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Positions of the German Economy
- The Committee on Eastern European Economic Relations regards the modernization of the Russian economy as a joint German-Russian challenge and therefore advocates a close modernization partnership. In addition to modernization, the prerequisites for sustainable growth that is independent of the world market price for energy sources are diversification of the Russian economy, extension of the value chains in Russia and promotion of a broad-based middle class. To achieve this, Russia needs more investment, including from foreign companies. Prerequisites for this are liberalization and greater privatization of the Russian economy and the implementation of international safety and environmental standards to promote the transfer of research and technology.
- Russia is part of Europe. German business supports Russia’s integration into Western structures. A new Partnership and Cooperation Agreement (PCA) between Russia and the EU would put relations between the two regions on a broader footing. With regard to the EU’s “Eastern Partnership” with six countries bordering Russia, German business advocates opening up the program and involving Russia more closely. German business is also expressly in favor of abolishing the mutual visa requirement between the EU and Russia and reforming the strict registration regulations in Russia.
WTO accession will accelerate Russia’s integration into the world economy and create the preconditions for the establishment of a free trade area with the EU. The alignment with international standards and norms associated with WTO accession will facilitate market access and attract additional investment to Russia. Protectio¬nistic tendencies, such as raising tariffs on automobiles and agricultural machinery, are an obstacle to Russia’s integration into the world market.
- In order to place energy relations between the EU and Russia on a more reliable footing, the realization of the Nord Stream pipeline is of great importance. In addition, German business is calling for a trilateral dialog between Russia, the EU and transit countries. At the political level, an Umbrella Agreement between Russia, the transit countries (and here in particular Ukraine) and the EU should be concluded as soon as possible in order to improve the legal framework for private-sector transit and supply contracts.
- According to a survey conducted by the Committee on Eastern European Economic Relations in November 2010, German companies in Russia see a need for reform in the reduction of bureaucracy and corruption, the acceleration of customs procedures and the promotion of small and medium-sized enterprises. German business welcomes the fact that President Medvedev has declared the establishment of a functioning legal system to be one of the main goals of his term in office.
German business has a great interest in further expanding the strategic partnership with Russia. With the Strategic Working Group on Economics and Finance, there is a well-functioning bilateral body that initiates and accompanies projects. The Skolkovo Innovation City project initiated by President Medvedev should be actively supported by German business. Other lighthouse projects for the German-Russian modernization partnership include the planned privatization of Russian state-owned companies and the modernization of the Russian healthcare industry.
- There are also very good conditions for cooperation to increase energy efficiency, develop renewable energies and improve climate protection in Russia. Energy efficiency in Russia is to be increased by 40 percent by 2020. Germany is the world market leader in green technologies. By applying state-of-the-art technology domestically, Russia is gaining new resources for exporting raw materials. Pilot projects such as the joint Russian-German energy agency RuDea and the “Energy Efficient City” project in Ekaterinburg can send a signal to other cities and regions.
- The Committee on Eastern European Economic Relations also sees great joint opportunities in the agricultural sector: With 120 million hectares, Russia has a nine percent share of the world’s arable land (with only two percent of the world’s population). Russia can make an outstanding contribution to feeding the world. In order to meet this demand, cooperation with German producers to modernize Russian agriculture and to train and educate personnel could be further intensified. Russia has considerable potential in bioenergy due to its forest wealth and large agricultural areas, which can be jointly developed.
- The Committee on Eastern European Economic Relations welcomes the increasing interest of Russian companies in the German market. When we speak of strategic partnership, there should be no one-way street when it comes to trade and investment. It is clear that companies must take into account the rules of the game in the other country. This applies just as much to German companies in Russia as it does to Russian companies in Germany.