Hundreds of German companies want to continue doing business in Russia despite the increasingly stringent Western sanctions in the wake of Moscow’s war against Ukraine, according to a survey.
“Only 4% of German companies plan to exit the market,” the chairman of the German-Russian Chamber of Commerce, Matthias Schepp, said, referring to a new survey on the business climate in Russia published on Thursday.
Many feared losing a lot of money if they left: “Anyone who is still here in Russia after four years of bloodshed and sanctions wants to hold out,” Schepp told dpa in Moscow regarding the survey of around 260 entrepreneurs.
He expressed continued appreciation for the significance of the Russian market.
According to estimates, about 2 000 German companies are still active in the world’s largest country by area.
The chamber estimates German assets in Russia to be worth more than €100-billion (R2.3-trillion).
“German assets are even growing because Russian laws prevent profits from being transferred on a larger scale,” said Schepp.
He advocated for their protection, opposing the transfer of these assets to the Russian state budget or Kremlin-affiliated magnates.
According to Euronews, German companies have paid nearly $2-billion (R39-billion) in taxes to Russia since the Ukraine invasion, funding the war effort.
The taxes paid to the Kremlin since Russia’s invasion of Ukraine are enough to fund 10 000 attack drones targeting Ukrainian cities, yet more than half of German firms that operated in Russia before the all-out war remain there today, according to a new report.
EU regulations are not violated
Legally, some 250 German companies still active in Russia are doing nothing wrong.
Many of these firms, such as the cheese manufacturer Hochland and the gypsum producer Knauf, which produce fast-moving consumer goods, generally comply with EU regulations.
The Euronews report continued that German firms are the second-largest taxpayers to the Kremlin’s coffers, after US companies.
In 2024, US-based businesses paid €1-billion in profit taxes to the Kremlin, while German firms spent $594-million, according to the KSE report co-authored with B4Ukraine and the Squeezing Putin Initiative.
The dpa stated that overall, the business climate in Russia and the expectations of German companies have noticeably deteriorated. More than half of the companies expect the economy in Russia to shrink this year.
There is a threat of further tightened sanctions if the war does not end.
In the survey seen by dpa, more than half of the German companies view the punitive measures as causing “strong or very strong damage” to the Russian economy, unlike the Kremlin, explained Schepp.
“However, 49% of the German companies active in Russia also believe that the sanctions harm Germany more than Russia,” he added.
Resilience of Russian economy
From Schepp’s perspective, German and European politicians underestimate the “resilience of the Russian economy” faced with the sanctions.
“Lack of information leads to miscalculations about the actual situation in Russia—and this in matters of war and peace,” said Schepp.
“Wishful thinking and, in part, denial of reality regularly lead to underestimating the endurance of the Russian population.
“In the economic war that accompanies the bloodshed in Ukraine, it is a very ambitious bet when European politicians rely on more sanctions and economic pressure to force Russia to the negotiating table and to make concessions.”
According to the survey, growth is expected primarily in the areas of information technology and telecommunications, pharmaceuticals and health care, and agriculture and the food industry.
With 750 members, the German-Russian Chamber of Commerce is, by its account, the largest foreign business association in Russia.
