German CEOs want to meet Putin – despite the Ukraine crisis

This also applies to the participants. So far, only Metro boss Steffen Greubel has agreed, other members of the East Committee are requested. As members of the Executive Committee, they include Bayer CEO Werner Baumann, Bilfinger Supervisory Board Chairman Eckhard Cordes, tunnel contractor Martin Herrenknecht and East Westphalian large-scale butcher Clemens Tönnies.

The energy company Uniper said on request: “We are also invited as a member of the Eastern Committee of German Business.” The group believes that dialogue must be maintained even in difficult times. The company is not aware of any request from the government not to take part in such a meeting, as was the case recently in Italy.

The Wolfsburg-based VW Group can definitely imagine participating in the planned meeting. “Volkswagen AG has received an invitation from the Committee on Eastern European Economic Relations to take part in the economic dialogue with representatives of the Russian government,” said a Group spokesman in the evening. Provided that the geopolitical situation does not deteriorate further, “participation is planned,” the spokesman continued.

Not far from Moscow, Volkswagen operates its own car factory with around 4,000 employees. Various VW and Skoda models and engines are manufactured there. There is also a joint venture with the Russian manufacturer GAZ in Nizhny Novgorod, east of the capital, where several models of the VW Group are also produced.

Companies worried about their investments in Russia

So far, the agricultural machinery manufacturer Claas, the building materials manufacturer Knauf, the automotive supplier Schaeffler and the mechanical engineering company DMG Mori have all been represented in the traditionally annual Putin talks. The East Committee chairman Oliver Hermes himself represents the Dortmund pump manufacturer Wilo as CEO. Managers such as Matthias Warnig, who works for Gazprom at the pipeline operator Nord Stream and sits on a number of Russian supervisory boards, were often present as German representatives.

Last year, the video conference with Putin initially agreed by the Eastern Committee was canceled, officially because of the pandemic. And even now one does not know for sure whether the appointment will come about. The organization is in close contact with the Federal Foreign Office, the Handelsblatt learned. The Moscow Chamber of Commerce Abroad (AHK) should also take part in the virtual meeting.

Companies like Metro are concerned about their investments in the sixth largest economy in the world by purchasing power. According to the Deutsche Bundesbank, German companies have invested more than 24 billion euros in Russia and employ around 280,000 people there.

At the end of 2020, according to official information from the Russian tax authority, 3,971 companies and representative offices with German capital were registered in Russia. However, the number is clearly declining. In 2019 it was seven percent more, in 2011 Russia even had 6,300 German companies.

The reason for this is the economic sanctions imposed by the EU after the occupation of Crimea in 2014. Since then, goods such as technical equipment that can be used for military tasks have been on the banned list for export to Russia. The same applies to equipment for oil extraction.

In addition, financial sanctions mean that foreign investments with European credit institutions can only be realized with difficulty. Other sanctions being discussed in the event of attacks against Ukraine include decoupling Russia from the Swift international payment system. In return, Russia stopped importing food and agricultural products. Interstate trade fell from 80 to 60 billion euros in 2021.

Vaccine Sputnik is also an issue

Recently there had also been some German-Russian problems: The German farmer Stefan Dürr, who with his Ekosem Group is Russia’s largest milk producer, has to fight for his property with a state bank. Siemens Energy had problems with the oligarch and Tui major shareholder Alexej Mordashov during a joint turbine production in St. Petersburg. And more and more foreign companies are complaining that they only get orders from the state or from state-controlled corporations if they manufacture large parts of their products in Russia.

Foreign companies in Russia are also upset about the new requirement that their foreign managers and employees must report regularly for blood tests, X-rays and psychiatric examinations. This makes it significantly more difficult to find top managers for Russia, explained several foreign chambers of commerce in Russia.

There is great agreement between the Russian government and German business: Both reject the Western sanctions. In business climate surveys by the German Chamber of Commerce Abroad and the Eastern Committee, company representatives repeatedly call for their lifting. Russia is Germany’s fourteenth largest trading partner.

According to the Bloomberg news agency, Putin held a two-and-a-half-hour phone call with Italian business leaders on Wednesday to discuss investment prospects in Russia. The Italian government had asked executives not to attend because of political tensions, according to an Italian official, who asked not to be identified. At the meeting, Putin particularly urged leaders to ensure that Russians vaccinated with the controversial Sputnik V vaccine can enter the EU without problems.

Francesco Starace, CEO of the Italian energy company Enel, also took part in the talks with President Putin. Starace is a confidante of Volkswagen CEO Herbert Diess. Enel and Volkswagen are cooperating on infrastructure projects for electric cars.

More: Unclear course in Ukraine conflict – Federal government isolates Germany from its partners