The Russian economy is growing again – but the country is now facing new sanctions.
(Photo: dpa)
Berlin The new German Foreign Minister, Annalena Baerbock, leaves no doubt about the Western determination to take tough sanctions against Moscow in the event of a renewed Russian attack on Ukraine. “Russia would pay a high political and, above all, economic price for a renewed violation of Ukrainian statehood,” said the Green politician on Thursday after a meeting with her French counterpart Jean-Yves Le Drian.
In the opinion of Oliver Hermes, Chairman of the Eastern Committee of the German Economy (OA), punitive measures would also have “dramatic effects” on the German economy. In the event of new sanctions, she feared an “escalation spiral” and was afraid of the “growing danger of new, harsh sanctions and then counter-sanctions that could be expected”. Above all, Hermes expects severe consequences if Russia were to be excluded from the Swift international payment system.
In Moscow on Thursday, Hermes presented the Russia business climate survey of the OA and the German-Russian Chamber of Commerce Abroad (AHK). The fear of new sanctions hit the German economy at a time when “bilateral economic relations are just noticeably reviving”. Optimism had recently returned.
35 percent of the surveyed German companies active in Russia business rate the situation as good, 13 percent as very good. That is eleven percentage points more than in 2020 and two points more than in the pre-Corona year 2019. 60 percent of companies expect a positive or at least slightly positive economic development in 2022, after only 36 percent were optimistic a year ago.
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The biggest obstacles in business with Russia are the ruble exchange rate and mutual economic sanctions. Almost four out of ten companies (39.5 percent) state this. Problems could also increasingly be caused by a law according to which foreign workers in Russia will in future have to undergo intensive examinations once a quarter – including blood tests, X-rays and interviews by psychiatrists.
Should this also affect managers and foreign engineers, Moscow’s AHK boss Matthias Schepp expects that Western managers and engineers will turn their backs on Russia en masse and it will be difficult to recruit replacements. The law has “strong negative effects on the business climate in Russia,” says Schepp. No other law has caused so much trouble so far.
Putin has built up huge financial reserves
New sanctions would burden the Russian state finances and the business of companies in Russia. Russia expert Ben Aris knows, however, that the Kremlin has been preparing for stronger punitive measures for years and has even prepared a “financial fortress”. State mega-investments in the necessary infrastructure expansion have been postponed in favor of large financial reserves.
These allowed President Vladimir Putin to “confront US power with more or less impunity,” says Aris. “Despite the fact that Russia is weaker than the US in almost every way, with the exception of nuclear weapons.”
In fact, Russia’s gold and foreign exchange reserves have risen from $ 377.7 billion to $ 622.5 billion in five years. Added to this is the expansion of the state reserve fund “National Welfare Fund”, into which excess export income from oil and gas sales flow, to 185.2 billion dollars at the beginning of December.
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