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R E V I E Weconomic diplomacy between Germany and Russia
by: 1st course master student.N. Hasanovby: Doctor of Economicsextraordinaryplenipotentiary of Uzbekistan.I. Mavlanov
Tashkent - 2013
Contents
Introduction.
. Russian Federation Political and Economic relations.
. Justice and home affairs.
. German-Russian strategic partnership.
. The role of economy in bilateral relations.
. Regular meetings make for progress in cooperation: Visa facilitations, Trade relations, The German Russian Year.
. Future shape of Russian-German Relations: driving force of Russian-EU relations.
Conclusion..
Introduction
Russian relations have a long and shifting history, ranging from cooperation and even alliance to strain and to total warfare. Since the end of the Cold War and German re-unification, Germany and Russia have developed a "Strategic Partnership" in which energy is indisputably one of the most important factors. Germany and Russia depend on each other for energy, namely in Germany's need for energy from Russia and Russia's need for heavy German investment to develop her energy infrastructure.earliest contact between Germans and Slavs is unknown. Substantive contact goes back to the Teutonic Knights' campaigns in the Baltic.before the mid 18th century was aloof from German affairs, while Germany was divided into numerous small states under the nominal leadership of the Holy Roman Emperor.the Great Northern War with Sweden, however, Russia's power spread into the Baltic.
Relations between the two nations since the fall of socialism have been generally good but not always without tension. German chancellor Gerhard Schröder placed high value on relations with Russia and worked for the completion of the Nord Stream gas pipeline between them. His successor Angela Merkel, an Easterner and former dissident, has been more critical and clashed with Russian president Vladimir Putin over human rights and other issues. Mrs. Merkel had however a very good relationship with former Russian President Dmitry Medvedev. The Lufthansa cargo hub dispute took place in 2007.relations between the two countries got strained in the turn of the first decade as the German authorities criticized the parliamentary and presidential elections in Russia, then started to regularly give negative assessments of the changes taking place in the country. The coordinator of the German government on cooperation with the Russian Federation, Deputy Chairman of the ruling Christian Democratic Union in the Bundestag, Andreas Schockenhoff, criticized the new Russian laws on rallies and NGOs, the return of the defamation article to the Russian Criminal Code, as well as the trial of Pussy Riot. In response, the Russian Foreign Ministry accused Schockenhoff of using "smear tactics". German Foreign Minister Guido Westerwelle then said that Berlin would be "very closely" monitoring the actions of the Russian authorities in the field of human rights. "The partnership relations do not imply the rejection of criticism", warned Westerwelle.German reunification, Germany is home to a fast growing and large community of people of German ancestry who have moved to Germany as full citizens. In the 1990s, some 100,000 to 200,000 arrived annually. Germany also has funded the communities that remain behind in Russia.
.German-Russian Political and Economic relations
Russian relations are developing positively and dynamically. Mutual interest is keen and bilateral cooperation is close. This is reflected in the annual intergovernmental consultations, the most recent of which were held on 16 November 2012 in Moscow, and in the regular visits in both directions in the political, economic and cultural spheres. Russia sees Germany as a leading European partner, its most important one in economic terms. Germany has a strong interest in integrating the Russian Federation into multilateral structures and supports the process of transition there. The strategic partnership with Russia also entails frank, constructive and critical dialogue on differences of opinion (freedom of the press, human rights) as well as cooperation in modernizing amongst others the countrys legal sector, health care and demographics, basic and further education and training, energy and transportation.an 8.7 per cent share in Russias foreign trade, Germany is Russias third most important trading partner worldwide, after the Netherlands, which imports mainly petroleum and petroleum derivatives from Russia via Rotterdam, and China. Following a 29 per cent increase in bilateral trade in 2011 compared with the previous year, bringing its total value to approximately EUR 75 billion, the first half of 2012 saw a further increase of 12 per cent. German exports to Russia grew by 16 per cent and imports from there by 8 per cent. Russias principal exports to Germany were raw materials, in particular oil and natural gas, as well as metal goods and petrochemical products. Germanys main exports to Russia were mechanical engineering products (23 per cent), vehicles and vehicle parts (21 per cent), chemical products (8 per cent) and data-processing and electrical equipment (both 7 per cent).its need to comprehensively modernize, Russia is an important and receptive export and investment market. In the first half of 2012, investment by German companies in the Russian Federation amounted to EUR 19.2 billion, about the same level as in the half of 2011. Around a third of the investments made were to expand existing company branches, in some cases involving the establishment or expansion of production facilities. There are currently more than 6,500 companies with German equity participation in Russia, operating in 81 out of 83 Federation subjects (administrative units). Although most regions in Russia actively seek to attract foreign investment, and in some cases actively promote such investment, doing business in Russia requires circumspection and careful consulting on account of the countrys many idiosyncrasies. With the passage of anti-corruption legislation, the Russian government has tackled one of the main problems affecting foreign trade relations. Customs clearance, certification and administrative procedures often still prove difficult.addition to that, I decided to add the list of Co-operation actions:
·Germany and Russia are co-operating in building the Nord Stream gas pipeline.
·Many former East Germans have a good knowledge about Russia. The German language is in a firm second place (behind English) at Russian schools, and President Putin speaks German fluently. On 11 April 2005, a "Joint Declaration on a Strategic Partnership in Education, Research and Innovation" was signed by Chancellor Schröder and President Putin. This accord aims at stepping up bilateral cooperation in the education sector, particularly in training specialist and executive personnel.
·Germany has a heavy industry with the size and capacity to modernize infrastructure in Russia. Russia in turn has vast natural resources which are of significant interest to the German economy.
·A major success in environment policy is Russia's ratification of the Kyoto Protocol on 27 October 2004, which will also bring economic benefits.
·Germany was a strong supporter for Russia's participation in the Group of 8.
·Dresdner Bank of Germany has close ties to Gazprom, by far Russia's largest industrial company.
·Germany alongside with France and Russia opposed Ukrainian and Georgian invitation to NATO during NATO's Bucharest summit in 2008. Consequently, NATO didn't invite Ukraine and Georgia to MAP.
.Justice and home affairs
russian federation economy german
Cooperation in the legal sector is a priority area of the German-Russian modernization partnership. It aims to strengthen democratic and market-economy institutions based on the rule of law and with the support of civil society.important instrument of cooperation are the German-Russian consular consultations which have been held regularly since 2008.long-term goal is visa-free travel. In late 2011, the European Union and the Russian side agreed on a catalogue of joint steps that need to be implemented to achieve this goal. This catalogue is currently in the implementation phase. A mutual visa facilitation agreement between the European Union and the Russian Federation came into force as early as 1 June 2007. For many citizens, this agreement reduces the number of documents that have to be presented when applying for a visa, enables a greater number of one-year and several-year visas to be issued and extends the group of those exempt from visa fees. An agreement between the European Union and the Russian Federation on the readmission of unlawful migrants also came into force on 1 June 2007. This agreement regulates the mutual return of foreign nationals illegally residing on the territory of the EU or the Russian Federation. The relevant German-Russian implementing protocol was signed on 19 July 2011 during the bilateral intergovernmental consultations in Hanover.
3.German-Russian strategic partnership
and Russia share a centuries-old history which has often been difficult and is full of contradictions. Today the two countries are linked by a strategic partnership: they depend on each other when it comes to dealing with key international issues. These include disarmament and arms control, international crises such as Afghanistan, Iran and the Middle East, as well as global challenges such as energy security, climate change and the fight against organized crime.Russian relations consist of several elements:
·intensive and frank political consultations,
·economic links which are developing dynamically again following the economic crisis,
·the civil society dialogue (inter alia, since 2001 in the form of the Petersburg Dialogue)
·and cultural exchange.Partnership: The strategic partnership with Russia must be put on a more sustainable footing in order to cope with the challenges of globalization. Germany and Russia have therefore agreed on a Modernization Partnership to intensify their cooperation in key spheres such as the law, health policy and demography, energy efficiency, transport infrastructure, as well as basic and further training. A number of projects have already been launched, for example the establishment of a German Science and Innovation Forum in Moscow, the founding of the Russian-German Energy Agency, the setting up of a logistics centre at St Petersburg State University or the construction of a paediatric oncology centre in Moscow. Legal cooperation was the priority area within the Modernization Partnership in 2011.works closely with Russia on a wide range of regional and global issues. We are keen, too, for it to be an active player in multilateral institutions (G8, OSCE, Council of Europe, NATO-Russia Council, EU-Russian cooperation, OECD, WTO).specific issues we may of course have different interests. However, the two countries are seeking to ensure the greatest possible degree of consultation and transparency.frank exchange on the human rights situation in Russia is part and parcel of the strategic partnership. Russia guarantees all human rights and civil liberties in its constitution and the President and Government regularly reaffirm their commitment to uphold human rights. However, there are shortcomings in the implementation of these legally anchored norms. Germany is therefore conducting a constructive dialogue with Russia with a view to strengthening human rights. As factors such as corruption or shortcomings in the sphere of the rule of law have had a negative influence on the human rights situation, the Modernization Partnership is also of key importance in this connection.consultationsis an intensive and confidential dialogue between the governments in which unresolved issues are discussed in a frank and constructive spirit. Intergovernmental consultations held alternately in Russia and Germany are an annual fixture. The most recent took place in Hanover in July 2011. The Foreign Ministers meet regularly both at bilateral level and in multinational fora.
.The role of economy in bilateral relations
economic sector plays a key role in bilateral relations. Germany is Russias number one partner in this field and Russia our leading energy supplier. Economic exchange and increasing economic ties not only serve to boost long-term growth in both countries but also contribute to stable political relations and promote technological progress. Looking ahead, it is up to Russian and German business to intensify cooperation still further. For Western investors interested in expanding their operations in Russia much will depend on how they see the country developing over the next few years, especially as regards legal certainty. Russia will be even more closely integrated into the global economy following its forthcoming accession to WTO.post of Coordinator of German-Russian Intersocietal Cooperation was created in 2003 to underline the importance of contacts between people in the two countries. Dr Andreas Schockenhoff, Member of the German Bundestag, has held this office since March 2006. His mission is to foster good and durable relations between people in Russia and Germany. By strengthening civil society, the Coordinators work also helps promote the development of democracy and the rule of law.engagement of civil society in both Russia and Germany is broad-based and is developing in a highly satisfactory way. For example, the number of local partnerships and friendships has risen to more than 160; exchanges among pupils and young people are also steadily increasing. The main focuses of the Coordinators work are, among others, cooperation with NGOs, links between civil society initiatives in Germany and Russia with one another and with official agencies, promotion of exchange, town twinnings and the dialogue at European level.plays a special role in economic relations between the two countries. Russia is Germanys leading energy supplier, and Germany has a great deal to offer Russia in the field of energy efficiency. If closer ties between the European and Russian economies are to be established, much will depend on how Russia develops over the next few years, especially as regards legal certainty and modernization of the economy. The German-Russian modernization partnership is dedicated not only to economic concerns but also to social issues and the rule of law.year 2011 saw some big increases in trade between Germany and Russia. Bilateral trade went up by 29% compared to the previous year (2010: 58.1 billion euros), while German exports to Russia rose by 31% and imports by 27%. This makes Germany Russias second-biggest trading partner in the world, next to China, and its most important within the EU. The volume of trade grew again between January and July 2012, with a 16% rise in German exports to Russia and an 8% increase in imports.now has full membership of the World Trade Organization, having ratified its decision to join in summer 2012. Membership of the WTO involves an obligation to comprehensively dismantle barriers to trade.mainly exports fuels (oil and gas) and raw materials (especially metals) to Germany. Conversely, German companies mainly export capital goods, machinery, vehicles, chemical products, electronic products and foodstuffs to Russia. Some 6500 German companies are currently active in Russia. German companies invested around 19 billion euros in the Russian Federation during the first half of 2012.key bilateral forum for discussing economic and financial issues is the Strategic Working Group, made up of representatives from government and industry. This working group, which last met in Moscow in November 2012, concentrates on specific cooperation projects in key areas of the two economies, such as aerospace, information and communications technology, financial services, construction, transport and infrastructure, car manufacturing, housing construction and health. The working group also addresses energy issues such as oil/gas, electricity, coal, renewable energy sources and energy efficiency.is one of the worlds largest energy producers and possesses more than 6% of global oil reserves, roughly 25% of global gas reserves and more than 19% of global coal reserves. According to BP figures, Russia is responsible for 19.6% of the worlds gas production and 12.4% of the worlds oil production. The EU is by far the most significant market for Russian energy exports. As Russias largest EU trading partner, Germany is also the largest market for Russian energy exports. With a nearly one-third share of industrial production, energy is the largest sector of the Russian economy. It generates about a quarter of GDP and half the countrys export volume. Through duties, taxes and tariffs it contributes a large share of federal revenues.companies are heavily involved in the energy sector in Russia. The Baltic Sea pipeline (Nord Stream) is a joint project being undertaken by Russian, Germany and other European businesses. The pipeline, which began operations in November 2011, has enabled a new supply route for transporting natural gas from Russian to Germany. It plays an important role in diversifying oil supply routes to Europe. There are plans to connect other countries to this pipeline as well.energy policy envisages considerable improvements in energy efficiency. There are several reasons for this. The Russian economy is very energy-intensive, with the industrial sector consuming comparatively high amounts of energy in proportion to what it produces. It is true that Russia, with emissions still far below 1990 levels, is still fulfilling its obligations under the Kyoto Protocol, which it ratified in 2004. Economic growth, however, could bring it up to the limits defined in the Protocol. Another good reason for Russia to enhance its energy efficiency is that using up less energy itself would leave it with new potential for export.means that German companies, renowned as world leaders in energy-saving technology, find themselves in demand in Russia. The Russian-German Energy Agency RuDEA, headquartered in Moscow, was launched in 2009 as part of the bilateral modernization partnership. RuDEA has the twofold aim of increasing energy efficiency in building renovation, industry, and the production and transportation of energy, as well as promoting the use of renewable energy sources.
.Regular meetings make for progress in cooperation: Visa facilitations, Trade relations, The German Russian Year
Russia Summits normally take place twice a year. The two sides last convened in St. Petersburg in June 2012. International issues of interest to both sides are discussed and new initiatives launched, such as the modernization partnership between the EU and Russia in 2010. This partnership is intended to strengthen cooperation on economic and infrastructure modernization projects, but also on rule of law, political and civil society questions. Coordinators on both sides prepare specific projects to this end, sometimes picking up on the experiences of individual member states - particularly Germany, which has had this kind of partnership with Russia since 2008 and has been extending it ever since.EU is also in regular dialogue with Russia on the difficult issues of human rights and the rule of law, conducting biannual EU-Russia human rights consultations. These cover topics such as freedom of opinion and assembly, freedom of the media, relevant pieces of draft legislation, human rights protection in connection with combating terrorism, torture and abuse, respect for the rule of law and the situation in the Northern Caucasus, as well as cooperation in UN bodies and in the Council of Europe, including the reform of the European Court of Human Rights. At Summits, too, we do not shy away from these sometimes controversial issues. It is the EUs conviction that progress can only be made through constant, constructive dialogue.Visa Facilitation Agreement and a Readmission Agreement have been in force between the EU and Russia since June 2007. These regulate matters such as exemptions from visa requirements or simplified procedures for visa applications by specific groups of persons from the Schengen States and Russia.the long term, both the EU and Russia are hoping to drop visa requirements altogether in order to further promote interpersonal contacts. At the end of 2011, the two sides agreed on a list of common steps to this end. These relate above all to immigration and security policy aspects. It is not yet possible to say when all the conditions for visa-free travel will be put into place by the two sides.EU is Russias most important trading partner by far. Roughly half of Russias entire volume of foreign trade is trade with the EU. Trade relations in the energy sector are especially important for both sides: about 20 percent of the EUs oil needs and around 45 percent of its gas requirements are met by Russia, and the trend is upwards. The EUs main exports to Russia are machinery and transport equipment, chemicals, agricultural products and textiles.that Russia has joined the WTO, we can expect trade relations between the EU and Russia to be given fresh impetus, not least because of the obligation to eliminate trade barriers. For a whole year, Germany and Russia are together hosting events under the slogan Germany and Russia - shaping the future together in the fields of culture, education, research, politics and business. Highlights planned for the end of the year include a festival in Berlin and a new exhibition in Dresden.the launch of the German‑Russian Year in June 2012, numerous projects have been carried out and documented.German‑Russian Year continues now with RusImport cultural events in Berlin, marking its halfway point. Moreover, December will see the opening of an exhibition in Dresden displaying important works of art from the Kremlin museums. In early October, the Neues Museum in Berlin opened the very popular exhibition Germans and Russians - 1000 Years of History, Art, and Culture.part of the German‑Russian Year 2012/13, visitors will have the opportunity to see the performances and works of several Russian artists for twelve days at the Haus der Berliner Festspiele. The RusImport festival will offer them an insight into the countrys many traditions and contradictions. Artists, film and theatre directors, musicians, authors and three generations of Russian performers will show the German public where Russia is heading. Furthermore, the festival will present modern art from Moscow and St Petersburg with contemporary pieces from a highly diverse art scene in which Germany and Berlin in particular have always had a keen interest.is the first large‑scale exhibition to show the historic depth and diversity of the links between Russians and Germans. Starting with the very first contacts and strong trade relations, it covers the Middle Ages and the period of close dynastic ties in the 18th and 19th centuries up to the deep ruptures in relations followed by successful new beginnings in the 20th century.will discover traces of Germany in Russian history and traces of Russia in German history. Some of the first‑class exhibits from important German and Russian museums and archives have never been on display and, together with works on loan from abroad, demonstrate the diversity and intensity of the links to date.project was developed by the Ministry of Culture of the Russian Federation, the State Historical Museum in Moscow and the Prussian Cultural Heritage Foundation under the auspices of the Museum of Pre‑ and Early History as part of the National Museums in Berlin. It is a central contribution to the Russia Year in Germany and the Germany Year in Russia 2012/13.
direction is one of diplomatic priority for Russia both from economical and political point of view. Closeness of social and political culture and common historical experience are necessary preconditions for future partnership. Geographical factors inevitably push politicians to negotiate common issues and Europe with Turkey but without Russia seems nonsense for many Europeans and Russians. But since the beginning of 2000-is the hard partnership of Russia and EU has given place to the prolonged systematic crisis with no evidences of improvement.leaders are trumpeting the successful development in economic cooperation with Germany: «The building of common economic space between Russia and EU is now in a stage of practical realization. It should be noticed that stimulation of business activity in Europe depends from the Russian-German co-operation».today Germany is trade partner number one for Russian economy (its share in Russian external trade is round 10%). But for Germany Russia is not a prior external trade partner even in East Europe, it stands after Poland and Check Republic. Russian share in external trade of Germany could be compared with share of Africa without SAR (2,5%). In spite of trade growth in 2000-s two countries now are far from the level that existed between USSR and two Germanys during the Cold War. In a sphere of direct investments the situation is even worse: Russias share is less than 1% from all German investments abroad. Political statements stressing that Germany is interested in deepening of economic cooperation do not lead to providing the most favored nation treatment for Russian companies. For example, the negotiations about Russias moving from fifth to forth group according to OECD scale have being conducted since mid 1990-is and depended a lot of the support of Germany, but positive decision was taken only in 2003. Also structure of commodity circulation with Germany looks not so favorable for Russia: 92% of Russian export represent raw materials, large part of import from Germany are (round 70%) plants and equipment.German firms are vitally interested in the growing Russian home market (population of Russia is still by 50 prevails that of Germany) which could also provide competitive advantages on markets of Central Asia, Belarus and Ukraine. The other link is huge Russian debts to Germany that do produce an impact on the German economy (positive like in 2005 when Russia has settled debt commitments to the Paris Club ahead of schedule or negative).important connecting link between two countries is energy dialogue. Today more than 30% of German total demand for oil and gas are covered by supplies from Russia.with other regions - suppliers of gas and oil Russia seems to be more stable and predictable partner. Meanwhile German companies are interested not only in getting energy resources but also in participation in their mining on Russians territory. Within the multilateral consortium German and Russian companies are planning to cooperate in modernization of gas transportation system in Ukraine (if Ukrainians wouldnt strongly oppose it). German firms are also ready to develop bilateral cooperation in the sphere of electric power station building (that creates some opportunities to use Russian scientific resources).agreement about North European Gas Pipeline signed by Gazprom, E.ON and BASF in the end of September 2005 was a real political event for both countries. Through this agreement Germany will guarantee provision of 10 percent of its overall energy supply. The document was appreciated as the cornerstone of so called energy alliance between two countries. The gas pipeline will have a length of 1,200 kilometers and will follow a route along the Baltic Sea bed from Vyborg to Greifswald on the German coast with branches running to Sweden, Finland and Russias Kaliningrad Region. Of course Germany will not only ensure reliable energy supplies for itself, but will become the main distributor of Russian gas throughout EU. The same time Joint Declaration on Energy Cooperation between Russia and Germany was signed by two governments chefs.
The German Chancellor has made this step knowing about the contradictory interests of his eastern neighbours. Polish media even called the NEG Putin-Schröder pact hinted at Molotov-Ribbentrop agreement in 1939., actually the two economies are the complement of one another, and closer economic cooperation produce benefits for both sides. Meanwhile officials from both sides agree that present level of bilateral trade does not correspond to real economic potential of two countries. Some years ago there were initiated talks to activate investment activity, industrial cooperation especially in the fields of high technological production but all these projects are only plans for future., we can say that German interests actually play a role of driving force for RussianEU relations only in the energy sphere. Without the personal efforts of Chancellor G.Schröder energy dialogue remained posed in mid-air, because the European bureaucracy hasnt ever welcomed or encouraged such development. Having in mind that NEGagreement is obviously beneficial for stable economic development not only of Germany, but of all European countries we suppose that Germany is trying to get European goals by pragmatic and subsequent politics towards Russia.
In 2005 G.Schröder has declared "All that has brought immeasurable sufferings to millions people - totalitarian ideology, nationalism and pretending of one people to dominate above the neighbours - should not occur never again. The Creation of European Union provides one answer to historical errors. Other answer is the strategic partnership with Russia. And I cannot see an alternative either to first or to second17. But this phrase now is nothing more than the exaggeration.have to remind that Germany has ever been and remains one of the initiators and accelerators of European integration. It always stood for deepening of integration and geographical enlargement. Unlike their French partners Germans had not ever oppose the strengthening of supranational element. Together with the fact that in the post-war Europe the only way for Germany to guarantee national security was self-restriction the integration enabled the country to get rid of the status of the conquered state, and also to establish political relations with its neighbours. After falling the wall and Reunification country was the first to support the enlargement. Among European initiatives of Germany one can recall an idea of the European currency system, the European central bank etc. For such initiatives Germany was widely accused of "running ahead". Strangely enough, Reunification did not cause changes in the German European politics, it remained the most consecutive and effective. Though, apparently, having reached the national sovereignty, the country might have been uneasy to go at once on its reduction., there are no doubts that the development of European Union is the real strategic goal of German leaders. And relations with Russia could have only secondary priority in this connection.Russian-German relations could not improve Russian-EU interaction, because the idea of Europe is more precious for Germans and whatever they do they do it for Europe and within its limits. Only the improvement of Russia-EU relations could form real strategic partnership with Germany.
Conclusion
strategic partnership of Russia and Germany is no more than diplomatic rhetoric. It does not exist in reality. The word-combination is used to fulfill the vacuum of any subsequent concept about goals of bilateral relations. The main reasons of such situation proceed as follows., both Germany and Russia do not have a clear long-term strategy in world affairs and are quite uncertain now about their future. The same refers to perspectives of Russia-European relations., European direction would be always a priority of German politics as it has been a motor of European integration. More likely it plays a role of effective manager acting on behalf of collective interests. As the goal is to provide prosperity and development of the EU the constructive and realistic relations with Russia are more likely to be an instrument while achieving these purposes., German vital interests could be achieved sooner on the basis of European institutes. They represent to some extend the instruments of German foreign politics, which has extraordinary pragmatic character. Germany would act always based on the political weight of EU.such point of view cooperation with Russia seems to be only a promotion of domestic policy by other means. The role of Russians friend in EU is considered to be no more than tactic, the instrument but not the goal. Geographic factors lead to more close relations with Russia, but the main directions are the same as the directions of EU as a unity. There is only one difference between European and German politics eastwards. Germany is acting effectively and sometimes even aggressively where the other member of EU are still deliberating and talking. It operates as the engine of the Union providing benefits for other members., to intensify the cooperation with Germany Russia should first build constructive and long-term relations with the EU. Otherwise the potential of bilateral cooperation would be exhausted in nearest future. And the main task of both parties is to decide the question over the future place of Russia inside Europe dominated by EU.
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