BERLIN, July 17 Germany's main trade body said
on Thursday it is worried that Germany's economic relations with
Russia will deteriorate further after the European Union
ratcheted up sanctions on Moscow for its involvement in the
crisis in Ukraine.
EU leaders agreed on Wednesday to sanction Russian
companies deemed to have contributed to destabilising Ukraine
and to block new loans to Russia through two multilateral
Jens Nagel of Germany's BGA trade association said it was
unavoidable for Brussels and Washington to toughen sanctions
despite the impact on business, but said he was worried the
process would keep "spiralling" upwards.
"I wouldn't put it past President Vladimir Putin to impose
retaliatory measures to save face, as was the case after the
first level of sanctions," Nagel told Reuters.
German exports to Russia dropped by 14 percent to about 10
billion euros in the first four months of the year, according to
the latest data from the Statistics Office.
Some 6,200 German firms are active in Russia with 20 billion
euros ($27 billion) of investments there, while some 300,000
German jobs are dependent on trade with Russia, according to
estimates by Germany's Committee on Eastern European Economic
Two months ago, German industry was campaigning to dissuade
Chancellor Angela Merkel from imposing tougher sanctions on
Russia over Ukraine, warning of lasting damage to domestic firms
and the broader economy. But industry leaders now speak of the
"primacy of politics" over business interests.
The new sanctions are a significant increase in EU pressure
on Russia but they fall short of the harder-hitting measures
announced by the United States, which targeted key institutions
including Gazprom, Rosneft Oil and other energy and defence
($1 = 0.7393 Euros)
(Reporting by Annika Breidthardt, Rene Wagner and Gernot
Heller; Writing by Annika Breidthardt; Editing by Stephen Brown
and Raissa Kasolowsky)