Is Germany against anti-Russian sanctions?

Is Germany against anti-Russian sanctions?

The German website finanzen.net published an article about the EU sanctions towards Russia in regard to the Ukraine conflict and how there is currently a debate in Germany about relaxing  relations with Russia. The current situation has a negative impact on Berlin's trade with Moscow.

Five years after the first sanctions were imposed several German politicians, above all those from former DDR, called for a relaxation and rapprochement with Russia. This is due to Germany carrying the heaviest brunt of sanctions and that fact that Russia has not changed its behaviour.

According to Julian Hinz from the Kiel Institute for the World Economy (IfW), the gradually tightened sanctions of the US and the EU against Russia after 2014 had a significant impact on world trade. Russia loses around 3.4 billion US dollars in trade per month, while Germany losses around 770 million euros in trade per month. In comparison, the US trade losses are only about $ 70 million a month due to the sanctions.

When the EU sanctions 2014 were imposed, the federal government had to fight against corporate opposition. Chancellor Angela Merkel categorically emphasized the primacy of politics and warned companies not to violate the sanctions. But many of the companies organized by the Ostausschuss-Osteuropaverein (OA) are still not convinced of the strategy’s success. OA Managing Director Michael Harms argues that the sanctions changed the economic landscape. On the one hand, EU and US policies have significantly accelerated the trend towards protectionism in Russia. On the other hand, there is a clear reorientation of the Russian economy towards China. Chinese companies are now supplying the goods, which are no longer exported from Germany. The US sanctions especially created such great uncertainty that German companies withdrew due to fears of penalties from legal transactions - and European banks paradoxically lost the business to US competitors. This was because Russian business partners suspected that they could have a closer connection to the US government and could turn sanctions. There is also the issue of very long waiting times for export licenses in Germany, which meant that Russian partners increasingly transferred their contracts to Asia.

Also, in the Bundestag, political parties are divided on how to cope with the situation. Together with the Eastern Committee, the Chairman of the Economic Committee, Klaus Ernst (The Left), is leading the critics. His main argument is that the federal government must admit that EU sanctions did not lead to any change in Russia’s behaviour.

Members of several parliamentary groups are now calling for a gradual easing of EU sanctions - especially as there are first signs of détente in Russia's relationship with Ukraine. “Macron and Merkel would have to put the issue on the EU agenda,” demanded the economic policy spokesman of the SPD, Bernd Westphal. “We take the first step and [wait to] see what Russia does,” he suggested. His CSU colleague Peter Ramsauer shares the same views

While the Greens and the CDU clearly want to stay with the current course, FDP economic politician Sandra Weeser advocates a gradual easing of the sanctions. However, she emphasized that Russia must demonstrate progress in implementing the Minsk Peace Agreement for Eastern Ukraine in order for this to happen. 

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