VLADIMIR PUTIN
ARCHIVE OF THE OFFICIAL SITE
OF THE 2008-2012 PRIME MINISTER
OF THE RUSSIAN FEDERATION
VLADIMIR PUTIN
ARCHIVE OF THE OFFICIAL SITE
OF THE 2008-2012 PRIME MINISTER
OF THE RUSSIAN FEDERATION
VLADIMIR PUTIN
Germany is Russia's main trade and economic partner accounting for about 10% of Russia's total foreign trade. Russia's share in Germany's foreign trade is 3% (12th overall).
Russian-German trade has been growing very fast of late: it surged fourfold over the past six years. In January-October 2008, it reached a record $58 billion (up 40% from $52.8 billion in 2007), with Russian exports amounting to $29.6 billion (up 44%) and imports to $28.4 billion (up 37%). Russia's trade surplus thus equaled $1.2 billion. According to tentative estimates, Russian-German trade in 2008 may reach $63-$65 billion.
Traditionally, raw materials, mostly oil and gas, account for the bulk of Russian exports (80%). Semi-finished goods, primarily rolled sheet metal and alloys of ferrous and non-ferrous metals, account for 11%, and petrochemical products for 3.3% of the total. The share of finished goods (such as newsprint, textile goods and pharmaceuticals) in Russian exports to Germany is about 4%, including high-tech products accounting for less than 1% (radioactive elements, isotope fission equipment, turbojet and turboprop engines, gas turbines, electronic tubes and lamps, diodes, transistors, semiconductor devices, integrated circuits, aircraft and space vehicles).
Russia meets 40% of the German economy's needs for natural gas, 33% for oil, and over 10% for non-ferrous metals and fertilisers.
Quantitative restrictions on supplies of some steel products have a negative effect on the development of Russian exports to Germany. There are some restrictions involving nuclear materials and uranium enrichment services, Russian asbestos and some fur goods. A system of protectionist measures closes the German agrarian market to third countries' goods preventing exports of Russian meat and dairy products to Germany.
Manufactured goods account for a larger portion of Russian imports from Germany, 62% of which are machinery and equipment, chemicals 18%, metal products 7%, wood-working, pulp and paper industry goods 3.2%, and textiles 1% of the total. The share of semi-finished goods is about 2% and foodstuffs, 5.6%.
About 700,000 jobs in Germany are connected with export production oriented to Russia. The Federation of German Wholesale and Foreign Trade (BGA), a leading organisation in the sector, predicts that within the next few years Russia will become the key importer from Germany (after the United States) among non-EU countries pulling ahead of China.
Germany was Russia's main creditor for years accounting for over 40% of Russian debt to the Paris Club countries. In August 2006, Russia signed the final agreement in Berlin on the earlier repayment of the remainder of the former USSR and Russia's foreign debt amounting to US$10.4 billion (€8.14 billion). On October 31, 2006, the sides signed a Russian-German intergovernmental agreement in Stuttgart on the completion of settlements and fulfillment of the former USSR's obligations connected with the implementation of the Yamburg agreements (on the final repayment of Russia's €1.125 million debt to Germany).
In January 2007, Germany promoted Russia's transfer from the 4th to the 3rd risk group (with eight groups in all) as classified by the Organisation for Economic Cooperation and Development (OECD). In 2006, Germany issued state guarantees for transactions with Russia in the amount of €2 billion.
Germany supports Russia's efforts to join the OECD and the WTO.
Germany is one of the leaders (fifth after Cyprus, the Netherlands, Britain and Luxembourg) in terms of accumulated foreign investments in Russia: as of October 1, 2008, investment amounted to $14.9 billion, including $5.5 billion in direct investments, $24 million in portfolio investments, and $9.4 billion in other investments. Germany's share in the overall structure of foreign investments in Russia is 6%.
About a third of German companies in Russia are connected with production, nearly half of them are engaged in promoting their goods on the Russian market, and the rest operate in the services sphere. In January through September 2008, Russia received $6.5 billion of German investment, 86% more than in the respective 2007 period. A larger portion of investments went into the metallurgical sector and finished metal goods production ($1.8 billion), wholesale and retail trade ($2.2 billion), foodstuffs production ($332 million) and communications ($148 million),
The main result of German investors' operations on the Russian stock market was the purchase of controlling stakes in the Russian insurance companies ROSNO and Progress-Garant in 2007.
In all, nearly 4,600 companies with German participation and about 800 companies with 100% German capital operate in 78 Russian regions (primarily, in Moscow and St Petersburg).
According to German statistics, the real amount of German investments in Russia made through foreign companies owned by Germans is €25-€28 billion. Surveys conducted in September 2008 show that 70% of German companies operating on the Russian market are planning to boost their business activity in Russia and 40% are ready to invest in building new plants and factories.
As of October 1, 2008, Russian companies' investment activity on the German market amounted to $2.8 billion (5.3% of total foreign investments), including $484 million in direct investments and $2.3 billion in other investments. Russia's oil and gas majors, Rosneft and Gazprom, are the most active Russian companies on the German market. Other sectors attractive for Russian investors include mineral extraction; pulp and paper, chemical and metallurgical industries; wholesale and retail trade; transport, communications, logistics and tourism. About 100 joint ventures with Russian capital are registered in Germany, mostly in the non-production sectors.
Cooperation in the energy sector is one of the most promising trends in Russian-German economic cooperation. The signing of an agreement on the construction of the North European gas pipeline (Nord Stream) between Gazprom and the German companies E.ON Ruhrgas and BASF has given a powerful impetus to the development of Russian-German energy dialogue. Since December 2007, German business (represented by BASF) has been participating, for the first time ever, in Russian natural gas production (at the Yuzhno-Russkoye field). In October 2008, E.ON Ruhrgas also joined the project. In late 2007, E.ON bought the TGK-4 territorial generating company, and in early 2008, Germany's RWE energy concern purchased a 33.47% stake in TGK-2.
