| After the EU enlargement, the economies of Russia and Germany grew even closer For many years now, experts have not tired of repeating their conclusion that the initial conditions and needs of Russia and Germany in many respects complement each other. Against this background, both countries represent an “ideal couple”. At the same time, it is also a fact that Germany has been Russia’s largest trading partner for more than thirty years. Russia purchases over 14% of its total imports from Germany. Almost 8% of Russian exports last year went to Germany. Russia ranks third in German trade with the countries of Central and Eastern Europe after Poland and the Czech Republic.
Due to the stable situation in politics and the national economy in recent years, the confidence of German entrepreneurs in the Russian economy has increased. Although the Yukos affair put this trust to the test again, it was once again confirmed that German-Russian cooperation is long-term oriented and remains viable even in difficult times. Germany is the largest total investor in Russia in terms of investments accumulated since the early 90s with a total amount of $10.5 billion. This is 22% of total foreign investment in the Russian economy, which is twice the level of US investment in Russia. Germany, with its level of direct investment in the Russian economy of $2.5 billion, ranks fifth after Cyprus, the USA, Great Britain and the Netherlands. The most important target industries for German investors were energy, food and processing industries, as well as wholesale and retail trade. This year we expect an increase in the level of investment from not only large, but also medium and small enterprises. This happens for the reason that, in connection with the expansion of the European Union to the east, Russia, as a neighboring country in Central and Eastern Europe, has moved even closer to the German economy. Even if the European Commission concludes that Russia cannot become a full member of the EU, a strong link between Russia and the United Europe is not only conceivable - it has already taken concrete shape within the framework of a single economic space. Russia's growing integration into the world economy is an additional impetus. The breakthrough in bilateral negotiations between Russia and the EU on accession to the WTO in May of this year makes entry into this organization possible next year.
For German companies, Russia offers many opportunities in the fields of energy, retail trade, the food industry, industry, construction materials, the automotive industry and the supply of components for it, as well as in the provision of services. German investments are the basis for growth, job creation and infrastructure improvements in Russia. Every German company that sets up a new production site simultaneously creates new orders for local suppliers and jobs in the region. This is also entirely true for the development of dealer networks in response to rising consumption levels. Last but not least, the long-term successful presence of German companies in Russia is an extremely important “parting word” for potential investors from other countries.
Of course, Russia needs to find answers to a number of challenges of the time: it is necessary to carry out administrative reform, reform of natural monopolies and housing and communal services. After the administrative reform, the Eastern Committee of the German Economy expects that the course of economic reforms will continue. The parliamentary majority close to Vladimir Putin will help in this. As well as the new reform-oriented government of Russia. At the same time, the eradication of corruption and arbitrariness of officials (and these are the main obstacles to investment in Russia) should occupy a high place on the list of reforms.
The priority goal of the Eastern Committee is to further increase the intensive participation of German enterprises in Russia. Within the framework of the Russian-German strategic working group, the Eastern Committee actively petitioned for the allocation of a credit line in the amount of 50 million euros to Russian banks to support medium-sized businesses in Russia. This amount has already been made available for use with the help of the German Credit Office for reconstruction and development. But it is the middle class that is the main support and hope of any well-functioning economic system. Klaus Mangold, Chairman of the Eastern Committee of the German Economy |
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