Germany is grappling to balance its objections to Russia’s role in the Ukraine crisis with its own economic interests.
While pushing for economic sanctions against Russia, the German government on Friday said it will approve a €5.1 billion ($6.9 billion) energy deal that will allow German utility company RWE to sell an oil and gas business to the Russian consortium LetterOne, led by Russia’s second-richest man, Mikhail Fridman.
Germany’s economy ministry will allow the sale of RWE oil and gas unit DEA, including stakes in about 190 oil and gas licenses or concessions in Europe, the Middle East and North Africa.
Only two weeks ago, Germany cancelled construction of a military training facility near Moscow to be built by the German defense firm Rheinmetall amid the Ukraine sanctions.
The European Union and United States have imposed sanctions against Russia for its backing of pro-Russian separatists in Ukraine and annexation of Crimea.
Sanctions include the sale of certain high technology equipment to the Russian army, special technologies for oil extraction, and financial market restrictions for Russian companies. Dozens of high profile Russian policymakers, businesspeople and companies have also been put on a sanctions list, facing, for example, asset freezes.
However, transactions that were signed before the sanctions were put in place are being permitted to go ahead. For instance, the French sale to Russia of two military assault ships, worth €1.2 billion, is going through.