(Adds details and background)
BERLIN, March 19 Germany on Wednesday made its
first public intervention in business dealings with Russia since
the escalation of the crisis over Ukraine, telling defence
contractor Rheinmetall it could not send combat
simulation gear to Russia.
Germany has close economic ties with Russia, its main
supplier of gas. But Chancellor Angela Merkel has taken a
leading role in diplomatic efforts to stop President Vladimir
Putin from annexing the Ukrainian region of Crimea.
Germany and its Western allies have already imposed a first
level of sanctions on Russia, such as travel bans, asset freezes
and suspending visa talks. Merkel will discuss tougher sanctions
with European Union leaders at a summit beginning on Thursday.
After Rheinmetall said earlier on Wednesday it intended to
honour contractual obligations to deliver about 100 million
euros ($139 million) worth of technology to a Russian combat
training centre, Reuters asked the economy ministry for comment.
"The German government considers the export of the combat
simulation centre to Russia unacceptable in the current
circumstances," the ministry replied in a statement.
The company described the order, initiated about two years
ago, as near completion, and said it had no further orders
outstanding from Russia or Ukraine.
The economy ministry said it was in contact with the company
and added: "At the moment no such export is foreseen."
On Monday, after news that German utility RWE was
going to sell its oil and gas production arm DEA to a
group of investors led by Russian billionaire Mikhail Fridman,
the economy ministry said it saw no immediate threat to German
energy supplies - but left the door open to future intervention.
Under German law, the government can veto sales to foreign
companies if they pose any risk for German security.
Senior figures from Chancellor Angela Merkel's conservative
party urged the government to scrutinise the 5.1 billion-euro
($7.1 billion) energy deal, warning that Germany already relies
too much on Russia for energy.
($1 = 0.7188 Euros)
(Reporting by Gernot Heller; Writing by Stephen Brown; Editing
by Noah Barkin and Andrew Roche)