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Rouhani’s charm offensive pays off in Europe and Iran

Rouhani's diplo-financial offensive in Europe will definitely pay off soon and turn Iran into a tourism, investment and business attraction

Iranian President Hassan Rouhani kicked off his first official trip to Europe – excluding his journey to Davos in January 2014 to participate in the World Economic Forum – on 25 January by visiting Italy and concluded it on 29 January with the second leg of his European tour ending in France. He received a warm welcome and inked multi-billion dollar deals in both countries, making the headlines worldwide and blowing minds both at home and abroad.

Visiting Europe is not by definition something unconventional or far-fetched for a foreign head of state. But for the president of a country besieged by more than a decade-long of grueling economic sanctions and inevitably ensuing political isolation, it should be exciting and unusual.

The Italian Prime Minister Matteo Renzi and French President Francois Hollande had previously met President Rouhani on the sidelines of the UN General Assembly in September 2014 and 2015, and seemed quite enthusiastic to host the Iranian leader in their capitals.

The election of a pragmatic, moderate politician as Iran’s chief executive had raised hope for the inception of a new era of interaction between the oil-rich nation and the world, and a serious departure from the tumultuous, uneasy years of Mahmoud Ahmadinejad in office when “confrontation” constituted the basis of Iran’s foreign policy.

In retrospect, few people could say with 100 percent certainty some two years ago that there would be an agreement at all that could roll back the sensitive parts of Iran’s nuclear activities and put an end to more than 10 years of showdown, and in return, bless Iran with the termination of economic sanctions and reintegration into the international community.

However, President Rouhani’s patience with unquenchable domestic criticism from hardliners and the commitment and steadfastness shown by Iran’s nuclear negotiating team, headed by the nationally-adored Foreign Minister Javad Zarif, bore fruit on 14 July last year, and a comprehensive nuclear deal with the six world powers (Britain, China, France, Germany, Russia and the United States) was officially concluded, and began to be implemented on 16 January this year.

President Rouhani’s trip to Europe, described as “historic” by a number of media organisations, was a clear indication of the beginning of a new epoch in Iran’s foreign relations, a precursor to an all-out economic rejuvenation of the nation after a decade of virulent embargoes and a sign that the policy of moderation and prudence has come to yield positive results and extricate the country from seclusion and unremitting hostility from the outside world.

Figures signify that prior to the introduction of the most rigorous punitive measures in 2011, Iran was the European Union’s 23rd largest trade partner in the world in 2010, placed above states like Israel (28), Qatar (33) and Egypt (35). At the same time, Iran was the 22nd largest exporter of goods and services to the EU, positioned higher than South Africa, Venezuela and Ukraine.

At the same time, Iran also saw EU atop its list of major business partners over many years. Italy, Germany, France and Britain would come and go as the top trading partners of Iran among the European Union member states between 2006 and 2012. The bilateral trade between Iran and the EU 28 hit an all-time high of $11.3 billion in 2010, and then began to plummet, especially once the oil embargo was enforced in July 2012.

Now, with the elimination of the sanctions that had obfuscated Iran’s trade with the EU and obviously deprived the 28-nation bloc of a lucrative business with 80 million potential consumers, there’s understandably a rivalry between the major countries in the group to regain and revive their lost ties with Iran and “compensate for” the missed opportunities of the past.

In Italy, where he was greeted in the most dignified way and received by President Sergio Mattarella at the Quirinale Palace in an official ceremony, President Rouhani signed 14 mega-deals worth up to $18.4 billion, including a $3.7 billion contract with the giant oil and gas contractor Saipem – an Eni subsidiary, whose shares climbed 18.5 percent the same day the deal was signed.

According to the deal, the Italian firm would undertake the revamping and upgrading of the Pars Shiraz and Tabriz refineries in Iran. However, the Italian firm was lucky to sign a second contract with Iran, described by the company as a memorandum of understanding, to work on the possible construction of a 1,800-kilometer-long network of pipeline in Iran.

Danieli, ranking among the three largest suppliers of equipment and plants to the metal industry in the world, also signed a $6.2 billion agreement with Iran to set up a joint venture called Persian Metallic, and deliver metal industry equipment and modern machinery to Iran. An agreement was also underwritten to introduce Italy as the main developer of the railroad network in the Islamic Republic.

Rouhani’s Italy trip included a very pivotal visit to the Vatican, where for the first time since 1999, an Iranian head of state was able to meet the leader of the Roman Catholic Church. Rouhani met Pope Francis in the Vatican, and had a reportedly cordial 40-minute sitting with the pontiff. He asked the Pope to pray for him and talked of Islam’s ambitions for establishing global peace and fraternity, and the need for the followers of divine faiths to speak out against blasphemy.

The Pope also asked the Iranian president to activate his country’s potential to deter the menace of terrorism and arms smuggling from the Middle East and bring security and peace back to the region.

Rouhani presented the Pope with two precious, typically Iranian gifts: a prized book of illustrations by noted Iranian master of painting and miniatures Mahmoud Farshchian and a piece of ornamented Persian rug: to those who haven’t heard about Iran too much, it’s the homeland of the most famous Persian carpets and rugs which eminently beautify homes and offices worldwide.

During Rouhani’s trip to Italy, the mainstream media misleadingly attempted to divert public attention to the fringe issue of the naked statues in the Capitoline Museums, the venue hosting the meeting between Rouhani and Renzi, being covered using plywood panels by the Italian authorities as a courtesy to the Muslim leader and his accompanying delegation.

Some newspapers aggrandised the trivial story and made it a central debate, highlighting the public reactions to the incident both inside Iran and abroad; however, it was not the first time that the Italian government had demonstrated diplomatic sensitivity and precluded offense to its guests, so there was no reason to exaggerate it unduly.

“Gazing Ball,” a nude sculpture by the American artist Jeff Koons was concealed ahead of a visit by Mohammed bin Zayed bin Sultan al-Nahyan, the crown prince of Abu Dhabi to Rome in October 2015.

Perhaps the reason for the media amplification of the occurrence was to underscore the extent of conservatism in Iranian society or the possible backlash President Rouhani could receive from the hardliners in Tehran if he were captured encountering the naked statutes without showing a fierce reaction or objection. However, it’s simply not a matter of conservatism, but cultural delicacies that are usually taken into consideration in such high-profile meetings.

President Rouhani’s next destination was Paris. He was officially welcomed by the French Foreign Minister Laurent Fabius and a guard of honor at what The New York Times described as “one of the French Republic’s most sanctified spots”: Les Invalides historical complex. Subsequently, President Francois Hollande received his Iranian counterpart at the Elysée Palace, and within a few hours, the torrent of contracts and agreements ready for signature began to be unleashed.

In Paris, President Rouhani signed the most enormous contract of his European tour, and ordered 118 commercial passenger planes from the Toulouse-based civil aircraft manufacturer Airbus. Comprised of 73 wide-body and 45 single-aisle aircrafts, Iran’s aerial shopping list is estimated to be worth $27 billion.

The Minister of Roads and Urban Development Abbas Akhoudi has said the deal is one of the largest foreign contracts ever signed in the history of the Islamic Republic. All the 118 planes will be operated by Iran Air, the country’s flag-carrier airline and the oldest airliner in the Middle East, having suffered from an ageing, outdated fleet that hasn’t been renovated for more than three decades due to the trade embargoes.

It’s said that since 1980, some 1,200 Iranians have lost their lives in deadly air accidents caused by the technical problems of Iran’s malfunctioning, ailing jets. The delivery of the huge convoy of modern aircraft by Airbus will begin this year and the last batch will be handed over in 2022.

According to a separate contract, the French airport authority Aéroports de Paris and the Bouygues industrial group will help Iran construct the second terminal of Tehran Imam Khomeini International Airport. The Iranian authorities hope to turn the Tehran international airport into a commercial and aviation hub in the Middle East. Hopes are pinned on increasing the capacity of IKIA airport to the point that it can provide service to over 20 million passengers every year.

The hardliners in Tehran were disappointed at the fact that Hassan Rouhani’s trip to Italy and France emerged a success and turned a new chapter in Iran’s trade and political ties with the community of nations.

Even some conservative news agencies openly protested President Rouhani for “wasting” the nation’s financial resources on ordering luxury aircrafts –they were apparently angry that it was Rouhani, not their favorite president, who signed off on such an outstanding agreement.

Yet the general public is buoyantly optimistic that Iran is now reconnected to the world and coveted by international investors who cannot resist the lure of spending their capital in a country with an educated, reform-minded population and untapped, beneficial trade opportunities. Iranian citizens understand that foreign investment and cooperation is tantamount to the rebuilding of the nation after several years of injury and mayhem caused by the sanctions.

The normalisation of Iran’s trade relations with the world denotes that it’s no longer considered a pariah state, and instead is being seen as a regional power pushing away the scaffolding of sanctions that kept its economy suffocating and its diplomatic relations smothered.

While Rouhani was in Europe, Iranians were cheerfully talking about the unprecedented trip on Twitter, Facebook and elsewhere, lamenting the opportunities that Ahmadinejad squandered in his eight years in office while the crude price was its height, sometimes flying above $109 per barrel, which could have laid the groundwork for an all-out economic revolution in Iran.

Now, Rouhani is running the country with oil revenues that are dramatically lower than five or six years ago – at best, Iran sells its crude for $40 per barrel. However, the point is that the moderate cleric has demonstrated diplomatic finesse and discretion and heeded the calls of his nation for constructive engagement with the international community.

Even though the public hasn’t yet experienced relief from rising consumer prices and unemployment, it is clear that the people are content with Rouhani’s decision to revitalise the nation’s transportation infrastructures, heavy industries and above all, that he has embarked on a diplo-financial offensive in Europe that will definitely pay off soon and turn Iran into a well-liked tourism, investment and business attraction.

- Kourosh Ziabari is an award-winning Iranian journalist and media correspondent. He is staff writer with Iran Review and a reporter with the California-based Fair Observer. He has also contributed to Huffington Post, Your Middle East, International Policy Digest, Gateway House and Tehran Times.

The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Eye.

Photo: French President Francois Hollande (L) welcomes Iranian President Hassan Rouhani before a meeting at the Elysee Palace in Paris on 28 January, 2016 (AFP).