Just a month ago, Germany's powerful business lobby threw its weight behind tougher sanctions against Russia (dropping its previous objections). It appears they are now regretting that decision. As The Federation of German Industry (BDI) reports today, exports to Russia in H1 2014 dropped 15.5% from 2013 and "may drop by as much as 25% - posing a risk to 50,000 German jobs." We are sure, as Zee Germans look across the pond at the S&P 500 hitting record highs, BDI's conviction that Russia's action must face significant consequences may just fall apart again.
Just 3 weeks ago, Germany’s powerful business lobby has dropped its opposition to tougher sanctions against Russia ahead of today’s crunch EU ambassador meeting in Brussels.
BDI chief Ulrich Grillo said sanctions could would come at a “painful” cost to European business, and to German exporters, but that the game had changed with Russia.
“The BDI and I personally have become convinced that the behaviour of the Russian government in the Ukrainian conflict of secession must have noticeable consequences for Moscow, ”
And now... (as Bloomberg notes),
Export of German-made machine spare parts in particular hit by sanctions due to possible dual-use nature of goods, BDI industry group’s East European Committee said today in e-mailed statement.
Sanctions also impacting German exports to states linked to Russia via excise agreements: 1H exports to Belarus drop 21%
2014 German exports to Russia may drop by as much as 25%, pose risk to 50,000 German jobs
* * *
German exports to Russia plunged in the first half of 2014, led by a sharp fall in car and machinery shipments, amid an escalating standoff between the West and Moscow over Ukraine.
The value of German shipments to Russia fell 15.5 percent to 15.3 billion euros in the first six months of the year, data from the Statistics Office showed. That was a sharper drop than in the first quarter of the year, when exports to Russia dropped by 13 percent.
German factories making cars and car parts saw the value of goods sent to Russia slump 24.4 percent, while the fall in machinery exports was 18.7 percent.
Exports of cars and car parts make up around a fifth of German exports to Russia and the industry could get a further battering in the coming months if, as a media reports suggest, Russia tightens retaliatory sanctions against Western nations to include a ban on car imports.
And the most ironic...
German imports from Russia climbed by 2.1 percent to around 20.3 billion euros in the first half of the year, driven by an increase in German purchases of coke and refined petroleum products.