The Ukraine crisis will have harsh consequences for German business, the country’s leading business group said.
The Association of German Chambers of Industry and Commerce estimates a drop of up to 20 percent in exports to Russia by the year’s end. This would amount to €7 billion ($9.05 billion) in losses. The decline in exports to Ukraine will cost Germany another €3 billion. Companies are bracing for the worst.
“We see very clear economic effects from the Russian crisis and the German economy is preparing itself for another downturn,” said Rainer Seele, president of the Hamburg-based German-Russian Chamber of Foreign Trade.
A survey of German firms doing business in Russia conducted by Mr. Seele and Volker Treier, deputy chief executive officer and foreign trade expert at the chamber, known as DIHK, in Berlin, reaches some dramatic conclusions.
Among companies polled, 71 percent describe economic sanctions against Russia as recessive and bad. As a result, 62 percent are planning radical measures such as canceling projects in Russia (26 percent), laying off employees (20 percent), introducing shorter working hours (8 percent) or abandoning Russia altogether (8 percent).
According to Mr. Treier, if the economic situation doesn’t improve within six months, the trend toward layoffs will “gain momentum.”