Germany is angry after the US government intervenes in a multi-billion-dollar deal for Siemens AG to develop power stations in Iraq and forces Baghdad to opt for General Electric (GE) instead.
The American company signed a memorandum of understanding with the Iraqi government earlier this week, outlining their cooperation in the fields of oil and gas production and power generation.
A person, who has seen the paperwork, told The Financial Times that Washington plans to offer financing and insurance for US firms doing business in the Iraqi power sector.
GE's agreement with Iraq dashed Siemens’ hopes of winning a $15 billion contract to supply 11 gigawatts of power-generation equipment to Iraq.
Until the US intervention, Siemens was considered the front-runner after its Chief Executive Joe Kaeser traveled to Iraq in September and spoke with Prime Minister Haider al-Abadi about the contract.
US officials, however, warned Abadi that awarding the contract to Siemens might jeopardize relations between Baghdad and Washington.
A top adviser to the Iraqi premier then told Siemens to give up because it was causing problems for Iraq given the US pressure.
“The US government is holding a gun to our head,” the adviser was quoted as saying by another person familiar with the incident.
According to people familiar with the negotiations, the US highlighted the number of American troops killed in Iraq and claimed that Iran had spurred Baghdad to pursue the Siemens deal.
“This is part of very strong campaign of engagement in Iraqi government formation and a very targeted effort to support the Iraqi government and minimize Iranian influence,” Garrett Marquis, a US National Security Council spokesman, claimed.
The Federation of German Industries (BDI) complained on Sunday that the US pressure to quash the Siemens power deal with Iraq was unacceptable, blaming President Donald Trump’s “America First” policy for corroding business decisions.
“To implement the America First doctrine in this way in the global competition of multinational companies is not acceptable,” Joachim Lang, BDI managing director, told Welt am Sonntag newspaper.
He emphasized that governments and companies should make deals based on business interests.
The US, backed by the UK, invaded Iraq in 2003 under the pretext that the former regime of Saddam Hussein possessed weapons of mass destruction.
No such weapons were ever found, but the invasion plunged Iraq into chaos and led to the rise of terrorist groups which continue to plague the country to this day.
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