Interview With German Ambassador to Russia

Photo by Nikita Markov

Rüdiger von Fritsch

"Investment capital is like a skittish deer"

Rüdiger von Fritsch, Ambassador Extraordinary and Plenipotentiary of the Federal Republic of Germany in the Russian Federation, says that the relationship between Russia and Germany is being tested, but the countries have no choice but to cooperate.

You assumed the post of ambassador during a difficult time. Some businessmen seemed to be in an absolute panic when Russia annexed Crimea last year. Has the mood changed in the time since?

Many German companies remain on the Russian market, even in such a difficult time as this. Obviously, a long period of economic difficulty is especially hard on small and medium-sized businesses, and as you know, they make up the majority of firms in Germany. German companies participate in approximately 6,000 Russian businesses and have invested a cumulative total upwards of 20 billion euros in this country. They are prepared to remain in this market, but they are also extremely anxious and concerned about the current investment climate in Russia.

What exactly is the cause of that concern?

Since I am not a market player myself, I can only relate what I have heard from several German businessmen. German firms with an interest in the investment market are concerned about Russian legislation. At the moment, they are critical of the legal conditions for the localization of production. In my view, these terms and conditions are more likely to deter than contribute to investment.

German businesspeople also complain about the law on personal data that came into force on Sept. 1 and which remains unclear on many points. This contributes to the feeling of uncertainty, and a lack of confidence in a time of economic instability only creates additional difficulties.

Nevertheless, I would like to underscore the very close economic ties between Russian and German firms, some of which have been working on the Russian market for a very long time. For example, I recently attended a presentation at ThyssenKrupp, a company that entered the Russian market in 1818. Such well-known firms as Bosch and Siemens have been working for many years on the Russian market, but new projects are also taking shape. I was recently in Kaluga where Volkswagen launched a production facility for automotive engines. Gildemeister will soon begin manufacturing industrial machinery in Russia. Also, Claas will open a plant in Krasnodar for the assembly of agricultural equipment.

In fact, the case with Claas is an example of a German company that was making large-scale investments and starting construction when Russia suddenly introduced legislation that brought changes favoring other companies and putting Claas at a disadvantage. That situation required significant intervention on our part. Information about such situations spreads throughout the market very quickly, and investment capital is like a skittish deer: it becomes frightened by the slightest uncertainty. It is in part for this reason that we now see that the desire to invest in Russia is not as great as it was before.

What are German companies saying about the sanctions? Take machine building, one of the main areas of bilateral trade. The decline in the volume of German machine tools and machinery is clear.

I just want to explain that sanctions are a necessary response to what we believe are extremely problematic policies here. It is important to remember that this political tool is not a punishment. This means that they were introduced for certain reasons, and the conditions under which the sanctions can be lifted are also clearly understood. It is a very transparent measure that was very thoroughly considered, weighed and thought out beforehand.

It affects only a very narrow segment of specific products and goods — for example, some, but not all, machines and equipment. Sanctions affect the financial sector, but in conversations with German businesspeople and Russian specialists, all agree on one thing: other factors exert a much greater influence on businesses now. These include the dynamics of commodity prices, the Russian economy's overall dependence on commodities and structural problems.

The first German Visa and Service Center opened 18 months ago. How has the situation with visas improved?

Sometimes you can be happy that nothing is happening. Since I became ambassador to Russia, I have not received a single visa-related complaint from either German or Russian companies. Of course, that does not mean there are no problems at all in this area, but we have successfully resolved all of the technical challenges that were facing us earlier. There are now 18 German Visa and Service Centers operating in Russia and more than 50 visa centers for the Schengen countries. The Visa and Service Center on Shabolovka Street has a special window for members of the Russian-German Chamber of Commerce. The situation is developing positively.

A new requirement to record biometric data recently came into force. That presents some technical challenges, but I am sure we can cope with them.

Germany issued 430,000 visas in Russia last year, including 265,000 in Moscow and 170,000 at the Consulates General in St. Petersburg, Kaliningrad, Novosibirsk and Yekaterinburg. The number of visas issued has declined compared to previous years. This was affected by the overall economic situation. The devaluation of the ruble led to higher prices for trips abroad, making people less likely to travel.

Apart from Crimea and Ukraine, which difficulties continue to affect Russian-German political relations?

The two major issues of the utmost importance to us now are the annexation of Crimea and the protracted conflict in eastern Ukraine. It is crucial to understand that our relations extend far beyond that conflict: they are multifaceted, full of tradition, intertwined and have deep roots. Those relations have a bright future, and that is also important. All of this means that we face an important task today — to resolve as soon as possible the conflict that has victimized Ukraine.  

At the same time, we need to remember that our goal is to build positive European-Russian relations. I actually try to avoid that expression because Russia is a part of Europe. So let's say that the goal is to build a stable relationship between Russia and Western Europe and Germany. We have no alternative but to develop good relations.

Can you list any specific projects of bilateral cooperation?

We have many mutual and bilateral interests. Consider the migration problems — my country is now experiencing particular difficulties in this regard. We must work together to understand the roots of the conflict and to eliminate its causes. Russia also has an important international responsibility and, as a member of the UN Security Council, it should contribute to the solution of international conflicts, whether in Iraq or Syria. Or take, for example, the challenge of radical extremist Islamist terrorism — it is our common challenge and we have the opportunity to resolve this problem together.

Another common point is globalization. There is no need to look at globalization as something negative. Thanks to that process, a great deal has been achieved: people have risen out of poverty and countries have increased their competitiveness. Many have already benefited from this process. It is on these issues that Germany and Russia, Russia and the EU can take advantage of the chance to build a successful collaboration.  

An enormous number of migrants are pouring into Germany and all of Europe now. Can Russia help in this matter, and are the two countries already interacting in some way?

This year we expect to take in 1 million refugees — an unprecedented number. Germany, as a state, is based on humanitarian principles and offers refuge to people who are fleeing terror, war and violence. Let it be only temporary refuge in some cases. After all, many people would like to ultimately return to their own countries and rebuild their homes. At the same time, it is important to reach a common European solution to this problem.

As for Russia's participation in this issue, we need to first determine the causes of the conflict in Syria and together address the reasons why people are fleeing their country. Here we can take differing actions while bearing in mind our joint foreign policy interests. For example, we are especially concerned that many Syrian refugees are coming from regions under the control of the government. These are not people trying to escape the terrible conditions created by the Islamic State, but people escaping the terrible conditions created by the Syrian government and that are directed against its own population. These are the issues where we can work together to find some sort of solution, and we must find one urgently. The politicians of both our countries are now actively discussing these matters.

What are the expectations for the meeting to be held in October regarding the situation in Ukraine?

Russia, together with Ukraine, France and Germany are partners [in this discussion]. As partners, we have to work together to reach a common solution. Germany has always insisted on reacting immediately and strongly to all violations of international norms. But on the other hand, we insist on maintaining a dialogue when it is clear that armed conflict will have no beneficial result. It is not so simple to keep a dialogue open in the face of constant armed confrontation. However, I would like to point out that we have managed to fulfill the Minsk agreement to a certain extent and to achieve a cessation of hostilities in eastern Ukraine.

Much remains to be discussed in more detail on this issue. But the conflict is not going anywhere. Everyone involved must contribute to ending it. France and Germany should always accompany and support them, and most importantly, promote dialogue. The greatest concern at the moment is that the separatists have decided to hold elections, despite the Minsk agreement.

This year Germany celebrates the 25th anniversary of reunification. What would you say is the greatest achievement in relations with Russia during that time?

The 25th anniversary of German reunification shows that the joint history of our two countries can be successful. I think it sends a positive message. The Soviet Union and Mikhail Gorbachev made an enormous contribution to the unification of the two Germanys and we will always remember that. We have substantially expanded our relationship in various fields since then. It is safe to say that Germany has always attached particular importance to relations with Russia, and Russia's relations with Western Europe — whether it was the signing of the Charter of Paris (1990) or the Founding Act between Russia and NATO (1997). That, by the way, is the only security agreement between NATO and a non-alliance member state. We have mapped out and begun implementing numerous economic initiatives, and we formed a partnership for modernization in 2008. We have tried to implement as many initiatives as possible during these 25 years, and have succeeded with many.

Now our relationship is undergoing a durability test. In this context I would like to recall another milestone: 60 years ago, [former Chancellor] Konrad Adenauer held difficult negotiations with the Soviet side and reached an agreement on the repatriation of the last 10,000 German prisoners of war and civilian internees. That marked the establishment of diplomatic relations between West Germany and the Soviet Union. And looking at those 60 years of partnership, we find even more successful examples.

Russia - Germany 2015
Russia - Germany 2015
Despite the difficult political climate and economic downturn, German companies remain committed to Russia. Read about the challenges facing them, as well as success stories in this supplement.
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