Europe subsidize's Iran's terror regime

Opinion Journal:

On the record, Europe claims to be as concerned as America about a nuclear-armed Iran. The record also shows, however, that Europe's biggest countries do a booming business with the Islamic Republic. And so far for the Continentals, manna trumps security.

The European Union--led by Germany, France and Italy--has long been Iran's largest trading partner. Its share of Iran's total imports is about 35%. Even more notable: Its trade with Tehran has expanded since Iran's secret nuclear program was exposed. Between 2003 and 2005, Europe's exports rose 29% to €12.9 billion; machinery, transport equipment and chemicals make up the bulk of the sales. Imports from Iran, predominantly oil, increased 62% to €11.4 billion in that period.

In the absence of an official embargo against Tehran, private EU companies have sought commercial opportunities in Iran. But the real story here is that these businesses are subsidized by European taxpayers. Government-backed export guarantees have fueled the expansion in trade. That, in turn, has boosted Iran's economy and--indirectly by filling government coffers with revenues--its nuclear program. The German record stands out. In its 2004 annual report on export guarantees, Berlin's Economics Ministry dedicated a special section to Iran that captures its giddy excitement about business with Tehran.

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Iran tops Germany's list of countries with the largest outstanding export guarantees, totaling €5.5 billion. France's export guarantees to Iran amount to about €1 billion. Italy's come to €4.5 billion, accounting for 20% of Rome's overall guarantee portfolio. Little Austria had, at the end of 2005, €800 million of its exports to Iran covered by guarantees.

The Europeans aren't simply facilitating business between private companies. The vast majority of Iranian industry is state-controlled, while even private companies have been known to act as fronts for the country's nuclear program. EU taxpayers underwrite trade and investment that would otherwise be deterred by the risks of doing business with a rogue regime.

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It is enough to make me want to take back my support for missile defense for Europe. Why are we wasting this technology on people who clearly do not deserve it? Let them schedule more negotiations while the missiles are flying toward them, and then additional discussions to deal witht eh aftermath so they do not have to respond then too. Their commercial interest are clearly more important than their security interest at this point.