Russo-German Deals Worth Billions Signed | Business| Economy and finance news from a German perspective | DW | 11.04.2005
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Business

Russo-German Deals Worth Billions Signed

German and Russian companies have signed business deals worth billions of euros at the Hanover Fair on Monday as the two countries' leaders said they were committed to help further improve economic ties.

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Germans and Russians plan to build a Baltic Sea gas pipeline

German chemicals giant BASF and Russian energy company Gazprom signed contracts for two major projects at the world's largest industrial fair. The two firms have agreed to jointly develop the Yuzhno-Russkoye gas field in western Siberia, making BASF the first German company to get access to Russia's enormous gas reserves.

The deal includes investments worth $1 billion (770.8 million euros), BASF CEO Jürgen Habrecht said, adding that another joint project, a Baltic Sea pipeline, will be worth another $2 billion.

German Chancellor Gerhard Schröder and Russian President Vladimir Putin, who attended the signing ceremony, described the deal as "historic." Russia is Germany's major oil and gas supplier.

"This marks the transition to a completely new way of cooperating," Putin said, adding that the BASF-Gazprom project will stabilize energy supplies in Europe and around the globe.

German electronics firm Siemens and Russian railways on Monday agreed to build 60 high speed trains in a deal worth 1.5 billion euros, putting in writing a contract that had already been announced during the German-Russian summit in December.

Six other deals between German and Russian companies were also signed on Monday. Putin and the other Russian delegates intend to stress their country's claim to be a dynamic economy.

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"We know that the growth perspectives for the entire Russian economy depend directly on the legal security of the companies and concerns," Putin said. "The state will ensure that these conditions are further improved. We will also modernize the tax system and cut bureaucracy."

A concrete cooperation offer

Putin called on German companies to invest more in Russia, saying he regarded the Hanover Fair not only as a window for Russian industry but also as a concrete offer of cooperation.

Bundeskanzler Gerhard Schroeder, links, und der russische Praesident Wladimir Putin, 2. von links, waehrend des offiziellen Eroeffnungsrundganges auf der Hannover Messe in Hannover

Schröder and Putin at the fair on Monday

Some 150 Russian exhibitors are putting their goods and services on display in Hanover -- the biggest-ever participation by a partner-country. Russian exhibitors will also be demonstrating their strength in aircraft construction, including the new medium-range jet, RRJ. The jet is scheduled to have its maiden flight at the end of 2006.

Schröder underlined the basic conditions for a joint future that he said went beyond economic ties.

"With the close strategic partnership we want to prevent a repetition ever again of the fateful chapters in our history," he said. "We want to shape our future jointly in a Europe that is growing together. And that is only possible if the European Union forms a strategic partnership with Russia and then expands it both politically and economically."

Russia boosts German export

The President of the Federal Association of German Industry, Jürgen Thumann, who was also present at the opening ceremony, recalled that exports are traditionally considered to be the German economy’s growth motor, with exporting firms making up nearly 40 percent of the country's Gross National Product.

Containerterminal in Bremerhaven

Containers are prepared for overseas shipment in Bremerhaven's port

"In 2004, German exports were spurred on in particular by one country, Russia," Thumann said. "Germany has been Russia’s biggest foreign trading partner for years, and more German companies are represented in Russia than any other foreign country."

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