India will stop paying for its Iranian oil imports via Germany, a German official said on Tuesday, after reports of pressure from the United States and Israel.
The decision was a result of consultations between Berlin and New Delhi, and not pressure from Chancellor Angela Merkel at home or abroad to disrupt the payment scheme, the high-ranking government official said, declining to be named.
"India has told us that this route is being phased out," he said, confirming newspaper reports indicating that billions of euros of payments to a Hamburg-based bank handling international trade with Iran had been halted.
Earlier, Handelsblatt business daily reported that Merkel had intervened by instructing Germany's central bank, the Bundesbank, to stop clearing payments from India headed to the bank, known as EIH, although it is not under EU sanctions. Israel, whose Prime Minister Benjamin Netanyahu meets Merkel this week, wants Germany to shut down EIH.
The United States had pressed Germany over the matter while Berlin officials admitted the bank had not broken any EU rules, which allow payments for Iranian oil and natural gas.
The move will cost for German companies, which according to Handelsblatt now face hundreds of millions of dollars in bills outstanding for products ordered from Iran, some of which the oil money would have likely covered.
India too may now face renewed difficulties in finding a way to get payments for some 9 billion euros ($12.77 billion) in annual oil purchases to Iran.
Agencies
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