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    German Experts View a Possible Free Trade Deal With Russia as Highly Profitable

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    A free trade area for the European with Russia and the other members of the Eurasian Economic Union (EAEU) would have economic advantages for all parties involved, according to an analysis by the Center for Economic Studies (CES), Ifo Institute, Germany.

    The study published on Monday said that a comprehensive trade agreement between Brussels and the EAEU "could lead to a 0.2 percent increase in real per capita income in the EU." For Russia, this increase could be as high as three percent, or €235 ($248) per capita a year.

    "These income gains stem from the fact that the economic structures on all sides are highly complementary," Gabriel Felbermayr, CES director, explained at conference at the Ifo institute.

    At the same time, according to the study, such partnership will not be possible until the Ukrainian conflict is resolved.

    "A free trade agreement is barely conceivable as long as the Ukraine conflict remains unsettled. Such a pact could nevertheless form an integral part of a new strategic partnership between the EU and Russia," Felbermayr noted.

    According to calculations, a free trade area would boost Russian exports to the EU by nearly €71 billion ($75 billion) and also increase exports of Russian products to the rest of the world.

    In 2016, Russia’s external turnover reached $471.2 billion (11.2 percent down against 2015). The EU market accounted for 42.8 percent of Russian exports.

    It is noteworthy that initially the idea of a united economic community spanning from Lisbon to Vladivostok was proposed by Russian President Vladimir Putin back in 2010 when he was prime minister. He presented his vision in an article for the German daily Suddeutsche Zeitung.

    "In the future, we could even consider a free trade zone or even more advanced forms of economic integration. The result would be a unified continental market with a capacity worth trillions of euros," Putin wrote.

    He also proposed closer cooperation between Russia and Europe, including in energy, manufacturing industry, and hi-tech segments.

    As for Germany, the study said that a free trade agreement with Russia "could lead to growth of €31 billion ($32.7 billion) in exports." Other EU countries may also benefit from such an agreement.

    Meanwhile, a fresh poll revealed that an overwhelming majority of German entrepreneurs in Russia hope the EU sanctions on Russia would be eased this year, although many are pessimistic about this outcome.

    The survey by the German-Russian Chamber of Commerce (AHK) quizzed 190 German businesses that have a combined turnover of $30.7 billion in Russia and employ 122,000 people.

    "Only 29 percent of entrepreneurs sampled expect sanctions to be eased this year, whereas 91 percent wish for this," AHK chairman Matthias Schepp told reporters.

    Presenting the findings of the survey at a press conference in Berlin, Schepp said German businesses wanted EU economic sanctions against Russia to "be gradually lifted depending on progress in the implementation of the Minsk agreements."

    Moreover, last week, German Ambassador to Russia Rudiger von Fritsch said that the interest of German businesses investing in Russia remains high despite sanctions.

    "The willingness to invest in Russia remains consistently high. In 2016, the level of investment has reached the numbers not observed for a long time. […] The amount of investment at the end of the year is much greater than in the previous couple of years," von Fritsch told the Russian newspaper Moskovsky Komsomolets.

    Since 2014, relations between Russia and the EU, including Germany, deteriorated amid the crisis in eastern Ukraine. Brussels, Washington and their allies have introduced several rounds of anti-Russia sanctions since Crimea reunited with Russia in 2014 and over Moscow's alleged involvement in the Ukrainian conflict.

    Russia has repeatedly refuted the allegations, warning that the Western sanctions are counterproductive and undermine global stability.

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    free trade zone, business, sanctions, European Union, Germany, Russia
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    • avatar
      anne00marie
      Can you see that happening? The EU needs Russia more than Russia needs the EU, but, the EU never looks at what is best for the people of Europe, just what is best for the leaders of the EU and their buddies.
    • avatar
      slimyfox
      “A free trade area for the European with Russia and the other members of the Eurasian Economic Union (EAEU) would have economic advantages for all parties involved, according to an analysis by the Center for Economic Studies (CES), Ifo Institute, Germany”.

      Seams to me that oligarchs are stronger than I previously taught. Such Free Trade Agreements are always proposed by the winning party. Does Sputnik really believes that Russian people are so stupid not to understand that our government would not sign such a contract with Russia out of pure altruism and love for Russia. Wake up German politicians hate Russia and would do all they can to sink Russia. There is no party that would do anything for Russia to help Russia. No all from the left to the right simply hate Russia and wish all worst for Russia. Only about 25% of Germans perceive Russia as non threat to EU.

      Now business is run by the people who in private life might hate Russia but when money is concern they will do deal with devil himself if needed. However in such case they will do all that is necessary to make that agreement more profitable for them than for devil (Russia). How on Earth someone can think that Free Trade Agreement would be beneficial for Russia and TTIP and CETA are not for EU?

      Well let me tell you where is the problem that EU is on a losing side in both cases. On a paper all looks nice but devil is in a details and as we lawyers know where to look for them we know where problems are. TTIP and CETA had built in mechanism which initially looks very good and acceptable, however when we disseminate whole agreement we discovered that there are even unconstitutional limitations and that whole system has been built in such manner that the financially stronger partner will always win even against government.

      Very soon has been discovered that USA has vast majority of extremely powerful corporations which are actually economic empires and that they would crush every single opponent in EU. On our side only we Germans have few strong corporations such as VW, possibly Siemens and nothing more that would benefit from TTIP, all other would have to submit to the power of USA corporations. Beside that once signed and ratified in Parliament these agreements become permanent for eternity. It is impossible to cancel or to alter them. They are made by neocons and establishment for their benefits only and people will become slaves.

      Now Germany in its total hate of Russia and anger as we never conquered Russia decided to offer Russian oligarchs a deal which will enrich them but in return destroy Russia and turn it into slave country. Do not forget that in such agreements bigger fish eats smaller and Russian oligarchs in economic terms are just small fishes for German giants. As it is becoming clear that EU will reject bot agreements with North America our corporate sharks are looking around for the best pray around which will be their best ever – dream – catch, and that is Russia.

      Russia driven by greedy oligarchs, corrupt politicians will become easy pray if blinded enough. It is clear that Germany will offer instant cancellation of sanctions after the agreement is signed. Then there will be no need for sanctions as Russia offered itself on a silver platter. Our energy giants will instantly swallow Russian energy sector and become official owners. That take over process will be so swift and fast that even before Russians will become aware in Parliament they will vote to introduce German language as first official language and Russian language as secondary.

      I have no good feeling with Putin and Medvedev as both of them are close to oligarchs who want such deal as that would ensure them more money than ever. Russia get up and reject such idiocy and kick in arse and out of office whoever supports it.
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