When the US announced its latest sanctions against Russian companies and business leaders the response in Germany was surprisingly muted.
There was isolated criticism from trade lobbies, along with warnings that German companies could end up losing billions of euros in revenues as a result of the US measures. But the complaints resonated little among political leaders in Berlin, where sympathy for Moscow has rarely been in shorter supply and where the weight of German-Russian business interests is notably on the wane.
German leaders, most notably Heiko Maas, the foreign minister, have been increasingly critical of Russia in recent weeks. Angela Merkel, the chancellor, raised eyebrows last week when she cast doubt about the Nord Stream 2 gas pipeline linking Russia and Germany — a project that until recently had full-hearted political backing from Berlin.
“Relations between Germany and Russia are at the lowest level since the end of the cold war, if not for longer,” said Stefan Meister, a Russia analyst at the German Council on Foreign Relations in Berlin. “The issue of Russia is looked at more and more from a political and security perspective. The dominance that business used to have over Russia policy is in decline.”
Russia remains a critical market for German companies and a key supplier of natural gas to Europe’s largest economy. But the recent weakness of the Russian economy and the impact of earlier rounds of sanctions against Moscow have gone some way towards eroding the significance of Russia as a business partner.
German companies exported goods worth €25.8bn to Russia last year, more than in 2016 but still a long way off the pre-sanctions peak. In 2012, for example, German shipments to Russia were worth more than €38bn.
Russia is now Germany’s 14th largest trading partner, down from 11th in 2012. Poland, for instance, bought twice as many German goods as Russia last year. Even the Czech Republic is a bigger German export market than Russia.
Julian Hinz, an economist at the Kiel Institute for World Economy, said the impact of past sanctions on Russia-Germany trade has already been considerable, accounting for as much as a third of the recent decline in German exports. “The main damage comes not so much from the direct impact of the sanctions, but from the fact that companies now find it much harder to finance their trade with Russia. German banks have already largely retreated from Russia,” he said.
How much additional damage the new US sanctions will do to German companies is difficult to assess. The German-Russian chamber of commerce warned last week that the latest measures could cause “hundreds of millions of euros” of damage in the short term and “billions” in the long term.
It pointed out that some of the Russian companies and business leaders identified on the US sanctions list, such as GAZ, the carmaker, and Rusal, the aluminium group, had close business links with German groups. Volkswagen, for example, co-operates with GAZ in Russia.
Matthias Schepp, head of the chamber of commerce, warned that the only beneficiaries of the new sanctions would be businesses in Asia. “If German and American companies find it harder and harder to do business in Russia it will be Asian groups, and in particular groups from China, that will fill the gap bit by bit,” he said.
Not all German investors in Russia seem to share that concern, however. Claas, a German maker of agricultural machinery that opened a production plant in Krasnodar, southern Russia, in 2015, said it was still too early to say whether the new sanctions would impact its business.
“For the time being the demand for [our] efficient harvest technologies remains high,” said Hermann Lohbeck, a spokesman. “We are watching the current tensions very closely and hope for a political clarification.”
Yet there is little sign that the political tension between Russia and the west is about to ease. There is no obvious pro-Russian voice in the German cabinet, and the foreign ministry in particular is showing a marked a change in tone.
Sigmar Gabriel, who stepped down as Germany’s chief diplomat last month, had called repeatedly for a rethink on Russia sanctions. Mr Maas, in contrast, told Der Spiegel, the German magazine, that a relaxation of western sanctions against Russia was not on the cards. Moscow, he said, was acting “in an increasingly hostile manner”.
Recommended
Ms Merkel warned Russia last week not to cut out Ukraine as a transit country for natural gas. That threat arises from the construction of the Nord Stream 2 gas pipeline through the Baltic Sea from Russia to Germany, bypassing the route through Ukraine. The chancellor stopped short of withdrawing support for the project but her remark, and her acknowledgment that Nord Stream 2 was more than a simple business project, were emblematic of the new tone in Berlin.
“We have not yet seen a real departure from the previous German approach on Nord Stream 2,” said Kai-Olaf Lang, an expert on eastern Europe at the German Institute for International and Security Affairs. “What we do see in Germany is that the doubts are growing, and that there is a geopolitical sensitivity around this issue that did not exist before.”
Read again German business takes Russia sanctions in its stride : https://ift.tt/2qyMmY6Bagikan Berita Ini
0 Response to "German business takes Russia sanctions in its stride"
Post a Comment