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World

Russian Embargo Leaves EU Producers Holding The Apples

SCOTT SIMON, HOST:

European countries that export vegetables, fish, meat and milk to Russia are starting to feel the economic effects of a recent food ban. Russia has banned all food imports from the EU and other countries in response to Western sanctions on Russia. And so the pecorino has sent back to Italy. They put a hold on pears from Modena; the price of Norwegian salmon sank. And what's Poland going to do with all of its apples? We are joined now by Stephen Evans, the BBC's Berlin correspondent. Thanks so much for being with us.

STEPHEN EVANS: My pleasure, Scott.

SIMON: So can you feel the effect of the Russian ban yet in Germany?

EVANS: Some of the companies are saying that they're very worried about it. For example, there is a pickle plant not that far from Berlin which wants to open a sister pickle plant near Moscow. And it says that expansion will now not go ahead. So you see all of that, and you're also getting an awful lot of business leaders of big companies with big markets in Russia saying we're very worried about it. But you're not seeing anything like job losses and people like that. You're getting a sense of a bit of attention at the top of the country, if you like. And they've made those feelings very, very clear to Angela Merkel.

SIMON: Let me go from pickles to apples and Poland because the agricultural minister apparently went on TV saying he thought Russia had broken international law with the embargo. And now they're asking the United States to purchase Poland's excess apples, which must be a lot of apples. Is Poland more exposed than, say, Germany?

EVANS: On fruit, Poland is much more exposed than Germany. If you look at the exposure of countries - Poland on produce, Britain on finance, France has a big military order with Russia and there's a dispute over whether those vessels - those ships should be delivered. And for Germany, Volkswagen - those are the companies that are worried. So the food sanctions business doesn't hit Germany like it hits Poland.

SIMON: Norwegian salmon - I guess there's also concern there too because even - there's only so much salmon even Norwegians themselves can eat and they need Russia's - that market.

EVANS: Sure, and that's a big market for Norway. Fish producers in Britain are also very worried about it. But the countries say they will go on. And they also assert who's this going to hurt? If you read the Russian press, there is a view that sanctions against - or the reverse sanctions, as it were, by Russia against the European Union will actually help Russian producers. They say this is the chance for us to produce and to get our own markets going.

So some European companies are starting to mutter about whether this is actually a bit about economics as well as politics. But the real fear is that a fragile economic environment, an economy which is teetering between recession and some growth will be tipped back the wrong way just by the dark clouds coming from the east.

SIMON: We should remind ourselves, maybe too, Germany is often considered to be the engine that drives the European economy.

EVANS: It is. The theory is that Germany will pull the southern European countries out of the ditch, out of the trough. But a few days ago, growth figures showed the German economy actually shrinking. GDP fell in the spring - the three months of the spring by not .2 percent. And so that initial theory that the strong Germany would pull everybody else out is beginning to look a little bit shakier.

SIMON: The BBC's Stephen Evans in Berlin. Thanks so much for being with us.

EVANS: It's my pleasure. Transcript provided by NPR, Copyright NPR.