“We need an exit from the sanctions”

A criticism of the extension of the EU sanctions against Russia

by Eckhard Cordes*

Following the loss of 6.5 billion euro in 2014, German exports to Russia in 2015 will be reduced by another 8.5 billion Euro. Even in the trade with Ukraine and other countries of the region we continue to observe massive losses.
Even if the mutual sanctions are only one of the causes of this dramatic development, it is obvious that, for the benefit of all, we urgently need an exit from these sanctions.
After we have seen the Russian government sending signals of de-escalation, we would have asked the EU heads of government to muster more courage in approaching Russia. The style in which the EU sanctions have now been prolonged for six months without any substantial debate is disappointing. Once again we missed a chance to move one step towards Russia and to start a new and positive dynamics in the mutual relationships. […]
The relationship between Russia and the EU could be improved which would also be in the interest of the economic development of Ukraine. It will take a long time of increased trade with the EU to be able to compensate Ukraine’s losses in the trade with Russia. As of September 2015, export to Germany has only increased by a meagre 50 million Euro (+3%). In 2015 as well, the total of Ukraine’s exports to the EU will drop, in spite of unilateral trade benefits.
Currently there are concerns that the full implementation of the EU association agreement with Ukraine will deepen the trade conflicts with Russia. The trilateral negotiations between Ukraine, Russia and the EU in Brussels which are supposed to develop technical solutions for the Russian points of criticism, are on the verge of failure.
Hence we welcome Foreign Minister Steinmeier’s initiative trying to introduce offers for a deeper economic cooperation with Russia and the Eurasian Economic Union in the context of trilateral negotiations. The Federal Government needs to do everything to gain the missing support of its EU partners and the EU Commission with regard to this question.
Another escalation of the Ukraine conflict after the implementation of the association agreement on 1 November must be prevented in order to avoid investors’ further discomfiture in the region. To get on its feet economically, Ukraine needs access both to the EU and the Russian market.    •

*    Dr Eckhard Cordes had been chairman of the “Ost-Ausschuss” (German Committee on Eastern European Economic Relations) which was founded in 1952 as the first German business regional initiative. The “Ost-Ausschuss” represents the German economy in bilateral committees and carries out a variety of information events, trips for entrepreneurs and conferences in more than 21 countries each year. The Committee based in Berlin recognizes itself as competence centre of the German economy and for the eastern European and central Asian future markets. The “Ost-Ausschuss” is supported by five big trade associations and 220 member companies.

Source: www.ost-ausschuss.de/node/1035  from 17 Dec. 2015

(Translation Current Concerns)