German economist Gabriel Felbermayr, the designated economic adviser for Austria, warns that the war in Iran will have negative economic consequences for Germany. “The Iran war creates, at least in the short run, longer delivery times and higher prices” he told the newspaper “Welt”. “In a weak German economy we already face enough disruptions – we cannot afford another squeeze”. Higher energy costs and uncertain freight routes will especially hit export‑oriented, energy‑intensive sectors, touching many core industries in Germany.
Felbermayr is optimistic about the long term. “If the Mullahs in Iran were to be ousted and Iran were to become a fully integrated member of the international community, that would be attractive for Europe and the world” he said. He added that the country’s size – about 90 million largely well‑educated people – and its potential for economic catch‑up are significant. “There is a huge economic upside in Iran”.
Regarding Germany’s prospects, Felbermayr sees a stronger economic stimulus from the possible regime change in Iran than from the recently concluded Mercosur agreement with Latin America. “A regime shift in Iran could accelerate German growth by 0.5 percent” he explained. With sanctions lifted, German exporters would again gain direct access to the Iranian market. In contrast, the Mercosur deal would deliver only a 0.1-0.2 percent boost. “Iran offers greater potential because it is geographically closer” he noted, suggesting that Iran could export gas to Europe via a pipeline through Azerbaijan.
