With Sanctions Lifted, Iran's President Heads Straight To Europe

With financial sanctions against Iran falling away, President Hassan Rouhani is wasting no time in seeking new business opportunities for a country that's long been isolated.

The Iranian leader was in Italy on Monday, a stopover that may also include a meeting with Pope Francis, according to media reports. Rouhani also planned to visit France as part of the first European tour by an Iranian president since 1999.

Iran appears poised to announce the purchase of more than 100 European-made Airbus planes in what would be the country's first major commercial deal since punitive measures were lifted this month. And Rouhani hosted China's President Xi Jinping on Saturday in Tehran, where they announced plans to expand economic ties.

"We should take advantage of the post-sanctions climate to develop the country and create jobs," Rouhani said, according to Iran's Fars news agency. The president's entourage includes more than 120 businessmen and government officials.

Iran's economy has been constrained for decades due to international sanctions, and the toughest measures were imposed in recent years in response to the country's nuclear program. But the nuclear sanctions were lifted on Jan. 16 after Iran met its obligations under the deal it reached last summer with six world powers.

That has freed up tens of billions of dollars that were frozen in international banks by the sanctions. Most of the money is owed to Iran for oil sales to Asian countries in recent years. Various estimates have put the amount now available to Iran at $50 billion to $100 billion, or even higher.

Iranian President Hassan Rouhani greets visiting Chinese President Xi Jinping at the Saadabad Palace in Tehran on Saturday. With sanctions lifted, the countries pledged to develop economic ties.

Ebrahim Noroozi/AP

A top Iranian priority is new civilian planes to replace the country's aging fleet, among the oldest in the world. Iran bought its aircraft from Boeing when the U.S. and Iran had close ties before the 1979 Islamic revolution. But since then, Iran has struggled to obtain spare parts and buy new planes.

The country now looks likely to turn to Airbus.

"We have been negotiating for 10 months" for the Airbus planes but "there was no way to pay for them because of banking sanctions," Iran's Transportation Minister Abbas Akhoundi was quoted as saying by the Iranian media.

Airbus has not commented on the reports.

Europe was Iran's largest trading partner before the sanctions began to bite, and European countries have been eager to redevelop those ties, with many sending delegations to investigate business opportunities.

Iran, for example, was a large market for French Peugeot cars before sanctions.

The U.S. still maintains many sanctions on Iran linked to human rights and terrorism. As a result, U.S. businesses still face a host of restrictions and American companies are not expected to enter the Iranian market in a major way.

Most of the initial Western business dealings with Iran are expected to involve the sale of products, rather than long-term investments that require establishing operations inside Iran.