German firms ‘concerned’ over business in Russia ​as sanction fears grip economy

Nigel Farage calls out Germany over Russia response

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On Monday, Russia was warned it will be swiftly hit with an “unprecedented package of sanctions” if they pursue an invasion of Ukraine. This came after world leaders from Britain, Germany, France, Italy, Poland and the US presented a united front against Vladimir Putin.

Germany raised concerns over the reaction to the threat posed by Moscow to Kiev after it blocked NATO ally Estonia from giving Ukraine military support.

But now, businesses across the country are concerned any sanctions on Russia will hit them the hardest.

Gingerbread company, Lambertz Group from Aachen, has significantly expanded its business over the past 10 years, especially in Russia with a sales office opening in 2020.

But due to the ongoing war of words between Moscow and Kiev, the company has raised concerns about their business.

Hermann Bühlbecker, the sole shareholder of the Lambertz Group from Aachen, said: “I am very concerned about the overall situation in this conflict and possible further escalation levels.

“In general, but also in terms of our business relationships, conditions and goals in and with Russia.”

Furthermore, a survey of 100 German company bosses by the consulting company, EY, found Russia is still an important trading partner, especially for German industry.

For its survey, EY asked 2,410 CEOs in large companies worldwide what they currently see as the greatest risk for their company.

Around 44 percent named increasing geopolitical tensions, trade conflicts, protectionism and sanctions.

This was only just behind the fear of the effects of climate change.

Constantin M. Gall, partner and head of strategy and transactions at EY in the Western Europe region, said: “We are massively dependent on free access to foreign markets and have in benefited significantly from the good development on foreign markets in recent years.

“Trade wars, sanctions, punitive tariffs and similar measures fundamentally call Germany’s business model into question and put a strain on those companies that have been particularly successful on the world markets.”

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Since 2014, Russia has fallen from 10th to 13th place as a sales market for German products.

In 2020, German companies exported goods worth around 23 billion euros.

Germany came under fire after critics claimed Berlin was reluctant to move against Russia due to the Nord Stream 2 pipeline, despite threats from Berlin to cut the deal in the event of a war.

Foreign policy writer, Tom Rogan, argued Germany was prioritising “keeping Mr Putin calm” than “allied democratic solidarity”.

He wrote in the Wall Street Journal: “As Vladimir Putin’s invasion of Ukraine looms, most Western allies are acting to support Kyiv and reassure vulnerable members of the North Atlantic Treaty Organisation.

“Germany is taking a different approach, putting Russian interests before those of the West.

“Berlin reveals a serious reality: Facing the two most consequential security threats to America and to the post-World War 2 democratic international order—China and Russia—Germany is no longer a credible ally.

“For Germany, cheap gas, car exports to China and keeping Mr Putin calm seem to be more important than allied democratic solidarity.

“Ukraine’s fate will convey on Germany a heavy burden of responsibility.”

Additional reporting by Monika Pallenberg

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