By Andreas Kissler
BERLIN (Dow Jones)–As a result of the Russian war against Ukraine, there are clear shifts in economic relations with Central and Eastern Europe, according to the Committee on Eastern European Economic Relations. Accordingly, trade with the East reached a new record high. “The disengagement from the Russian market is progressing rapidly and will continue in 2023,” said Michael Harms, Managing Director of the Eastern Committee, at the association’s spring press conference. “Exports to Russia fell by 45 percent in 2022, the lowest level in two decades. However, the drastic decline was more than offset by double-digit increases in exports to other markets.”
According to the association, German trade with Central and Eastern Europe climbed to a new high of 562 billion euros in 2022. Overall, according to the association, German foreign trade with the 29 countries in Central and Eastern Europe was 12 percent higher than in 2021. The 29 countries would have continued to contribute a good 18 percent to total German foreign trade, again more than China and the USA together. “Trade with Ukraine fell less sharply in 2022, at minus 7 percent, than would have been expected given the dramatic situation, and has even been on the road to recovery since late autumn,” said Harms. The German companies would have maintained production wherever possible or quickly restored it.
German exports to Russia fell dramatically in 2022 by more than 12 billion euros to almost 15 billion euros. In the ranking of German sales markets, Russia fell from 15th to 23rd place within a year. “Statistically, the war has already set back German-Russian economic relations by 20 years, and there is no end in sight to this negative development,” said the Eastern Committee director.
The rapid decoupling from Russia is only partly due to the EU sanctions packages. “The majority of German companies doing business in Russia do much more than the sanctions require, have stopped new business or are in the process of completely winding up their business in Russia,” said Harms. Only in sectors that are expressly exempt from EU sanctions, such as the health and agricultural sectors, is more or less normal business taking place. Much-cited statistics on the alleged whereabouts of most companies in Russia are misleading, “because a 100% withdrawal is highly complicated and time-consuming.”
While German trade with Ukraine, Russia and Belarus declined in 2022, the East-Central European EU countries continued to expand their dominance in eastern trade. With a turnover of 168 billion euros, Poland was the fifth largest German trading partner in the world, ahead of Italy. The Czech Republic overtook Great Britain and thus rose into the top ten of German trading partners. Hungary left Russia behind and climbed to 14th place. German trade with Southeastern Europe also developed impressively in 2022. According to the information, foreign trade with Bulgaria, Serbia and Croatia increased by more than a fifth. In addition to the EU members Romania, Bulgaria and Croatia, the countries of the Western Balkans are becoming increasingly important for German companies.
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DJG/tank/apo
(END) Dow Jones Newswires
February 22, 2023 05:39 ET (10:39 GMT)