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German public, industry wary of economic sanctions against Russia

Source: Reuters - Fri, 7 Mar 2014 16:13 GMT
Author: Reuters
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(Recasts, adds data, head of Germany's Eastern European relations lobby group)

By Gernot Heller

BERLIN, March 7 (Reuters) - A German business group says the imposition of economic sanctions on Russia should the Ukraine crisis worsen would have a huge effect on the global economy.

Eckhard Cordes, head of Germany's Committee on Eastern European Economic Relations, told Reuters: "We feel a clear sense of unease and the fear that the crisis will worsen, bringing with it a spiral of sanctions which will have a massive impact on the economy."

Some 6,200 German firms are active in Russia, and have invested 20 billion euros in the country, while 300,000 German jobs are dependent on trade with Russia, Cordes said.

Germany is also reliant on Russian energy, and obtains 40 percent of its gas imports from Russia and a third of its oil, although gas stores are well stocked after a mild winter.

The most serious East-West confrontation since the end of the Cold War - resulting from the overthrow last month of Ukrainian Pesident Viktor Yanukovich after violent protests in Kiev - escalated on Thursday when Crimea's parliament, dominated by ethnic Russians, voted to join Russia.

The region's government set a referendum for March 16 - in just nine days' time.

Russian President Vladimir Putin rebuffed a warning from U.S. President Barack Obama over Moscow's military intervention in Crimea, saying Russia could not ignore calls for help from Russian speakers there.

While the United States has introduced first sanctions against Russia by ordering visa bans and asset freezes, the EU, Russia's biggest economic partner and energy customer, adopted a three-stage plan to try to force a negotiated solution, stopping short of immediate sanctions.

Cordes said Germany had done an excellent job in trying to push for dialogue to ease the conflict, and he praised the EU's moves for sending a signal whilst still leaving space and time for diplomatic moves.

An opinion poll published on Friday showed the German public also had little appetite for imposing economic sanctions on Russia, although it supported the new government in Kiev.

In the survey by Infratest Dimap for broadcaster ARD and the newspaper Die Welt, only 38 percent of those polled said they favoured economic sanctions against Russia, while 72 percent supported financial aid for the Ukrainian government.

Only 15 percent of those polled thought Moscow a reliable partner and three quarters were of the view that Putin himself was not trustworthy.

The survey also suggests public support for Chancellor Angela Merkel's stance. She has been cautious about imposing anything but symbolic sanctions on Russia as she tries to convince Putin to agree to a "contact group" that would reopen communications between Moscow and Kiev.

The poll showed Merkel's approval rating rising two points to 71 percent but she has been overtaken by Frank-Walter Steinmeier, her Social Democrat (SPD) foreign minister, whose approval rating rose 4 points to 74 percent.

He has been at the forefront of the shuttle diplomacy between Kiev and Moscow, while Merkel has worked the phones with Putin. (Reporting by Stephen Brown and Gernot Heller; Editing by Noah Barkin and Erik Kirschbaum)

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