Учебная работа. Bilateral economic diplomacy between Germany and Russia

Bilateral economic diplomacy between Germany and Russia

Ministry of Foreign Affairs of the Republic of Uzbekistanof World Economy and Diplomacy

Applied Diplomacy Department

Economic security and diplomacy object

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



. 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.



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 direction is one of diplomatic priority for Russia both from economical and political 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.


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 References

1Speech of Russian President V.Putin on the meeting with German Business Communities. Saint-Petersburg, 25 June 2005

2Speech of German Chancellor G.Schröder on the opening of Hannovers Industrial Fair.

Hannover, 10 April, 2005

3Suslov D. Russia-EU: No More Concessions? \ Russia Profile.7.10.2005

4Malzahn C.C. Taking Stock of Gerhard Schröder \ Spiegel-on-line. 14.10.2005

5Rar A. Deep crisis of partnership. Nezavisimaya Gazeta. 26.09.2005

6Internazionale Politik. 2002. №4

7Press-conference after the meeting of Russian President V.Putin with Federal Chancellor ofG. Schroeder and French President J.Shiraque in Kaliningrad, 3.07.2005

8World Competitiveness Yearbook, 2002

9Schelgen G. Fear of Power. Germans and their Foreign Policy. 1994. P.10

10Internazionale Politik. 2000. №4

11Guskowa Е. Armed conflicts on former Yugoslavian territory (Events Chronicle) (in Russian). 1998. P.55

12Vorobjewa L. Foreign Policy of Germany on the stage пороге of 21 century (In Russian), 2002.

13Papcke S. Zur Neuorientirung deutscher Aussenpolitik \ Aus Politik und Zeitgeschichte. Band 1298, 13.03.98. S.5

Kommandeur im Kosovo. Frankfurt am Main, 2001

15Ash T.G. Im Namen Europas. Muenchen, 1993. S.523

16Die Zeit. 10.04.2001

17The interview of Russian President V.Putin and Federal Chancellor of BRD G.Schröder // Bild. 6.05.2005

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Учебная работа. Bilateral economic diplomacy between Germany and Russia