With Sanctions Gone, Iran Goes On A Shopping Spree In Europe

The article was first published on NPR's Parallels blog.

Less than two weeks after international sanctions were lifted, Iran is already cutting megadeals with Europe. The French automaker Peugeot-Citroen said Thursday it will return to Iran, while Iran appeared poised to buy at least 100 planes from Airbus.

Thursday's developments came during a visit to France by Iran's President Hassan Rouhani, and follows his stop in Italy earlier this week, where he announced business agreements valued at around $18 billion.

"France is available for Iran," said French Prime Minister Manuel Valls, who added that additional deals in other fields were also expected. "Iran can count on France."

"Let's forget past differences and start anew," Rouhani said in a speech to business leaders, Reuters reported.

Iran's economy has long been hampered by mismanagement as well as international sanctions. The toughest punitive measures were imposed in recent years in response to the country's nuclear program.

The nuclear sanctions were lifted on Jan. 16 after Iran met its obligations under the deal it reached last summer with six world powers. That has freed up tens of billions of dollars that were frozen in international banks by the sanctions.

Peugeot Will Return To Iran

Peugeot-Citroen announced a joint venture with Iran's Khodro carmaker to produce 200,000 cars a year in Iran. Peugeot pulled out of Iran in 2012 due to the sanctions. Under the new deal, the first cars will be produced in 2017 as part of an agreement worth $436 million over the next five years.

Iran is also eager to acquire a new generation of civilian planes to replace its current fleet, which is among the oldest in the world. Iran bought its aircraft from Boeing when the U.S. and Iran had close ties before the 1979 Islamic revolution. But since then, Iran has struggled to obtain spare parts and buy new planes.

An Iranian deal with Airbus has been widely discussed in the media in recent days, though there's been no formal announcement. According to Iranian state television, Airbus would deliver 100 passenger planes to Iran over the next four years. French officials said the final details were still being worked out, according to Reuters.

Europe was Iran's largest trading partner before the sanctions began to bite, and European countries have been pushing to redevelop those ties. The U.S. still maintains many sanctions on Iran linked to human rights and terrorism. As a result, U.S. businesses still face a host of restrictions, and American companies are not expected to enter the Iranian market in a major way.

Reconnecting With Europe

Rouhani's European tour is a major step forward in his effort to reach out to the world and reduce Iran's isolation, particularly in the West. But Iran still faces many Western critics over human rights at home and its role in conflicts throughout the Middle East.

Rouhani, meanwhile, took a dig at Europe during a speech to the French think tank IFRI.

The Iranian president said Iran has hosted huge numbers of Afghan refugees for decades, and contrasted that with Europe's response over the past year in the face of a migrant influx, mostly from Syria.

"Our nation has shouldered such a heavy weight through all these years, accepting 3 million migrants without complaining," he said. Afghans began pouring into Iran after the Soviet invasion of Afghanistan in 1979. There are still nearly 1 million Afghan refugees in Iran today.

"Europeans, with all their economic power and resources, were saying, '100,000 migrants have arrived to our soil, what do we do now? 200,000 have swarmed (our borders), what do we do now?'" Rouhani said.