BERLIN, April 5 (Reuters) - German Chancellor Angela Merkel has intervened to stop billions of euros of Indian oil payments from reaching Iranian accounts via Germany, a newspaper reported on Tuesday.
Citing government sources, Handelsblatt business daily said Germany will no longer authorise its central bank, the Bundesbank, to clear the payments headed to Hamburg-based EIH -- a bank under U.S. but not EU sanctions.
Israel, whose Prime Minister Benjamin Netanyahu meets Merkel this week, wants Germany to shut down the German bank, saying it supports the spread of weapons of mass destruction by handling payments to participants in Iran's contentious nuclear program.
EIH came under renewed scrutiny last week when it emerged Berlin had allowed India to pay for billions of euros of oil purchases from Iran via the bank, after India restricted its own direct payments to Iran to placate Washington.
The United States had pressed Germany over the matter, although Berlin officials had said their hands were tied because the bank had not broken any EU rules, which allow payments for Iranian oil and natural gas.
The apparent reversal has not come without a 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.
The move will increase pressure on Tehran, already under a series of U.N. sanctions for refusing to freeze its uranium enrichment program, which Western powers suspect is aimed at producing a nuclear weapon.
Iran denies the allegations, trumpeted loudest by the United States and Israel, that it is enriching uranium to produce atomic arms, and maintains that its programme is for peaceful energy needs. (Writing by Brian Rohan; Editing by Elizabeth Fullerton, sourced Reuters)
Citing government sources, Handelsblatt business daily said Germany will no longer authorise its central bank, the Bundesbank, to clear the payments headed to Hamburg-based EIH -- a bank under U.S. but not EU sanctions.
Israel, whose Prime Minister Benjamin Netanyahu meets Merkel this week, wants Germany to shut down the German bank, saying it supports the spread of weapons of mass destruction by handling payments to participants in Iran's contentious nuclear program.
EIH came under renewed scrutiny last week when it emerged Berlin had allowed India to pay for billions of euros of oil purchases from Iran via the bank, after India restricted its own direct payments to Iran to placate Washington.
The United States had pressed Germany over the matter, although Berlin officials had said their hands were tied because the bank had not broken any EU rules, which allow payments for Iranian oil and natural gas.
The apparent reversal has not come without a 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.
The move will increase pressure on Tehran, already under a series of U.N. sanctions for refusing to freeze its uranium enrichment program, which Western powers suspect is aimed at producing a nuclear weapon.
Iran denies the allegations, trumpeted loudest by the United States and Israel, that it is enriching uranium to produce atomic arms, and maintains that its programme is for peaceful energy needs. (Writing by Brian Rohan; Editing by Elizabeth Fullerton, sourced Reuters)
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