PARIS — Iranian President Hassan Rouhani embarks on a European victory tour this week, visiting Rome and Paris to drum up goodwill and business for his country as it seeks to emerge from years of isolation after the lifting of Western sanctions.
Rouhani, a pragmatist elected on a promise to modernize Iran, hailed the phasing out of U.S. and EU economic sanctions last week as a “glorious victory” that would help to boost his country’s economy and pave the way to a new era of openness.
Traveling abroad for the first time since the nuclear deal took effect, Rouhani will meet Prime Minister Matteo Renzi and Pope Francis in Italy before heading to Paris, where he will sit down Thursday with French President François Hollande. It will be the first visit to France by an Iranian leader since 1999.
But Rouhani, who brings with him a 120-strong delegation including several business leaders, needs more than photo-ops out of his trip.
Having signed an agreement to curb Iran’s nuclear ambitions, the president must now prove to supporters and the religious establishment at home that the sacrifice of power and prestige was worthwhile. His success will be measured partly in the number of contracts he brings home.
The effort appeared to pay off quickly. Reuters quoted an Italian government source Monday in reporting that Iran and Italy would sign business agreements worth €15 billion to €17 billion this week, though it was unclear whether these were firm contracts or promises to do business.
The Trump risk
Iranian sources told POLITICO that Tehran’s main interest in Europe was to find big corporations willing to invest to modernize its oil and gas industry, as well as its automotive sector.
Iran has already shown an eagerness to start trading with Europe. A day before Rouhani’s visit, Tehran announced plans to buy eight A380 superjumbo jets from Airbus and later, up to 100 planes from Boeing. European countries, meanwhile, are competing for access to a vast potential market, with French, German and Italian delegations having made trips to Iran.
Italy is well-primed to restart its business relationship with Iran. It was Iran’s largest trading partner in the EU until 2006, and Italian exports to the country are set to grow from $1.1 billion in 2014 to nearly $3 billion in 2018. In November, a group of 378 Italians from 12 banks and 178 companies flew to Tehran — the biggest European delegation since the thaw in relations.
But the type of investments Tehran wants — in oil and gas infrastructure, transport and the automotive industry — cost billions of dollars, and few big corporations are willing to risk losing money if the nuclear deal doesn’t hold.
Another risk factor is political: The United States and Iran both have elections this year. A shift in power in either place, whether toward Republican leadership in the U.S. or conservative rule in Iran, could derail the deal. Leading U.S. Republican presidential candidates, including Donald Trump and Ted Cruz, have been harshly critical of the nuclear deal.
“The next elections in the U.S., as well as those in Iran could radically change the current scenario and potentially jeopardize the agreement,” said Ellie Geranmayeh, a policy fellow at the European Council on Foreign Relations.
Love takes time
In addition to investment worries, Rome, Paris and other European capitals are uneasy about Iran’s role in conflicts in Syria and Yemen.
France, which had a hawkish position during nuclear negotiations with Iran, has criticized Tehran’s support for Syrian President Bashar al-Assad and other Middle Eastern interventions. A diplomat said the visit to France was a chance to “open a new page,” but that Paris’ position toward Iran on most issues remained cautious.
“Trust needs to be built. It’s like love. It is only the proof of love that counts,” Reuters quoted the senior French diplomat as saying. “On the nuclear accord the relationship is relaxed, but not on the other subjects. There is no change on the Iranian position for now on a number of regional issues.”
Sources at the Italian Foreign Ministry told POLITICO that Rome would use Rouhani’s visit to press the Iranian leader into opening talks with Saudi Arabia and urge him not to exacerbate already strained Sunni-Shi’a ties in the region.
European diplomats are also likely to raise human rights issues with Iran — notably with regard to executions, which have become more frequent under Rouhani. While the Iranian leader is in Paris, dissidents and European protesters will rally against human rights violations in Iran and its support to armed conflict in the region.
This article was written for Politico Europe