MOSCOW, April 2 (RIA Novosti), Daria Chernyshova - German companies would be exposed to wider sanctions imposed on Russia, said Stephanie Hare, Senior Analyst for Western Europe at Oxford Analytica.
«German companies would be exposed, and given how little growth there is in the Euro-area/EU, it would be preferable to avoid a disruption to the flow of trade," Hare told RIA Novosti.
Germany has nurtured strong trading ties with Russia and is currently the European Union's biggest exporter to Russia. Bilateral trade between the two reached $106 billion last year, and German investment in Russia amounts to $28 billion, according to the German Association of Chambers of Industry and Commerce.
Moreover, Germany is one of the 26 EU members that are dependent on gas imports from Russia. «Perhaps the greatest vulnerability is Europe's dependency on Russian energy imports," Hare said.
Germany is the locomotive of the Eurozone's economic recovery, which has so far been sluggish. And anything that hurts the German economy has the potential to have knock-on effects throughout the Eurozone, Hare believes.
German car manufacturers are likely to suffer if sanctions against Russia become more substantial, as about half of German exports to Russia are vehicles and machinery.
The analyst also noted that wider economic sanctions are unlikely, as they «would only be considered if Russia were to invade southeastern Ukraine, which looks unlikely so far."
The EU, US and Canada last month imposed sanctions on a number of senior Russian officials and businessmen whom the West accuses of involvement in Crimea's joining Russia. The sanctions include travel bans and asset freezes. The West has been calling to introduce tougher sanctions on Russia.
Russian experts believe these sanctions are counterproductive. Sergei Markov, the director of the Institute for Political Studies, says 90 percent of Russians hate the idea that officials and businessmen have accounts and property abroad. «So a wide majority of Russians like the sanctions," he said. Markov added that American President Barack Obama in effect backed Putin's course of encouraging the repatriation of the wealth of elites.
The expert also highlighted that the sanctions gave a chance to invest in Russia's domestic infrastructure, hi-tech production «instead of buying US securities.» So all in all, Markov concluded, «Russia only wins from sanctions."
Earlier Tuesday, the US House of Representatives voted in favor of a bill authorizing sanctions against Russian officials in response to their actions in Crimea. The bill now awaits Obama's signature to become law.
Several Western politicians have been urging wider sanctions on Russia, while others see them as an echo of Cold War stereotyping.
European Commission Vice President Olli Rehn said Tuesday the European Union should refrain from introducing broad economic sanctions against Russia if the situation around Ukraine does not deteriorate. Rehn believes that no sensible European wants to see economic sanctions or any other escalation to the crisis.
