National Interests
As the German Council on Foreign Relations' expert for Russia, one of the most prominent proponents for closer cooperation between Berlin and Moscow, Alexander Rahr predicted, the current change of government in Germany will bring "no alterations" [1] in the relationship between Germany and Russia. The "course of this strategic partnership" is consistent, "in its entirety, with national interests," declared Rahr. "Every German government, regardless of who may be a member, is simply obligated to take the national economic interests into consideration." That includes "also Germany's progress on the East European markets, particularly the Russian markets." In 2005, German Chancellor Angela Merkel "accepted every project, ex-Chancellor Gerhard Schroeder had developed together with Russia." Even a foreign minister from the FDP, a party that likes to criticize Russia, will be obliged to follow suit. Besides, "the foundation for this strategic partnership between Germany and Russia" was laid already in the 90s - during a CDU/CSU and FDP coalition government.
All Time High
The continual rise in the economic significance of the German - Russian cooperation can be clearly seen in the commerce and investment statistics. In 2008, the German - Russian foreign trade volume grew by a well above average 19.8% to more than 68 billion Euros, placing Russia, for the first time, ahead of Poland, as Germany's leading trading partner in Eastern Europe. German exports reached a volume of 32.3 billion Euros, just under the export volume to the much more populous China (34 billion Euros). According to Russian statistics, more than 6,000 German companies are registered in Russia, who had invested US $17.4 billion by the end of 2008. But the true volume of investments is significantly higher, due to the fact that a large portion of German investments are transacted over third countries, such as Austria or the Netherlands.
Motor of Growth
The long-term sustained growth of German-Russian as well as German East European trade stands in sharp contrast to the development of transatlantic business relations. The German-East European trade volume has more than doubled over the past five years and last year rose to 307 billion Euros - with a German foreign trade surplus of 25 billion Euros. This region accounts for 17 percent of German foreign trade, while German-US commodity exchange amounts to just 6.5 percent. Even the booming China accounts for merely five percent. The trade volume between Germany and the USA sank not only in relative terms but also in absolute numbers, from 126.5 billion Euros in 2006, to 117.5 billion in 2008. With the opening up of Eastern Europe, 20 years ago, an "unprecedented success story" began, assessed Klaus Mangold, Chairman of the Committee on Eastern European Economic Relations of the Federation of German Industry (BDI). This region is the German industry's "decisive driving force of growth".[2]
Solid Basis
According to the Committee on Eastern European Economic Relations, this holds true in spite of the global economic crisis' trade slump. Even if the German-Russian trade volume would suffer a 30 percent drop this year, the bilateral economic relations are on a "solid basis", explained Mangold. Many enterprises are seeking, particularly during the crisis "to use the opportunity, for enhancing their positions and offer their partnership in modernizing Russia."[3] As a matter of fact, since the beginning of the year, several companies have broadened their activities in Russia (VW, Henkel, Siemens) or made a relaunch (Lanxess).[4] Berlin and Moscow are providing standby credits of up to 500 million Euros through the KfW-IPEX and the Vneshekonombank (VEB) banks.[5]
New Point of Focus
A new point of focus for expansion is the Russian agriculture and food sector. Russia, which has more arable land than all EU nations together, has recently declared the modernization of its dilapidated agriculture a strategic development objective, earmarking nearly 20 billion Euros in subsidies for this purpose until 2012. Not only the numerous agro-technological companies (seed, agro-technology, plant protection), who have been active in Russia for years will benefit from these subsidies, also the German agro-engineering industry that delivered 750 million worth of goods to Russia last year - an increase of 20 percent. In all, German companies delivered 2.7 billion Euros worth of agricultural products in 2007 to Russia, which has contributed to the fact that Germany now ranks third on the world scale - behind the USA and the Netherlands - in the export of agricultural goods.[6]
Energy Agency
The energy sector is continuing its expansion.[7] Berlin is also attempting to obtain sales possibilities beyond the natural gas sector, where Eon recently improved its privileged position with its investment in one of the world's largest gas fields, the Jushno Russkoye. The newly founded Russian-German Energy Agency (RuDEA) is supposed to open the way for German enterprises to have access to a broad range of environmentally sound sources and uses of energy in Russia.[8] RuDEA is modeled after the semi-governmental Deutsche Energie-Agentur (German Energy Agency - Dena), which holds 40 percent of the RuDEA shares.
Nuclear Alliance
Not least of all, the German-Russian nuclear cooperation is steadily progressing.[9] The Russian Inter RAO UES electrical company, is examining the possibility of delivering electricity from the nuclear power plant planned for the Russian exclave Kaliningrad to Germany via a cable running along the Baltic Sea Gas Pipeline.[10] The intertwining of the nuclear economic cooperation between Germany and Russia has reached a highly sensitive area. Shutting down German nuclear power plants could, in the future, take place with decisive Russian participation. The Russian Rosatom nuclear holding, an ally of the German Siemens Corp. has bought the German Nukem Technologies Company, which until 2006 had been owned by the German RWE electrical company. Nukem has rich experience in shutting down nuclear reactors and stocking radioactive materials. In the 80s it was in the spotlights of one of West Germany's largest nuclear scandals for its negligent storage practices. The Nukem company, now in Russian hands, stands a good chance of receiving the contracts for shutting down German nuclear power plants.[11]
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