Iraq News - Local News - Baghdadpost

Germany infuriated as U.S. firm "Hijacks" multi-billion dollar deal with Iraq

REUTERS / Tobias Schwarz/File Photo

German-based giant Siemens had spent considerable time courting the Iraqi government in order to land the $15-billion-worth contract for building power infrastructure in the war-torn country.

A Sputnik News report said it had been considered an odds-on favorite until Washington reportedly intervened and compelled Baghdad to choose U.S.-based General Electric.

Head of the Federation of German Industries (BDI) Joachim Lang has lashed out at the US for its interference in business competition for projects in Iraq, using leverage to promote the interests of American big business.

According to him, sovereign states and companies must have the freedom to negotiate the best economic solutions, in line with the principle of fair competition. The Federation demanded a “level playing field” for competitors worldwide.

However, Lang admitted that nobody had the ability to forbid any country from politically flanking its business projects. At the same time, he pointed out that no single company can be granted preferences in a situation where rules which are considered valid for other businesses are not applied to one particular actor.

On October 15, Iraq signed a memorandum of understanding with Boston-based General Electric for building power infrastructure in the war-torn country, although Siemens had been considered the front- runner. In late September, the CEO of the German conglomerate, Joe Kaeser, traveled to Baghdad accompanied by State Secretary at Germany’s Ministry for Economic Affairs and Energy Thomas Bareiss to meet Prime Minister Haider Al-Abadi. Kaeser and the head of the Iraqi government discussed a 4-year plan to install power plants with a generating capacity of 11 GW. The German outlet Handelsblatt reported the deal to be worth $15 billion.

However, as the Financial Times reports, Donald Trump’s administration bullied Baghdad to choose General Electric over Siemens, claiming that the deal with the German firm could put the US-Iraqi relations at risk. The outlet cited a source familiar with the situation, who revealed that an adviser to Al-Abadi said “The U.S. government is holding a gun to our head,” and told Siemens to give up on the contract two weeks ago.

Senior U.S. officials are said to have warned Prime Minister Haider Al-Abadi against leaning towards the German giant, Bloomberg reported. The website claimed that the White House suspected that Iran is pushing Iraq towards a deal with Siemens “as a way of undercutting ties with the US,” in light of the Trump Administration's plans to invoke a new package of sanctions in November.