February 10, 2018 France’s bpifrance [public investment bank] signed a credit agreement worth €1.5 billion with Iran on February 2. The deal will go into effect sometime between May and July 2018, and will provide a financial safety net to companies that engage in business and trade with Iran.
The agreement will allow Iran to import goods from France. Yet Iran will not be able to buy technology or machinery or sell goods to France. As a result, the credit agreement is not expected to have a significant impact on the Iranian economy.
“The line of credit allows Iran to buy certain goods from France. European countries won’t sell technology or machinery to Iran. They plan to export certain goods to Iran,” Mohammad Hossein Barkhordar, a member of Iran’s Chamber of Commerce, Industry, Mining and Agriculture, said. “The interest rate on the line of credit may be as high as 18 percent. It will create jobs in France. Some people also believe that it will offer a way of getting around the sanctions.”
“We would have been much better off had we traded oil for technology and expertise. Advanced countries would not, however, risk selling Iran technology in view of the sanctions,” Barkhordar said.
France has been trying to improve trade relations with Iran since the 2015 nuclear agreement, known as the Joint Comprehensive Plan Of Action (JCPOA). But U.S. President Donald Trump has threatened to withdraw from the agreement. His administration has taken a tougher stance against Iran, demanding that the country’s regional actions and its ballistic missile program should be included in the agreement.
Banks around the world are reluctant to conduct business with Iran. The European Airbus consortium, which has sold Iran dozens of jets, has complained about the overly cautious banks. It argues that the restrictions will benefit its business rival Boeing (which has signed a deal with Iran worth $8 billion).