Current Challenges for German Business in the Russian Market

Abstract

The reaction of leading German companies in the Russian market after the start of the special military operation on the territory of Ukraine is considered. Companies interested in resolving the situation as soon as possible decided whether to leave the Russian market or not. The author analyzed the decisions of firms in the general context of winding down German business activities after 2014. After the acute phase of the pandemic ended, trade and economic cooperation between Russia and Germany showed a tendency to recover. However, since February 24, 2022, German companies with a small number of exceptions have generally supported anti-Russian sanctions. The conceptual typology of firms’ decisions, i.e., exit, activity compression, stabilization, and continuation of work in a difficult environment, is explored. It is concluded that the long-term trajectory of the real actions of German companies has fundamentally changed. The analysis made it possible to establish that the foundation of pragmatic market relations towards Russia is being eroded in the German foreign economic policy. This explains why German companies declare their willingness to pay. If during the annexation of Crimea to Russia groups of lobbyists for the interests of the German economy fought to maintain contacts, now such efforts are coming to naught.