02925nam a22004457u 4500 pwiiw7526 OSt 20260517120133.0 260220t2026 au ||||| |||| 00| ||eng d OSt eng F13 F15 F51 Q41 Q48 O53 jelc Felbermayr, Gabriel Economic implications for Europe of a potential reintegration of Iran into the world economy Wien : Wiener Institut für Internationale Wirtschaftsvergleiche (wiiw), 2026. 72 S., 7 Tables and 20 Figures, 30cm. wiiw Research Reports 481 How would fundamental political change in Iran, leading to a democratic system with a free and rules-based economic order, affect Germany and the EU economically? In the event of change, sanctions could be scaled back, allowing Iran to rejoin the global economy. This study quantifies the economic effects of such a transformation. It neither advocates for nor legitimises the lifting or easing of sanctions under the current regime or without far-reaching and credible reforms that fully address the concerns underlying the sanctions currently in place. Using the newest available data and quantitative methods, the results indicate that lifting EU sanctions alone could raise Iran’s real GDP by more than 80% in the long run while generating moderate but economically meaningful gains for Germany and the EU of around 0.3-0.4% of GDP. These gains are driven by expanded trade, lower energy and input prices, and improved allocative efficiency. When sanctions removal is combined with plausible scenarios of productivity catch-up with Turkey or South Korea, Iran’s GDP would increase by 240-388% and the gains for Europe would increase further, underscoring the strong complementarity between trade integration and productivity growth. Moreover, Iran’s reintegration would reduce energy price volatility, improve the security of maritime trade routes, and lower migration pressures. Overall, the findings suggest that a negotiated transition and rules-based reintegration of Iran would generate substantial mutual economic benefits while contributing to regional and global stability. Iran economic sanctions regime transition trade integration energy markets oil and gas prices foreign direct investment European Union inflation political economy European Union Germany Iran International Trade, Competitiveness and FDI Ghodsi, Mahdi Stehrer, Robert 5 Yotov, Yoto V. Kariem, Heider 481 WIIW0000048 wiiw Research Reports https://wiiw.ac.at/p-7526.html P 9157 9157 0 0 0 0 BIB BIB 1 2026-02-20 pwiiw7526 0 5.600/481 1000010007526 2026-02-20 00:00:00 2026-02-20 P