Last updated in October 2017
Russia’s annexation of Crimea in contravention of international law and its actions in eastern Ukraine overshadow German-Russian relations as well as Russia’s relations with the European Union and other Western partners. In response to Russia’s actions, the EU has imposed incremental sanctions on the country (asset freezes and travel bans on individuals and companies as well as sectoral economic and financial sanctions). On the initiative of Germany, the EU tightened sanctions further in early August 2017 after four gas turbines were transported to Crimea in breach of contract with Siemens. At the same time, the German Government has repeatedly made it clear that the door to a dialogue with Russia remains open and that it actively and emphatically supports efforts to resolve the conflict in eastern Ukraine. Germany and France in particular have, at the most senior level in the form of the Normandy format, pressed for observance of the September 2014 Minsk agreements. At a summit attended by Germany, France, Russia and Ukraine in Minsk on 12 February 2015, a package of measures for the implementation of the Minsk agreements was adopted.
As a result of the low price of oil, its insufficiently diverse economy and the effect of Western economic sanctions, Russia has faced an economic crisis in recent years to which it has responded with a policy of localisation and import substitutions. The renewed increase in oil prices since autumn 2016 has lessened Russia’s economic downturn and the Russian economy is forecast to grow slightly in 2017.
Bilateral trade between the two countries declined by approximately 40 percent between 2013 and 2016. As a result of the economic crisis, German exports to Russia dropped by 26 percent in 2015 compared with the previous year to 21.8 billion euros. In the first six months of 2017, the volume of bilateral trade increased by approximately 30 percent compared with the same period in 2016. Russia’s main exports to Germany are raw materials, in particular oil and natural gas, as well as metal goods and petrochemical products. Germany’s main exports to Russia are mechanical engineering products, motor vehicles and vehicle parts, chemical products, food and agricultural produce.
Despite the crisis, some 5200 companies with German capital investment have stayed in Russia and are preparing for the economy to pick up again. The relatively weak rouble and drops in wage costs are currently helping to make the Russian market more attractive. Many companies have remained in the hope of recouping the losses they made due to the crisis. Since 2016, there have been signs of a slight upturn in German-Russian trade relations. German direct investment in Russia is expected to show a positive balance in 2017. Many regions in Russia, for example the Republic of Tatarstan and the Kaluga Region, are actively seeking to attract foreign investment. Incentives are being offered, ranging from the creation of industrial parks and special economic zones to the provision of land, buildings, transport infrastructure and connections to customs and tax concessions and cutting red tape. German companies are concerned about the political climate in Russia, the country’s economic development and protectionist tendencies that continue despite Russia’s accession to the World Trade Organization and that, given Russia’s localisation policy, negatively influence foreign companies.
Quite apart from this, doing business in Russia requires circumspection and careful consultation on account of the country’s many idiosyncrasies. Customs clearance, certification and administrative procedures often still prove difficult.
Culture and education
There is a lively exchange between Germany and Russia in the cultural and education sectors. Following the bilateral German-Russian Year of Education, Science and Innovation 2011/2012, the Year of Germany in Russia/Year of Russia in Germany 2012/2013 and the crossover years of language and literature featuring numerous events in both countries in 2014 and 2015, the German-Russian Youth Exchange Year was held in 2016 and 2017. This led to a further intensification of exchange between the two countries at the level of civil society. Finally, a joint German‑Russian Year of Municipal and Regional Partnerships 2017/2018 was officially launched in June 2017 at the fourteenth town-twinning conference, held in the Russian city of Krasnodar. Its mission is to increase public awareness of the municipal and regional partnerships between the two countries, using the momentum generated by such bilateral cooperation to promote further partnerships between Germans and Russians – with the ultimate aim of building mutual trust.
With some 1.5 million learners, 1.1 million of them school pupils, German occupies an undisputed second place in foreign language teaching in Russia, after English. There are approximately 1000 school partnerships between German and Russian schools. As part of the Schools: Partners for the Future initiative (PASCH), more than 100 schools receive targeted support to build and develop their German teaching. Here, there is close cooperation between the Central Agency for Schools Abroad (ZfA) and the Goethe-Institut.
The Goethe-Institut, which has three branch offices in Russia (in Moscow, St Petersburg and Nowosibirsk), organises a wide spectrum of cultural events and offers a comprehensive range of language courses, while also maintaining an extensive network of partners in Russia’s provinces. The Central Agency for Schools Abroad (ZfA) has four German language advisers and more than 40 seconded teachers in Russia.
There are currently some 900 partnerships between higher education institutions in the two countries. In the past year alone, there were more than 15,000 Russians studying in Germany, nearly one in ten of them on a German Academic Exchange Service (DAAD) scholarship. The DAAD has a branch office in Moscow and Information Centres in St Petersburg, Nowosibirsk and Kazan. Each year, up to 2000 German DAAD scholarship holders gain experience at universities and research institutions in Russia. There are 37 DAAD lectors working at various Russian universities.
The German-Russian Institute of Advanced Technology was opened at the Kazan National Research Technological University in September 2014. At this institute, Russian engineering students are taught according to German standards. The first students graduated from the institute in summer 2016.
The German Government strongly supports efforts to step up school and youth exchange with Russia. To this end, in 2006 it launched the Hamburg-based German-Russian Youth Exchange Foundation together with other partners. Each year, some 17,000 young people participate in its projects. The annual highlight is the German-Russian Youth Parliament, which met most recently in November 2016 at the Federal Foreign Office.
The German Government promotes efforts to preserve the cultural identity of the German minority in Russia (numbering approximately 400,000 to 600,000). The work includes language and education as well as social, community-support and other cultural projects.
This text is intended as a source of basic information. It is regularly updated. No liability can be accepted for the accuracy or completeness of its contents.