Russia’s Trade Relations with Germany Will Weather the Storm of the Current Cooling

In light of the tensions stemming from the recent conflict in Ukraine, the question over the future of Russian-German trade relations has evolved into a hot button issue of discussion in European economic forums. Historically strong ties between the two powerhouses of the continent faced strains as Germany took part in an American-led Eurozone response to Russia’s intervention in Ukraine that began after protests erupted in February of this year (2014). In the months since the crisis erupted, a series of sanctions have been leveled against sectors of the Russian economy that are associated with the government of President Vladimir Putin, including the defense, banking, and energy sectors. While many observers have pointed to these sanctions and the cooling of relations between political leaders as signs that the trade relations connecting the two states may be at risk, it is clear that the economic interests and cultural bonds are central to the continuity of comprehensive commerce between Russia and Germany over therussia germany long term.

At the most basic of levels, there currently exists a very strong people to people bond between the two countries. As of 2012, it was estimated that nearly 3.5 million Russian speakers live in Germany. This includes immigrants, ethnic Russians who have lived in Germany for multiple generations, and Jewish migrants who arrived following the fall of the Soviet Union. The vast majority of these people have maintained their ties to Russia, including with their families who have continued to live there. Many of these Russian speakers also build the bridge that are the backbone of the trade between the two countries and play an active role in not only the national level trade, but much of

the basic commerce of consumer goods. Placing a wedge between these two communities due to a geopolitical disagreement over policy may prove to be more difficult than government officials are anticipating.

On a national level that incorporates the purview of strategic cooperation, a quick glance at the immense rate of trade that exists in the Russian-German relationship can highlight further barriers to a breakdown in the current levels of trade. While the sanctions listed above have targeted spheres of business that are believed to be of personal interest to President Putin and his allies, there are two factors that must be taken into account. The first pertains to the energy sector. Russia is one of the primary sources of European energy with massive reserves of oil and natural gas. Europeans and Germany in particular are dependent on this energy to heat their homes and power their industry. In light of the sanctions levied at the Iranian oil imports over their suspected nuclear weapons program, Germany is most definitely feeling the squeeze over the need for a steady supply of fuel. Secondly, besides their immense energy production, Russia holds some of the largest sources of natural resources including timber, metals, and other commodities that are essential for Germany’s manufacturing industry. As the manufacturing powerhouse of Europe, it is beholden upon the German leadership to weigh carefully potential risks that could affect their nation’s economy. If the flow of these resources were to be stopped, the blow that would fall upon Germany’s GDP would be intense.

Moreover, on top of these compelling arguments against a raid deterioration of economic relations between Russia and Germany, it is important to remember that all shifts in geopolitical realities, as with the disagreement over policies relating to Ukraine, force national leaders to adjust their approach to their counterparts as a part of growing pains. As Russia journeys through its repositioning on the regional and global stage and Germany as a part of the European Union also expands its reach into former Soviet territory, such abrasions will arise. Through these growing pains, trade can be expected to survive and ultimately strengthen.