Sanctions on Russia ‘poison for region’s economy’

Germany’s leading business associations have warned against imposing broader economic sanctions on Russia.
Chairman of the Committee on Eastern European Economic Relations Eckhard Cordes said discussing this kind of pressure on Moscow was “poisonous to the region’s economic development”.
“No sanctions have been introduced by now, but discussions on them can already be heard, and they are dragging down the economy,” Cordes said, noting that some 25,000 jobs in Germany were at risk from further escalation of the Ukrainian crisis.
A survey conducted by the Committee on Eastern European Economic Relations showed that 44% of more than 100 German companies questioned strongly opposed potential economic sanctions against Russia. Some 47% said they regarded sanctions as “a last resort”.
The crisis in Ukraine was damaging German exports to the war-torn region and to Russia, the committee said on Friday.
In the first four months of this year, exports to Ukraine and Russia declined by more than €2.0 billion ($2.7 billion), according to data compiled by the committee.
Exports to Ukraine plunged by 31% or by €500 million, while exports to Russia were down 14% or by €1.7 billion, the committee calculated.
“Extrapolated across the whole year, this drop in exports is putting 25,000 jobs in Germany at risk,” said committee chief Cordes.
“This crisis is poison for the Russian and Ukrainian economies and the longer it lasts, the bigger the dangers of contamination for the neighboring economies and for Germany,” Cordes warned, noting the need for everyone involved to stop the crisis from spreading and use the current opportunities to de-escalate the situation.
Cordes’ comments reflect worries among German industry giants about the effects of sanctions on the domestic economy and wider afield in Europe.
Leading names such as chemical giant BASF, engineering's Siemens, Volkswagen, Adidas and Deutsche Bank have all made their opposition to broader economic sanctions against Russia known in recent weeks, both in public and in private.
German experts are on record as warning that economic sanctions will have a negative impact on a German economy determining to a large extent the eurozone's welfare. Trade turnover between Russia and Germany reached 76 billion euro last year.