BERLIN May 9 German growth could be reduced by
up to 0.9 percentage points this year and 0.3 points in 2015 if
the EU imposes tougher economic sanctions on Russia for its
actions in Ukraine, a German magazine reported
It cited the German section of a European Commission study
in which confidential scenarios for all 28 European Union member
states were prepared as the bloc debates how to retaliate if
pro-Russian separatists prevent Ukraine from holding free
presidential elections as scheduled on May 25.
The Commission's current forecast is for German gross
domestic product (GDP) to expand by 1.6 percent in 2014 and 2.0
percent in 2015. The report cited by Stern magazine said
sanctions would drag these rates lower mainly by pushing up
Europe's reliance on Russian natural gas supplies has forced
leaders like Chancellor Angela Merkel to temper their threats of
tough action against Russia with cautious talk of the need to
engage President Vladimir Putin in dialogue about Ukraine.
Light sanctions, such as blocking imports of Russian luxury
goods like furs or expanding the list of political and business
figures subject to travel bans, would slow German growth by 0.1
percentage points this year and next year, the Stern report
But the worst-case scenario for the German economy would be
prompted by a ban on imports of Russian oil and gas and Russian
intermediate goods and a freeze on Russian financial assets and
capital movements, according to the report.
This would have a big impact on Germany's energy supplies,
it said, estimating that Germany gets 46 percent of its gas and
37 percent of its oil from Russia and is even more dependent on
it for supplies of certain raw materials like copper.
(Reporting by Stephen Brown Editing by Jeremy Gaunt)