PARIS–Iranian President Hassan Rouhani heralded the start of a new relationship with France on Thursday, as the Islamic Republic leader’s first visit to Europe after the end of international sanctions prompted a wave of commercial agreements between the two countries.
« Let’s forget the rancor, » Mr. Rouhani told a forum of business leaders in the French capital flanked by French Prime Minister Manuel Valls. « We are ready to turn the page to a new relationship. »
The two governments unveiled cooperation agreements between the French and Iranian rail companies, on renewable energy, among other deals. The nation of nearly 80 million, represents a rare opportunity: a large country that is in desperate need of investment after years of international isolation.
Mr. Rouhani suggested French companies would benefit from being free of the troubled history that has plagued Iran’s relationship with other Western nations.
Iranians « associate certain countries with trouble, but that is not the case for France, » he said.
Iran is at a nexus of France’s diplomatic ambitions in the Middle East and the commercial hopes of French companies abroad. French leaders are hoping Iran will push Syrian leader Bashar al-Assad, who is backed by Tehran, to negotiate an end to Syria’s civil war.
Construction-to-media conglomerate Bouyges SA and construction firm Vinci SA are among the French companies on the verge of signing contracts with Iran. Oil giant Total SA is pushing to get back in the Iran.
Before Total left Iran because of sanctions, the country was one of its biggest markets in the Middle East in the previous decade.
The auto industry is also moving swiftly. French car maker PSA Peugeot Citroën signed a deal with Iranian manufacturer Iran Khodro to start a joint venture that will produce cars in Iran, marking a return to the country after a four-year absence.
The two partners are expected to invest up to EUR400 million ($435 million) over five years, and produce up to 200,000 cars a year out of a factory in suburban Tehran.
Mr. Rouhani, analysts say, is under pressure at home to show the nuclear accord is paving the way for Iran to stage an economic recovery. Iran’s young population is racked with high unemployment creating a powder keg for its ruling class, which is scrambling to show results.
« The Rouhani administration needs to announce large contracts and investment by international corporation in Iran so as to tell the Iranian people that something concrete is happening, » said Ardavan Amir-Aslani, an Iran-born corporate lawyer who has written extensively on Iranian foreign policy.
Cutting deals with France–one of the six powers that negotiated the nuclear accord and a permanent member of the United Nations Security Council–is also a way for Tehran to tighten relations with a European heavyweight that has drifted closer to Saudi Arabia and other predominantly Sunni Arab countries.
In recent years, France has landed billions in contracts to supply Egypt and Qatar with Rafale jet fighters. It has also partnered with Saudi Arabia to reinforce Lebanon’s military.
Mr. Rouhani is finishing up a four-day visit to Italy and France. Italian and Iranian companies signed deals valued at about EUR17 billion ($18.36 billion) late Monday on the first day of his visit to Rome.
The article is available on the website 4 traders.