merkel meeting
© Markus Schreiber/Associated PressPhoto Chancellor Angela Merkel has kept German businesses, which have strong interests in Russia, apprised of shifts in her thinking on relations with Moscow.
Over recent months, something significant has happened in Europe: In the crisis over Ukraine, Germany has assumed leadership not just in its familiar fashion of trying to coax Russia away from belligerence and bluster, but also in standing firm and imposing sanctions on Moscow even if they hurt German business.

Perhaps even more remarkable is that Germans, long anxious to preserve commercial, energy and cultural ties with their vast eastern neighbor, have gone along. Seventy percent of 1,003 adults polled last week by Infratest dimap for the public broadcaster ARD approved of stricter sanctions; just 15 percent viewed Russia as a reliable partner in a poll with a three-percentage-point margin of sampling error.

In marked contrast to France's leadership, Chancellor Angela Merkel and her government - a united "grand coalition" of center-right and center-left - have kept German businesses apprised of any shift in thinking and made it clear throughout that tougher sanctions would be imposed if Russia fell further out of line.

The political upheaval over Ukraine has already affected Germany's economy, slowing down growth and throwing into question the country's ability to sustain its long record of robust performance even amid anemic recovery elsewhere in the European Union, economists said. The sanctions that would restrict trade between the countries are likely to cause further damage.

But the shocking downing of a Malaysian passenger airliner over eastern Ukraine in July hardened many Germans' resolve and, with Germany leading, led to even tougher European sanctions on Moscow. Now, as Russia sends a huge convoy it says is delivering aid to beleaguered eastern Ukraine, Berlin is firmly warning Moscow not to exploit the column of trucks for military use or proceed without Ukrainian agreement, and telling Ukraine to show restraint and not worsen the plight of trapped civilians.

Comment: One of the benefits of the MH17 false-flag operation to war-mongering Washington.

Appeals to reason have long been a hallmark of German policy. But, even if still couched in caution, there is a clear determination to show Russia that there can be no return to business as usual, even among German businesspeople who have spent years cultivating ties and profits there.

How Much Europe Depends on Russian Energy

A new package of European Union sanctions against Russia includes restrictions on the sales of some equipment used by Russia's oil industry, which could affect countries that rely more heavily on Russian energy. The sanctions will not impact technology for natural gas.

Percentage of dependence on Russian gas for each EU country's energy needs:

Finland 76%

Sweden 46%

Estonia 69%

Netherlands 34%

Latvia 72%

Denmark 10%

Lithuania 92%

Germany 34%

Poland 91%

Belgium 30%

Czech Republic 73%

Slovakia 98%

Austria 9%

Britain 13%

Romania 47%

France 17%

Slovenia 24%

Croatia 34%

Ireland 1%

Hungary 86%

Bulgaria 90%

Greece 40%

Spain 14%

Italy 28%

Portugal 10%

Malta 2%

Cyprus 3%
Source: Eurostat as published by Global Trade Information Services
See graphic here

The support comes from surprising quarters. Eckhard Cordes, chairman of the Committee on Eastern European Economic Relations, founded in 1952 to promote business with what was then the Soviet bloc, noted that Moscow's retaliation last week for the latest European sanctions would only sharpen the negative trends in business with Russia, and that his group warned early on of the dangers of sliding into tit-for-tat sanctions. But he stopped well short of objecting to the Western measures or repeating warnings of past months about the danger of losing hundreds of thousands of jobs by shutting down the ties of 7,000 German companies doing business in Russia.

Gernot Erler, a lifelong Social Democrat, former deputy foreign minister and now commissioner for Russia and former Soviet states, a government position in the German Parliament, first visited Moscow in 1965 and has spent decades promoting the Ostpolitik of reconciliation with the East. Now, he is bitingly critical of Russia and its leader.

"The policy of Vladimir Putin is destroying reserves of trust with breathtaking speed," Mr. Erler said in an email. "Russia is not naming its goals and has suddenly become unpredictable. And being unpredictable is the greatest enemy of partnership. Restoring trust will take time."

Comment: On the contrary, Russia has been very upfront about its goals and Putin has acted clearly within these parameters:
Russians must consolidate and develop their country, neither sliding into isolationism nor sacrificing their dignity for the sake of pleasing anyone, President Vladimir Putin declared.

"We have to develop our country with calm, dignity and efficiency, without barricading ourselves from the outer world or breaking ties with partners, but also without allowing anyone to treat us with disrespect,"

Government officials, speaking privately, use the word tragic to describe what they see as President Vladimir V. Putin's rupture of decades of careful détente. The lament is echoed by businesspeople dealing with a country that seemed eager to look West and to have forgiven the Germans for the Nazi crimes and immense bloodshed of World War II.

"The trust we built up together and mutually in the last 15 to 20 years - not just in trade, but in school and sports exchanges, I myself did a lot here - has been shaken," said Ralf Meyer, 50, a logistics manager who has worked with Russia since 1993 and has run his own company exporting air-conditioning and other climate control systems since 2006. "Parents are afraid to send their children to Russia to play matches. Much capital has flowed out of Russia that had already been sent in for specific investments. Projects have been delayed or canceled. Banks, whether giving lines of credit or bridging finance, delay answers."

Comment: The delay of projects, bank problems etc are the result of having to answer the original Western sanctions on Russia. As to the fear-mongering about visiting the country, look to the presstitute media stoking the fears of the public.

Mr. Meyer estimates that 1,900 people, mostly in Russia, depend on his company and associated contracting, fitting, repair work and transportation. Yet he does not fault the German government.

Ms. Merkel, of the center-right Christian Democrats, and Foreign Minister Frank-Walter Steinmeier, a Social Democrat, have managed the situation well, said Mr. Meyer, whose company is based near Hamburg. "I have faith in our government that it makes the right decisions for business," he said, despite his disappointment "that we sometimes orient ourselves too close to what America wants," even as the United States has "made some big mistakes in East European policy."

"These sanctions are not the right way to get into a better situation with Russia. One must sit down and listen to what Russia wants," he said, adding that he did not think Russia would invade Eastern Ukraine.

Many German businesspeople fret that ties might never be fully restored. Small and medium-size businesses - the backbone of Germany's export-driven economy - are calling the Association of German Machine Builders to express their fear that Russian partners will turn to the Asian competition, maybe permanently, said Monika Hollacher, a Russia expert at the association. For association members, trade with Russia dropped 20 percent from January through May compared with the same period in 2013, she said, when association members exported 7.8 billion euros (more than $10 billion) in goods to Russia.

If Germany's economy stalls further as a result of lost business with Russia and general uncertainty in a war-torn world, then it may drag down what the European Central Bank's president, Mario Draghi, warned last week was a still faltering recovery across Europe.

Comment: Ya think? Allying with the reality-denying neo-cons in Washington instead of thinking for themselves is going really bite the EU. They are fretting because Russia calmly countered the sanctions with sanctions of their own. How dare Russia not buy EU fruit, or dairy, or not sell gas because the bills haven't been paid on the gas already consumed? How dare they trade with a friendly Asia! Welcome to a real free market. Just because you are selling something doesn't mean anyone has to buy it.

There are signs that differences over dealing with Russia may exacerbate tensions within the European Union, which with Germany at its helm has maintained formal unity among 28 member nations with very different agendas and interests.

France and Britain have exchanged barbs over the wisdom of selling amphibious attack boats to Moscow, as France insists it will, or catering to the finances of Russian oligarchs, as the City of London does. President François Hollande of France, under much greater political and economic pressure than Ms. Merkel, has been less vocal in encouraging business support of sanctions, whose effect and scope have been debated for months in Germany.

In part, that is because Russia is seen here as Germany's near neighbor, and the two are bound by centuries of warring and trading - as well as by repeated intermarriage of German nobility with Russian czars - that have forged a relationship closer than the Kremlin has, or had, with any other foreign power.

These ties continue. When Germany's triumphant World Cup soccer team returned to Berlin for a victory parade attended by hundreds of thousands, they were serenaded by a Russian-born German pop star, Helene Fischer. The largest minority in Germany, estimated at 3.5 million, is Russian speaking - many, like Ms. Fischer, descendants of ethnic Germans who went to Russia centuries ago and have returned, along with Russian-born Jews and others who settled in Germany in the past 20 years.

To a degree unknown in the United States or even farther west in Europe, Russia is familiar. This has perhaps stiffened Germany's resolve now that Russia has suddenly become, as Mr. Erler noted, unpredictable. Germans dislike the unexpected and have spent months rallying a determination not to let Mr. Putin's actions stand.

"I am sobered that in Europe, 25 years after the Cold War, we have still not advanced to the point where we can deal in a different way with unavoidable differences of opinion," Mr. Steinmeier, the foreign minister, was quoted as saying to the weekly newspaper Die Zeit in a wide-ranging interview in April that reflected the hardening view in Berlin. Seventy years after World War II, he added, "we confront in just a few short weeks a policy that changes borders by force. That cannot become the norm, either in Europe, or the world."

Comment: Still twisting the democratic vote by Crimea to rejoin Russia.

Besides, he said, "the hollowing out of the principle of territorial inviolability could, in the end, be most dangerous of all to the multination state of Russia."