German businesses call for reprisals if US sanctions hit them

BERLIN: Europe must be prepared to respond in kind if the United States' proposed new sanctions against Russia end up hurting its companies, an influential German industry association said on Thursday.

The German Committee on East European Economic Relations also said the measures passed last week by the US House of Representatives seemed designed to boost America's own energy exports to Europe.

The European Union fears new US restrictions could be an obstacle to its companies doing business with Russia and threaten the bloc's energy supply lines but the 28-country bloc is divided over how to respond.

Germany's economy minister meanwhile said Washington had abandoned the common line it had with Europe over Russia, which has already had sanctions imposed by the United States and European Union over its role in the Ukraine crisis.

Anger is growing in Germany at the tougher sanctions backed last week by US lawmakers seeking to punish Moscow for allegedly meddling in last year's US presidential election.

However, two sources in Brussels told Reuters last week that Germany is urging the EU to add up to four more Russian nationals and companies to its sanctions blacklist over Siemens SIEGn.DE gas turbines delivered to Moscow-annexed Crimea.

At a news conference, the head of the German Committee on East European Economic Relations, Michael Harms, said potential damage to European energy sector companies with business interests in Russia could justify counter-sanctions against the United States.

"That is naturally the very last thing we want," he said in Berlin. "But we must keep the option open."

German business leaders warn that new sanctions passed last week by the US House of Representatives could prevent German companies from working on pipeline projects that they say are essential to Germany's energy security.

Unlike the United States, whose growing production of shale gas has slashed its reliance on energy imports, much of Central Europe depends on imports of Russian gas through a vast latticework of pipelines.

Despite tensions over alleged sanctions-busting, Moscow's backing for separatists in Ukraine, and allegations that its spies meddle in elections all over the West, Russia remains a crucial business partner for Germany.

On Thursday, the Committee raised to 20 percent its forecast for growth in German exports to Russia in 2017, compared to 10 percent in its previous forecast.

Earlier, German economics minister Brigitte Zypries said the United States "has abandoned the common line it had with Europe for sanctions against Russia".