Germans to provide money, brains and high technology.
Prime Minister Vladimir Putin met with German businessmen yesterday after opening a Volkswagen factory in Kaluga the day before. He warmly thanked the German partners for their commitment to cooperating with Russia and in turn, the Germans promised not only to provide investments, but also to contribute to the formation of a middle class in Russia.
Mr Putin meets with German bankers and businessmen almost every year, with both sides now treating such meetings as traditional.
Yesterday's meeting took place at the Russian Government Reception House, where the Byzantine luxury served to stress the special status of Russian-German relations. Mr Putin drove this point home by going around the room and shaking everyone's hand before the conversation had even started. The faces of those present - both German businessmen and Russian government officials - oozed with good will. After all the formalities, it was time to exchange official pleasantries.
The Russian Prime Minister praised Germany for being Russia's leading economic partner (trade between the two countries topped the $60 billion mark at the end of 2008). "Of course, this year, there will be a significant drop due to the crisis," Putin acknowledged. Yet he chose to look on the bright side. In the first four months of the year, German investments in the Russian economy had grown by 26% against the same period of last year. The Prime Minister chose not to provide economic explanations for this phenomenon, nor did he give the statistics for the nine months of the year that were probably affected by the global crisis.
"It's a good sign that our relations are developing," Putin said, stressing the balanced bilateral trade, diversification of cooperation in such key economic sectors as agriculture, construction, car-manufacturing and high technologies.
Klaus Mangold, Chairman of the Committee on Eastern European Economic Relations, delivered a response speech that should have been broadcast by the media. "Today, we have the most high-powered German delegation ever," he announced. He mentioned that the total annual trade stood at 500 billion euros, and that the German companies whose top managers were in Moscow to meet with the Russian president employed a workforce of 2 million. According to Klaus Mangold, the 6000 German enterprises that have come to Russia over the years have no intention of curtailing production. He assured his audience that German business is ready and willing to invest in infrastructure and energy projects in Russia, and also to expand the networks of pipelines. The presence at the head table of managing director of Nord Stream AG, Mattias Warnig, Chairman of the Board of E.ON Ruhrgas AG Bernhard Reutersberg, and Chairman of the Board of Siemens AG Peter Loscher gave Mr Mangold's statement even more credence. Another area that German business is eyeing is the Russian government's large-scale programme for privatising the property which was taken over by the state in the midst of the crisis. That process, Mr Mangold believes, could lay the groundwork for a new bilateral relationship and make Russian-German economic cooperation even more effective. As a result, Russia would not only get more German investments, but also modern technologies, which are vital for the Russian economy to become more competitive. Mr Mangold also promised an additional multiplier effect, i.e. the creation of a middle class in Russia - which, apparently, is something the Germans are also interested in.
Vladimir Putin welcomed this kind of assistance and pointed out that the Germans have no particular need for administrative support from the Russian government. "It seems you do not need our administrative help," the Prime Minister said, with an interesting mixture of surprise and joy.
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German business is particularly interested in the government's plans to privatise the assets which were taken over by the state during the crisis.