Merkel stops India-Bundesbank Iran oil deal: report

April 6, 2011 - 0:0

BERLIN (The Economic Times) - Chancellor Angela Merkel has put a stop to plans for India to channel oil payments to Iran through the German central bank, a press report said Tuesday.

According to the Handelsblatt business daily, India, under U.S. pressure to break direct commercial links with the Islamic republic, intended to place money for its Iranian oil imports in an account with the Bundesbank.
The Bundesbank would then transfer the money -- around nine billion euros ($12.8 billion) annually -- to the European-Iranian Trade Bank AG (EIH), based in the northern German city of Hamburg, the paper had said.
The German government had said it was powerless to stop the deal because EIH , also known as EIHB, was not subject to sanctions because the bank was not involved in financing Iran’s nuclear activities.
But now, Berlin has stepped in, the Handelsblatt cited high-ranking German government officials as saying on Tuesday. Payments for oil already delivered can go ahead, but no new transactions will take place, the paper said.
Contacted by AFP, neither the Bundesbank nor the German economy ministry were immediately available for comment.
Germany has long been under fire for its close business ties with Iran, with the country’s exports there totalling 3.8 billion euros in 2010, according to official figures.
Sales generated by German industrial giant Siemens in its last business year, which ended September 30, rose more than 20 percent to 680 million euros, the Wall Street Journal reported Tuesday.