https://www.ft.com/content/ef20122e-ae2f-11e9-8030-530adfa879c2?desktop=true&segmentId=d8d3e364-5197-20eb-17cf-2437841d178a In today’s relationship, after five years of EU and US sanctions, geopolitical tensions and allegations of Russian malfeasance from election meddling to assassination attempts, some western countries are quietly adopting a similar mantra despite the negative mood music.
While pro-Russia rhetoric and calls to lift sanctions emanating from governments in places such as Hungary and Italy regularly make headlines, data show that the countries doing most business with Moscow are the two that have led much of the west’s condemnation: Germany and France.
German corporates invested more than €3.3bn in Russia last year, the highest level for a decade and surpassing volumes seen before Moscow’s 2014 invasion of Crimea, according to data from the Russia-German Chamber of Commerce. The total trade volume between the countries rose an annual 8 per cent to €61.9bn, with growth on both sides.
It’s a similar story with France: bilateral trade with Russia rose 11 per cent to $17bn last year. French companies have about $20bn of investment in Russia at present.
This spring, a month before president Vladimir Putin opened a new Mercedes-Benz factory outside Moscow, French energy company Total finalised a deal to acquire a 10 per cent stake in a $21bn Russian Arctic gas project. It already owns 20 per cent of a neighbouring gas project worth $28bn.French and German groups Engie, Uniper and Wintershall are each paying €950m to help Kremlin-controlled Gazprom build the Nord Stream 2 offshore gas pipeline between Russia and Germany that is threatened by US sanctions.
None of these investments at present contravene the letter of the law, or in fact, sanction regulations that in many cases Berlin and Paris have been instrumental in drawing up and subsequently upholding.
But the strengthening business ties illustrate that Berlin and Paris have adopted a two-track approach to Moscow: sticking to the hard lines in the political sphere in a bid to keep Russia in check, while encouraging friendly corporate relationships.
Yet some in the diplomatic community — and especially those from countries where trade with Russia has plummeted because of the sanctions — privately gripe at what they see as double standards from two of the most powerful countries in Europe.
Many point to the contrast between French businesses like Total, Auchan and Air Liquide pouring money into the country and the case of Philippe Delpal, a French private equity executive who has been held in a Moscow jail for more than five months on charges brought by a politically-connected Russian businessman.
“It is about pragmatism, not appeasement,” said a senior French official in Moscow. “You work with the Russians as much as you can, without compromising your position on critical issues.”
