German businesses were badly affected by the Russia-Ukraine war

, German businesses were badly affected by the Russia-Ukraine war

Many German businesses are in trouble and suffer great damage after news of Russia’s invasion of Ukraine

As the largest business country in Russia in the EU, Germany could be the top loser in the bloc and many businesses are in a dilemma.

When Peter Fenkl heard about the Russian invasion of Ukraine, his first thought was not what it would be like in business, but rather the fate of his employees, whom he viewed most of all. peers.

“These were not just business relationships, but real friendships. We sat next to each other in meetings, drank beer together,” said Fenkl, CEO of industrial fan manufacturer Ziehl-Abegg. 4,300 employees, said.

Now, all four employees of the company in Ukraine have taken up arms to defend their country. In Russia, where he has a production facility with 30 employees, business is halting. “Twice I called my colleague in Russia and he couldn’t talk. He kept crying,” he said.

Peter Fenkl, CEO Ziehl-Abegg. Ảnh: APPeter Fenkl, CEO Ziehl-Abegg. Ảnh: AP

Peter Fenkl, CEO Ziehl-Abegg. Ảnh: AP

German companies do more business in Russia than in any other European Union country. Last year, it exported more than 26 billion euros ($28.4 billion) worth of goods last year and invested another 25 billion euros in Russia.

Russia’s annexation of Crimea in 2014 and subsequent sanctions reduced the number of German companies investing in Russia by a third. However, this number is just under 4,000 companies in 2020, as many believe their presence can help Russia develop more. On February 24, that trust was shattered, leaving companies of all sizes wondering what to do next.

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While some have announced their decision to withdraw, others are trying to move on, despite Western sanctions that have hampered banking, cross-border transport, and caused the ruble to depreciate. . What remains with many businesses is a feeling of deep disillusionment and sadness.

Germany’s top automakers – BMW, Volkswagen, Mercedes-Benz, and Daimler Truck – all announced last week they would stop exporting and producing in Russia. Family-owned companies, including ZF Group, a car parts maker, and Haniel, which manages several independent businesses, are doing the same.

The German Eastern Business Association, a group of companies that has for decades promoted deeper economic ties with Moscow, will celebrate its 70th anniversary this year. Several members of the association were previously scheduled to meet with the Russian president last week. The trip was canceled after the Ukraine incident.

“For now, the subject of sanctions and their consequences is less than the question of whether we will have important economic relations with Russia in the future,” said Oliver Hermes, president of the association. In 2014, the group campaigned against harsh economic penalties against Moscow. But this time, they want the hostilities to end as soon as possible to save the relationship.

Mr. Oliver Hermes (second from left) with Russian Prime Minister Dmitry Medvedev (third from left) during his visit to Russia in 2016. Photo: APMr. Oliver Hermes (second from left) with Russian Prime Minister Dmitry Medvedev (third from left) during his visit to Russia in 2016. Photo: AP

Mr. Oliver Hermes (second from left) and Russian Prime Minister Dmitry Medvedev (third from left) during a visit to Russia in 2016.  Photo: AP

Years ago, Martin Daller, CEO of lighting control equipment maker Seebacher, was not interested in investing in Russia. But it was such a large, attractive market that when a Russian manager left a rival company and persuaded him to open a branch in the country, he nodded. The business started to thrive this year when the 24/2 event broke out.

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“Now, we’re asking ourselves what we should do. Terminating his contract and firing him,” Daller said from a financial perspective, it doesn’t matter much, but this employee is a father of three and his whole family depends on his work.

It’s not just small companies that are facing tough decisions. Wintershall Dea, a German oil company with a presence in Russia for 30 years, has canceled its annual press conference scheduled for February 25. Instead, the leaders issued a joint statement on March 2, expressing alarm. “What is happening is shaking the very foundation of our cooperation,” the company said.

The company exclusively said that it would stop paying Russia and cancel a one-billion-euro investment in the Nord Stream 2 natural gas pipeline connecting Russia and Germany, which was suspended by Berlin on February 22. Nor will it receive any revenue from its oil and gas operations in Russia, which accounts for nearly a fifth of 2021 profits.

Not every German company withdrew. Metro, a wholesale food company with 93 locations in Russia, with sales of 2.4 billion euros last year, said it was continuing to operate because of concerns that the withdrawal would disrupt food supplies. for the citizen. “None of our 10,000 employees in Russia are personally responsible for the war in Ukraine,” the company said.

Metro is also trying to operate one of 26 stores in Ukraine, depending on the security situation, and is supporting efforts to provide services to those forced to leave their homes.

In addition to the impact on companies that have invested in Russia, analysts predict that the German economy as a whole will be affected by a rise in energy and food prices. However, politicians have mobilized the people’s spirit of self-sacrifice for the sake of a larger goal.

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“My country, Germany, will be the country hit hard by the sanctions that have been passed by the European Union and the US. We are prepared to suffer. Freedom is priceless,” said Emily Haber. , Germany’s ambassador to the US stated.

Source: VnExpress

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