Business with Obstacles

BERLIN/MOSCOW/KIEV | | ukrainerussische-foederation

BERLIN/MOSCOW/KIEV (Own report) - Berlin is taking steps to possibly end sanctions against Russia. Today, almost one year after the signing of the Minsk II Agreement - whose full implementation is still considered as a prerequisite for ending the sanctions - the Bavarian Prime Minster, Horst Seehofer is expected to arrive in Moscow for talks on promoting the renewal of German-Russian business relations. Seehofer can build on decades of Bavarian-Russian cooperation. His visit to Moscow is closely coordinated with Germany's federal government. The EU and NATO are also involved in Berlin's cooperation efforts. Monday, Chancellor Angela Merkel also increased pressure on Ukraine's President, Petro Poroshenko to finally obtain approval from Kiev's parliament for the constitutional amendment providing Eastern Ukraine's special status, as agreed upon in the Minsk II Agreement. Until now, nationalists and fascists have prevented this measure.

No Majority in Sight

From Germany's perspective, Poroshenko's visit on Monday had become necessary because Kiev has continued to obstruct the implementation of Minsk II. In a first reading, the constitutional amendment, provided for in the Agreement, was passed by the Ukrainian parliament with a narrow majority. However, violent protests by Ukrainian fascists had accompanied the parliamentary debate, at the time. Three policemen were killed with a hand grenade in the fascists' attempt to storm the Verkhovna Rada. The constitutional amendment can only be adopted with a two-thirds majority - which is nowhere in sight, due to the Ukrainian nationalists und fascists' ongoing resistance. Kiev, therefore, is playing for time, and postponing the vote to sometime in the future.

The Main Obstacle

Kiev's refusal is provoking growing discontent in Berlin. In the meantime, Moscow has "intensified" its efforts to implement Minsk II, according to the German government's Coordinator for Intersocietal Cooperation with Russia, Gernot Erler. President Vladimir Putin has appointed Boris Gryzlov as Russia's negotiator in talks on the implementation of the Minsk agreement. Gryzlov is the former President of the Duma and is considered very influential. The Russian government - according to Erler - is hoping that the EU will not renew its sanctions this summer. Kiev, in particular, is posing problems. Berlin is therefore "soliciting" Kiev, also in "direct talks with members of the Ukrainian Rada" to finally adopt the needed constitutional amendment.[1] Yesterday, Erler confirmed that "the current political process" is "the main obstacle" - the "implementation of changes in the Ukrainian constitution" and the pending adaption of the electoral law for organizing elections in Donetsk and Luhansk. "Germany is very interested in seeing that the pending points of the Minsk Agreement are finally implemented," Erler confirmed.[2] During her talks with President Petro Poroshenko in Berlin Monday, Chancellor Angela Merkel has, therefore, increased pressure on Ukraine.

Economic Interests

At the same time, Berlin is making preparations to end sanctions against Russia, as mainly, German business circles have been demanding for quite some time. ( reported.[3]) Today, Wednesday, Bavaria's Prime Minister, Horst Seehofer, is expected to arrive in Moscow for talks. As a German government spokesperson confirmed, the visit is explicitly coordinated with Chancellor Merkel and Foreign Minister, Frank-Walter Steinmeier. Above all, Seehofer will be primarily concentrating on Bavarian economic interests, according to reports. At the peak of German exports to Russia in 2012, Bavarian enterprises accounted for more than 12 percent. They now are particularly complaining about the slump in their business with the East. Reportedly, Bavaria's Prime Minister intends to also include the issue of EU sanctions in his negotiations. Another visit has reportedly been planned in the second half of the year, where Seehofer is expected to be accompanied by German managers, possibly the head of Siemens, Joe Kaeser. Last spring, Siemens was already reporting that company sales to Russia had slumped to nearly half.

Bavarian-Russian "Partnership"

During his visit, Seehofer can build on the long-standing special relationship the state of Bavaria has nurtured with Russia. Already back in December 1987, Bavaria's Prime Minister, at the time, Franz-Josef Strauss visited Mikhail Gorbachev in Moscow, where they discussed Gorbachev's reforms. Subsequently, the governments in Moscow and Bavaria initiated a close cooperation - today officially called a "partnership" - which had been exceedingly profitable for Bavaria's economy, until sanctions were imposed. Last year, in spite of the sanctions, Bavaria and Russia have systematically enhanced their cooperation. This included a "dialog" in the field of municipal politics, promoted by the CSU-affiliated Hanns Seidel Foundation with the organization of a visit to the Russian capital by a group of Bavarian politicians, in mid-October. Several CSU politicians visited the Russian capital in late October, for detailed talks on key issues of foreign and military policy, and in mid-November, Bavarian politicians and business representatives went to Moscow for a "German-Russian Energy Dialog."

In Synchronization with Brussels

Observers note that the Austrian Minister of the Economy, Reinhold Mitterlehner, landed in Moscow Tuesday for talks, notably to negotiate questions of economic cooperation, according to Austrian media. He was accompanied by influential managers, including the head of the OMV energy company, Rainer Seele. Seele had headed Germany's Wintershall natural gas company, prior to his transfer to OMV, and is still President of the German-Russian Foreign Chamber of Commerce.[4] Subsequent to the development of cooperation between Wintershall and Gazprom, he is now - successfully - engaged in the development of cooperation between Gazprom and OMV. OMV will take part in the construction of two new strings of the Nord Stream pipeline and have access to Russian natural gas fields. This was possible, because the sanctions are imposed on the oil, but not on the natural gas sector. It is reported that, not only has Mittlerlehners trip been "meticulously planned" for months, but that it has been synchronized already in October, with President of the EU Commission, Jean-Claude Juncker.[5]

The Next NATO-Russia Council

On Germany's initiative, developments are taking place in relations between Russia and NATO, as well. In mid January, Foreign Minister Steinmeier announced that he had "sought to revive the NATO-Russia Council during the most recent NATO Council meeting." He assumes "that we, in time, will be able to make the proposal in Brussels of returning to the talks at the ambassadorial level."[6] This was confirmed last week by NATO's General Secretary, Jens Stoltenberg. "We are examining the possibilities of organizing a NATO-Russia Council."[7] Attempts to now return to closer cooperation with Moscow - of course with a simultaneous confrontation via NATO rearmament in Eastern Europe [8] - will put increased pressure on Ukraine, to fulfill the stipulations in the Minsk II Agreements.

Other reports on the current German policy toward Russia can be found here: To Win the Second Cold War, German-Russian Flagship Projects, and Like in the Cold War.

[1] Diplomatische Annäherung. 19.02.2016.
[2] Seehofer darf Regierung nicht in den Rücken fallen. 02.02.2016.
[3] See Global Policy Orientation and German-Russian Flagship Projects.
[4] See German-Russian Flagship Projects.
[5] Judith Hecht, Thomas Vieregge: Mitterlehner und Seehofer preschen in Moskau vor. 02.02.2016.
[6] "Das Problem ist größer als die Querelen in CDU und CSU". Frankfurter Allgemeine Zeitung 16.01.2016. See Wie im Kalten Krieg (II).
[7] Nato bereitet ersten Nato-Russland-Rat seit Krim-Annektion vor. 28.01.2016.
[8] See Message to the World and The Article 5 World.