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Sanctions on Russia impeding economic relations

Sanctions by U.S. and EU hitting Hamburg's firms; Chamber of Commerce survey finds

The majority of Hamburg-based companies expect their business with Russia to stagnate over the next twelve months, a survey by Chamber of Commerce survey has found. More than one in two companies with business links to Russia anticipate development (56 per cent) while more than one in four even expect a decline (26 per cent). At present, 60 per cent of the companies surveyed spoke of a “good” or “satisfactory” business situation. However, the exchange rate of the ruble, sanctions and the current economic situation in Russia in particular is likely to make business with Russian partners more difficult in the near future.

Sanctions impacting German companies

Almost half (43 per cent) of all companies with connections to Russia are suffering from the sanctions imposed by the EU in 2014, whereas only 12 per cent feel the Russian sanctions on Europe. The present U.S. sanctions are also having an extraterritorial effect and are hitting German companies. About a quarter (26 per cent) of the companies surveyed expect concrete impacts in future while 6 per cent are already affected. Three quarters of the companies surveyed see a stronger orientation of Russian companies towards Asia as a result of the sanctions policy – a rise of 20 percentage points over the last Russia survey in June 2015.

Restraint in future

The companies surveyed also expect restraint in future business relations with Russia, increasing protectionism there and a loss of trust between business partners in both countries. Speaking after a visit to St. Petersburg, Christi Degen, Managing Director of the Chamber of Commerce, remarked: “The sanctions make economic relations with Russia more difficult for Hamburg-based companies. If Russian companies are orienting themselves towards Asia, business with Europe will suffer. Nevertheless, many Hamburg-based companies are maintaining their positions in Russia and trying to adapt to the changed conditions.” The sheer size of the Russian market and the good economic relations, which have grown over time, are the most important reasons for staying in the region, according to the surveyed companies.

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