The German and Russian economic partnership is
underpinned by vision as a modernization partner
that includes knowledge transfer, general projects,
workshops and training programs in areas such as
health and demographic policies, energy efficiency,
infrastructure, education and research, and legal
cooperation. German economic stakeholders argue
that this cooperation helps Russia to support
modernize and diversify the economy and encourage
the growth of small and medium-sized businesses in
Russia. As foreign investment increases,
liberalization and privatization of Russia's economy
is an important prerequisite for modernization. Thus,
German policy has German investment objectives
and knowledge transfer should help modernize the
Russian economy, while the Russian government
improves conditions for investment by strengthening
the rule of law, adopting European standards,
economic liberalization, investing in education and
research, and eradicating corruption (Meister, 2014:
2). All these reforms should lead to democracy, less
corruption, and more of a European Russia.
Although this sounds good in theory, but in reality,
this idea is at odds with the interests of the Russian
political elite. Until the violation of Russia against
international law in the annexation of Crimea and
separatist military aggression in Donbass, the
territory of Ukraine, which destabilize the principle
of Ostpolitical fundamentals that made Germany
furious and spun the direction of its foreign policy.
2 GERMAN-RUSSIA RELATION
DURING MERKEL REIGN
Reframing the Crimean conflict that broke out in
2014, for the first time Germany demonstrated its
leadership stance through the EU in an international
crisis. After the annexation, the German
government, represented by Chancellor Angela
Merkel and Foreign Minister Frank-Walter
Steinmeier, insisted that Russia's actions in this
over-aggressive Crimean annexation were
unfortunate and have damaged what has been a
"peace order" for the past 70 years. This is because
what Russia is doing is not just a political
intervention to support the Crimean separatist
referendum of Ukraine, but also military aggression
equipped with combat weapons. This is certainly a
threat to Germany. Initially, during the annexation,
Merkel remained in constant phone contact with
Putin, advising Putin to withdraw his aggression
from Ukraine while the West could still help save
the country. Merkel gave a stern warning that Russia
would be under severe financial sanctions if Putin
refused to comply with this warning. Although the
imposition of these sanctions will harm the German
and European economies themselves, but these
sanctions will bring down the Russian economy
much deeper and Putin can not expect Russian-
German pro business to veto this action (Rinke,
2014: 7).
German foreign policy towards Russia during the
crisis of Ukraine was formed by the interaction of
domestic and external factors. External factors
pushed Berlin to take a critical stance. The United
States and some EU member states, particularly
Poland and the Baltic states, immediately took up
hardliners vis-à-vis Russian policy. Initially, Merkel
and Steinmeier sought to resolve the Crimean crisis
through negotiations. When this strategy failed,
German leaders led efforts to impose sanctions on
Russia. Violent sanctions against this Russian action
include economic sanctions targeting (1) capital
markets (limiting certain trade expenditures
'contracts, equity or similar financial instruments'),
(2) defense sector (arms embargo), (3) use of
multiple goods ( embargo on the use of dual goods
and technology), (4) the oil industry (certain
technology embargoes related to deep water, the
Arctic and oil); Russia's release at the G8 Summit in
Sochi in June 2014; suspension of EU-Russia talks
on visa matters and the New Testament; first travel
ban and asset freeze for 21 Russian individuals; and
much more (Raik et al, 2014: 4).
According to the Council of Europe, the main
objective of EU sanctions against Russia is to bring
about a change in the actions of Russia in Ukraine,
namely the annexation of illegal territory and the
deliberate destabilization of neighboring sovereign
nations. With Russia becoming the EU's biggest
neighbor and important trading partner, this is the
most challenging EU sanctions policy to date, as
well as its foreign policy in general. The EU has
been drawn into a geopolitical confrontation with a
large regional power. Although arguably lacking a
clear strategy, the EU has used its economic power
in unprecedented ways and with major strategic
implications. However, by 2016 easing sanctions
against Russia will gradually be realized if there is
"substantial" progress on the Ukrainian issue. A day
earlier, German Weekly Der Spiegel published a
story showing that German Chancellor Angela
Merkel is considering raising some early sanctions,
such as tourism restrictions, in return for Moscow's
cooperation on local elections in eastern Ukraine. As
Steinmeyer said in the Wall Street Journal: