went on to express surprise that this unilateral move by Trump without consulting the G7 countries would be detrimental to Ukraine’s interest.

As regards to Iran oil sanctions, Germany maintained the same tough stand.  German officially pronounced that “every dollar spent on oil from Iran stabilizes a regime that is fundamentally opposed to our values.”  

From the Far East comes the blow: China has informed refiners operating inshore to ignore US sanctions over Iranian oil imports into the country. Whichever the primary or secondary sanctions that US would impose upon Chinese businesses, China would back these firms to withstand any and every measures American Government would take against them. Put it other words Iran oil sanctions is going to be a thing of the past. 

It can be easily expected that USA would move against the recalcitrant Chinese refiners. But the writing is on the wall: you touch them we torch you. Understandably, the era of sanctions regime is quietly put to doldrums. Once China sneezes the globe would get cold so to speak. Before long Iran oil sanctions would lose any claim of legal enforceability.

Where is Germany in this scheme of things? Already G7 is non-functional as regards to American predilection. It is food for thought that Germany do a rethink initially over Iran oil and later extend it to Russian energy. Look at the following:

1. Germany's unemployment hit 6.4%.

2.  Over 3 million people are out of work.

3. Energy costs explodes and the energy leverage Germany enjoyed previously has thinned out

4. Investments in the domestic sector is cracking

5. German economy is in the dog house

Hence it is a vital matter for Germany to navigate strategy amid geoeconomics, by putting the economic machinery back in full swing.

 

Cheers!

 

Muthu Ashraff Rajulu

Strategy Adviser

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Strategy Adviser