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Economic implications for Europe of a potential regime transition and reintegration of Iran into the world economy
Client/Funding Institution
WIFO
Abstract
The report assessed the economic impact of a regime transition in Iran towards a democratic system with a free, rules-based economic order and its reintegration into the global economy. It found that lifting sanctions and restoring production could have boosted Iran’s GDP, while generating modest but meaningful gains for Germany and the EU. Beyond these economic effects, the report highlighted strategic benefits such as lower energy prices, improved energy security, and reduced regional risks, emphasising the importance of coordinated political action and multilateral engagement.
Duration
January 2026 - January 2026
wiiw team Leader
wiiw Staff
Mahdi Ghodsi, Magdalena Höllhuber, Robert Stehrer
Keywords: Iran, Regime transition, Sanctions, Economic integration, Energy security, Democratic transition, GDP effects, European Union, EU, Regime change, trade and investment, Macroeconomic effects, Energy markets
Countries covered: Iran
Research Areas: Regional Development, Sectoral studies