European Union ministers may be ready to push for tougher sanctions against Iran after Germany has shown growing willingness to take a harder line.

Talking in the margins of the G8 gathering yesterday in Italy, EU foreign ministers were loath to press ahead with plans for tightening curbs while the outcome of the Tehran turmoil is so unclear. The EU and US do not want to help anti-Western voices in Iran.

But even before the election, when it looked as if Mahmoud Ahmadinejad might regain the presidency without controversy, EU ministers were considering tighter curbs on exports and on Iran’s banks. If they revive those plans, in which Germany is now taking a prominent role, then it will come as a relief to the US, which has criticised the EU’s comparative softness. It will also answer years of frustration from Britain that Germany has been the main obstacle to a tougher EU position.

Angela Merkel, the Chancellor, in Washington today for talks with President Obama, will inevitably focus on Iran, as well as climate change and the financial crisis. Germany — and Merkel — were the target of particularly harsh remarks from Iranian officials at stormy official meetings in Tehran on Sunday and Tuesday with EU counterparts. Merkel has led a shift in the German relationship with Iran, which while ambivalent, certainly, has overall been warmer than that of Britain or France.

Germany, the export engine of Europe, is Iran’s largest trading partner in the EU, with sales in the past of between €4 billion and €5 billion a year, more than double those of Italy, France, Switzerland and the UK. It has at some points been Iran’s largest trading partner overall, although now overtaken by China.

At least 1,700 German companies are active there, providing businesses with technology. US officials protested that German exports to Iran kept growing after the 2002 exposure of Iran’s covert nuclear work, and UN sanctions since 2006. Moves by Merkel to discourage trade are showing effect, Berlin and Brussels officials say. The value of German exports to Iran fell by 28.5 per cent in value in the year to January 2009, and by 59.3 per cent in volume.

For years, there has been a tussle over Germany’s Iran policy between the Right and Left, and between politicians and the commercial ministries (which have long had more weight in German policy than in Britain, British officials note, adding drily that this perhaps should refer to the era before the rise of Peter Mandelson).

There is also something of a more legalistic approach to sanctions, with an extra insistence that they be carefully defined. Nor have Merkel’s Social Democrat coalition partners been much in favour of hard sanctions — and Germany faces elections in two months.

On the other hand Merkel, when she stood in front of the Knesset and said that Israel had no greater friend in Europe than Germany, was thought to speak for many.

As concern about Iran’s nuclear work has risen, Britain and France have tried to get support for tougher sanctions within the “E3” — the UK-French-German trio — the first step to getting EU support. A new drive might now be possible.

But even though Iran is still advancing its nuclear work, a desire to give Iranian reformers the best chance means that, just for now, Britain and France will not test Germany on whether it really will take a tougher line.

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