March 26, 2014 / 11:10 PM / in 5 years

Siemens chief says supports ties with Russian companies

NOVO-OGARYOVO, Russia/BERLIN (Reuters) - The chief executive of engineering conglomerate Siemens gave a rare sign of German support to Russian President Vladimir Putin at the height of an economic standoff with the West over Ukraine, saying his firm supported a “trusting relationship” with Russian companies.

During a trip to Moscow, in which he met Putin at his residence on Wednesday, Siemens CEO Joe Kaeser said his firm wanted to honor long-standing business contracts and did not pay too much attention to “short-term turbulences” in its business planning.

“We support a trusting relationship with Russian companies,” Kaeser told journalists in Russia in response to a question whether sanctions against Russian Railways boss Vladimir Yakunin could affect its projects with the state rail monopoly firm.

The United States has levied sanctions against several Russian individuals - including Yakunin - over Moscow’s annexation of Crimea. Russian Railways has said that decision against Yakunin was unjustified.

Siemens has a partnership with Russian Railways, the state railway monopoly, under which it provides high-speed trains for rail lines between St Petersburg, Moscow and Nizhny Novgorod, according to the Siemens website.

“We have mastered a range of challenges successfully” over time, Kaeser told German public TV channel ZDF later on Wednesday. “Therefore I believe it is good to stay in dialogue and to talk about the things that are in the way and to find solutions together.”

Kaeser said the German government knew about his trip in advance and had not pressured him. German Chancellor Angela Merkel, asked during a news conference in Berlin whether she was opposed to Kaeser’s meeting with Putin, said business contacts with Russia were still in place and she hoped sanctions would not have to move to the next level.

CEO of the Siemens AG Joe Kaeser waits before meeting Russian President Vladimir Putin at the Novo-Ogaryovo state residence outside Moscow, March 26, 2014. REUTERS/Alexander Zemlianichenko/Pool

But she stressed that while business with Russian companies was not yet part of the sanctions - and she hoped they would not become one - she also trusted German businesses would comply if economic sanctions were expanded to include company dealings with Russia.

“(The head of BDI industry lobby) told me today that a value system is highly important for business, too because business investment relies on reliability,” Merkel said. “There can only be reliability if contracts and international treaties are adhered to.

“But Russia must know that if certain further international treaties are broken, then we are ready for a tough reaction. That’s an important message.”

Reporting by Darya Korsunskaya,; Additional reporting by Andreas Rinke in Berlin; Writing by Megan Davies; Editing by Pravin Char, Sonya Hepinstall and Andrew Hay nL5N0MN5BZ

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