German business support for Russia sanctions remains strong

German business support for Russia sanctions remains strong
EU headquarters Brussels
By bne IntelliNews June 27, 2016

Losing out on market share and fat margins, German business has been lobbying for the removal sanctions. But a poll indicates a change of mind and firm support for the current regime.

The Association of German Business, a lobbying group, says it thinks the current sanction regimes is appropriate and backs German Chancellor Angela Merkel, who has been steadfast in her efforts to maintain sanctions on Russia until there is some progress on implementing the Minsk II peace agreement for Ukraine signed last year. Earlier in June, the 28 EU ambassadors agreed to extend sanctions to the end of the year, although the decision needs to be ratified by the foreign ministers of the countries.

A poll of the association’s members found that 52.1% thought the current level of sanctions was "just right", and agreed that "Russia needs to know that it must stick to its agreements with the international community in full", reports German newspaper Die Welt. Just over a quarter (27.4%) believe the sanctions are "questionable" and 16% thought they were "completely wrong".

Little progress has been made on implementing the sanctions, with both sides refusing to move forward. Russia is maintaining its proxy forces in the disputed Donbas region of eastern Ukraine and is also reported to have several thousand regular Russian army troops in the region coordinating the resistance. For its part, Kyiv failed to hit any of the deadlines laid out in the Minsk protocals for introducing an amnesty for fighters, holding regional elections in the east or changing the constitution to create more regional independence, which was supposed to happen before the end of 2015.

Some parts of German business have been lobbying hard for an end to the impasse and a return to normalcy. Industry representatives have taken out full page ads in the German language press to call for an end to sanctions and public opinion in Germany is generally more forgiving than in other European countries; Germans blame American imperialism as much as Russian agression for causing the showdown.

Russian-German trade fell from €36bn in 2013 to €22bn in 2015 and inbound investment by parent companies to their Russian daughter companies has virtually ceased, according to bne IntelliNews sources. Russia represents an increasingly important export market for German, which sent €70bn worth of goods overseas last year, reports Die Welt

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