* VDMA president warns against hasty action
* Says Russia is engineering sector's fourth-biggest market
* February orders fell 4 pct after January rise
(Adds 2014 output outlook, order figures, background)
HANOVER, Germany, April 7 The German engineering
sector could be derailed if the European Union imposed strict
sanctions against Russia following the latter's annexation of
the Crimea region of Ukraine, trade body VDMA said on Monday.
The EU, United States and other Western nations have imposed
sanctions in response to Russia's seizure of Crimea and have
threatened broader economic penalties if it moves into southern
and eastern Ukraine, which some German executives have warned
would hurt their businesses.
"It is absolutely clear that there has been a blatant breach
of international law... It is also clear that it is necessary to
draw the line," VDMA President Reinhold Festge said at the
Hannover Messe trade fair.
"But you have to know what you are doing when you continue
to escalate, yelling and screaming," he said.
Russia is Germany's 11th biggest commercial partner, with
trade reaching 76.5 billion euros ($105 billion) last year,
according to the trade association Ost Ausschuss.
Joe Kaeser, head of German conglomerate Siemens,
met Russian President Vladimir Putin in Moscow last month to
secure his firm's interests, drawing criticism from some German
"This concerns the engineering sector's fourth-biggest
market, and there is no other country that has invested in
Russia as massively as Germany," Festge said.
The VDMA represents more than 3,000 mainly small and
medium-sized companies but also large companies such as Siemens,
MAN SE and ThyssenKrupp. The sector is
Germany's largest industrial employer, with 993,000 workers.
The VDMA expects engineering output to grow by 3 percent
this year, recovering from a 1.5 percent decline in 2013.
Output rose by 5.6 percent in January, VDMA has said, but
capacity utilisation was relatively low at 84.4 percent. Orders
- an indicator for future output and sales - rose 6 percent in
January but then slipped 4 percent in February.
($1 = 0.7303 euros)
(Reporting by Tom Kaeckenhoff; Writing by Maria Sheahan;
Editing by Erica Billingham)