When Prime Minister Ehud Olmert last visited Germany in December 2006, he stated in strong terms that Germany should end its trade relationship with the Islamic Republic of Iran and stressed that the interests of private businesses should not be able to influence Germany’s Iranian foreign policy.

Prior to his current visit, Olmert had not issued a public statement on German-Iranian relations. There has been a surprising dearth of German media coverage in advance of his trip, which is unusual in Germany where extensive reporting of Israel is a common fixture of the media landscape.

Olmert’s visit comes at particularly sensitive moment in German-Israeli relations. In March, the German cabinet, including Chancellor Angela Merkel, will travel to Israel to hold a special cabinet session in celebration of Israel’s 60th anniversary, yet many critics assert that Germany is failing to embrace a confrontational posture with Iran, a regime that has repeatedly threatened to wipe Israel off the map.

Germany maintains strong economic ties to Iran, and remains the number one European export partner for the Iranian economy. In 2007, Germany sold €3.5 billion of goods to Iran, including €1.5 billion worth of engineering products and high tech equipment. Security and terrorism experts argue that Germany is uniquely positioned to tighten the economic screws on Iran.

When questioned if the flourishing trade relationship between Iran and Germany will be a subject of discussion for Olmert and Merkel, a German government spokesman said, “it cannot be ruled out.”

The growing infrastructure of the Iranian economy is heavily dependent on German technological know-how. Michael Tockuss, the former president of the German-Iranian Chamber of Commerce in Teheran, said, “Some two-thirds of Iranian industry relies on German engineering products.”

The vital importance of German engineering firms for the Iranian economy attracted the ire of American diplomats last year in Germany who questioned the decision of German employers to conduct business with Iran, a country sanctioned twice for violating United Nations Security Council resolutions. Critics assert that sophisticated engineering technology lends itself to “dual-usage,” and can be rapidly converted for nuclear military purposes.

Germany’s Federal Office of Economic and Export Control and companies like the engineering giant Siemens, a builder of power plants, provide virtually no transparency concerning commercial activity in Iran. Siemens plays a significant role in Iran’s energy and medical sectors.

The company, whose economic deals total over half a billion dollars in Iran, conceded in late January that it spent €19 million to bribe Iranian officials to do business with it. The Munich prosecutor’s office is investigating the corruption. Public prosecutor Anton Winkler declined The Jerusalem Post‘s query for comment on the nature of the graft scandal.

Although German exports to Iran shrank by 15% percent last year, a dramatic 50% increase of Iranian exports to Germany, totaling €580 million, took place in 2007.

Disclosures that the Economics Ministry brazenly organized several workshops with the German Chambers of Industry and Commerce in the city of Darmstadt last year to promote “market entry and opportunities of expansion” in Iran attracted coverage in The New York Times.

“The German business relationship with Iran has not changed. Business as usual continues. They have become smarter and conceal the relationship,” said Nasrin Amirsedghi, an Iranian intellectual and critic of the Iranian regime.

Amirsedghi argues that the German government employs a “double strategy” with Iran. A telling example is, while Germany’s Economic Ministry has reduced the Hermes export credit guarantees it issues for trade with Iran, the weekly magazine Spiegel reported this past autumn that an Iranian-owned bank in Hamburg is being allowed to fill the credit gap.

Matthias Küntzel, a German political scientist who specializes in German-Iranian relations, told the Post that Germany’s posture toward Israel represents a “big contradiction between words and deeds.”

Chancellor Merkel said in a speech in February 2006, “A president who questions Israel’s right to exist, a president who denies the Holocaust, cannot expect to receive any tolerance from Germany. We have learned our history.”

But Küntzel stressed that Germany had not initiated unilateral actions against Iran’s economy and he believed that Germany wished to avoid the Olmert visit because he will highlight the “embarrassing situation” of German-Iranian economic relations for the national security of Israel.

Küntzel argued that the lack of press coverage is “more evidence that Germany did not want the visit.” The government spokesman declined to state which government initiated the meeting.

Jewish organizations in Europe have also voiced their concern over Germany’s ties with Iran.

“While it is appropriate to celebrate the various anniversaries of German-Israeli relations and Israel’s 60th birthday, this must not be a substitute for transparency on the main issue between the two countries which relates to Israel’s very existence: the Iranian nuclear program. Germany’s position on this matter remains ambiguous. Its politicians regularly speak of Israel’s right to exist, but this remains empty rhetoric if no decisive action to stop Iran’s anti-Semitic project follows. Pussyfooting around the problem won’t do this time,” said Dr. Yves Pallade, who has written extensively about German-Israeli relations and directs the Foreign Affairs Network of B’nai B’rith Europe.