Verfasst von: Dr. Who | 16.4.14

806 | Who really runs the world

European economic giants tied to Russia by financial obligations, condemn sanctionsPhoto: RIA

Washington’s pressure on Russia with threats of sanctions comes from its desire to bring down the price for gas supplied to Ukraine and to weaken Moscow’s well-rooted position. However, today it is not the politics, but the economic that drive everything. Western companies are unhappy with the appeals to introduce sanctions against Russia. German concerns have already refused to take out their assets from Russia. Who can follow their example taking into account that Russia’s economic cooperation with the West is growing? For example, Russia’s export of gas to Great Britain has increased by 40%. Who will be the winner in that battle – the politicians or the corporations? Are they really prepared to show who really runs the world?

Threats are pronounced from the European tribunes, but Europe is tied to Russia by a great number of financial obligations and commercial interests valued at hundreds of billions of USD. Europe won’t be able to break those ties, thinks Dmitry Abzalov, president of the Center for Strategic Communications.

"The Russian market is one of the largest and one of the most dynamically growing markets in Europe. The European players who are primarily represented by the Italian, German, French and Dutch companies don’t want to leave the Russian market. The military contracts with France alone represent a serious volume and it is clear that Europe has nobody else to sign such military contracts with other than the Russian Federation. China successfully buys weapons from Russia, India – from the Russian Federation and the USA. Obviously, Europe has to come to terms. In addition, there are companies that work in the machine building industry. That includes Volkswagen, the entire German auto manufacturing, the high technology equipment manufacturers starting with Siemens and Philips, ENI, Gaz de France in the energy sector – a great number of European companies are present on the Russian market. Nobody wants to put on hold important business lines of activity due to the political conflicts. Especially given that the majority of the population of those countries do not support the confrontation with the Russian Federation, especially in the Ukrainian issue".

The large players are not interested in having the relations with Russia seriously deteriorated, the expert believes. Russia provides up to 30% of the EU’s energy sources. And Europe is not interested in having Russia turn east. As in that case Europe and the USA would get a very powerful energy sector block. In addition, for a number of countries gas from Russia is the only source. The entire Eastern Europe uses that gas. The share of Russian gas there is up to 60-90% with some exceptions, recalls Dmitry Abzalov.

"Despite all the statements, no serious sanctions have in fact reached Russian Federation. To bring the gas prices down would be a political suicide at this time, it is impossible to do with the present financial model. Thus, the EU will act very carefully here. I believe that after a certain political crisis of the information reaction the economic relations will become smoother".

The situation will remain most complicated until the presidential elections in Ukraine, thinks Dmitry Abzalov. Then the intensity will decrease.

"Now Washington is trying to put on pressure. As experience shows, it is possible, but it does not work at long distances. Georgia’s experience showed that clearly. In the near term, a month before the presidential elections the situation will be fairly difficult. But then later no serious economic penalties or God forbid paralyzing sanctions against the Russian Federation will be introduced".

It is no less important that Europe’s society shares the position of the European business. Politicians also not always think the way they speak, says Dmitry Abzalov recalling Angela Merkel’s role in the development of the Russian-European relations.

"One must point out that there is also such thing as one’s civic stand. Corporations have hard time standing up against something. In addition, despite Merkel’s harsh statements she was one of the initiators of the North Stream and the South Stream projects; she pushed them through the European Commission. Thus, one can say that currently business acts as a partner of the Russian Federation with a serious political resource. In addition, these processes have the support of the society".

Business issues are closely intertwined with politics. Such cases as partial limits on the servicing of two Russian banks by Visa and MasterCard confirm that even under the political pressure the reaction of the business cannot be significant. Thus, political slogans will have their role, while the reality will stay the same.

Read more: http://voiceofrussia.com/2014_04_16/European-economic-giants-tied-to-Russia-by-financial-obligations-condemn-sanctions-5091/

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