The article of Maria Gracheva examines the characteristics of Germany’s trade with the countries that along with the FRG are the members of the Council of the Baltic Sea states. The analysis is based on the statistics of German federal statistical office (Statistisches Bundesamt) in the period of 1992-2014. The author considers such indicators as the share of Baltic states in the German foreign trade turnover, the volumes of Germany’s trade with the particular countries, the trade’s breakdown into the commodity groups. The main Germany’s trade partner countries and the key trade growth/downturn drivers among Baltic countries are identified. Special attention is paid to the peculiarities of the commodity structure of the Germany’s trade with the particular countries, including their comparison with the relevant indicators of the total German foreign trade. The main commodities of the Germany’s export/import to/from Baltic countries by the three-digit classification are analysed as well as the roles of the particular countries as the German buyers and suppliers. Some important facts of the period of 2008-2014 are registered, such as the decline of the oil/gas import from Norway and Russia and the growth of the oil products’ import from Russia. The data of German- Baltic trade’s reduction in the first quarter of 2015 are presented and explained chiefly by the negative dynamics of the Russian import due to the termination of the compensation by means of the oil products. The author comes to the conclusion, that in two-three years already Russia can come down to the Germany’s second-class trade partners, and within the Baltic region the main beneficiaries thereon will be Poland, Sweden and Norway. 

The Baltic States are important trade partners of Germany: in 2014 their share in the foreign trade turnover of Germany amounted to 13.3%, including 12.2% in exports from Germany and 14.6% in imports into the Federal Republic of Germany (the rest of European countries accounted for 56.0% of the German turnover, including 55.8% of exports and 56.4% of imports)[1].

 

Pic. 1. Role of the Baltic States in the foreign trade of Germany

 

(Share of import from the Baltic States in the cumulative import to Germany

Share of export to the Baltic States in the cumulative export from Germany)

 

In 1992-2008 indicators of the Baltic countries showed a relatively constant growth: from 8.8 to 14.2% of turnover, including a growth from 8.1 to 13.4% of exports from Germany and a growth from 9.6 to 15.0% of imports into Germany (see. Fig. 1), while the share of the rest of European countries declined (turnover – from 66.1 to 58.5%, exports from Germany – from 68.9 to 61.1%, and imports into Germany – from 63.1 to 55.4%). Since 2009, there has been a downward trend in the role of both the Baltic States and other European countries in the foreign trade of Germany (the importance of the countries of Asia – primarily China, by contrast, has increased). Information on the volumes of German trade with individual countries of the Baltic region is presented in Tables 1 and 2.

 

Table 1. Trade between Germany and the Baltic States in 1992-2014.

Country/ group of countries	1992-2014
	Turnover, Germany			Export from Germany			Import into Germany			Balance for Germany
	Bln euro	%	position	Bln euro	%	position	Bln euro	%	position	Bln euro	%
Poland	919,9	3,07	1	518,2	3,18	1	401,7	2,95	2	116,5
Russia	855,2	2,86	2	387,8	2,38	2	467,4	3,43	1	-79,6
Sweden	580,3	1,94	3	342,2	2,10	3	238,1	1,75	4	104,1
Denmark	472,7	1,58	4	260,7	1,60	4	212,0	1,56	5	48,7
Norway	431,0	1,44	5	125,1	0,77	6	305,9	2,25	3	-180,9
Finland	280,7	0,94	6	150,1	0,92	5	130,6	0,96	6	19,5
Lithuania	51,9	0,17	7	32,3	0,20	7	19,6	0,14	7	12,6
Latvia	29,2	0,10	8	19,6	0,12	8	9,6	0,07	8	10,0
Estonia	26,2	0,09	9	18,8	0,12	9	7,4	0,05	10	11,4
Iceland	16,0	0,05	10	6,7	0,04	10	9,3	0,07	9	-2,6
Total Baltic States	3.663,1	12,24		1.861,4	11,41		1.801,7	13,23		59,7	2,22
Whole world	29.926,6	100,00		16.307,5	100,00		13.619,1	100,00		2.688,4	100,00

Note: The Baltic States are presented in descending order of their turnover with Germany in 1992-2014.

 

Table 2. Main partner countries of Germany in its trade with the Baltic States in 1992 and in 2014.

Indicator	Country	1992		Indicator	Country	2014
		Bln euro	%			Bln euro	%
Turnover Germany – Baltic States	Sweden	14,7	24,9	Turnover Germany – Baltic States	Poland	87,5	32,1
	Denmark	14,0	23,7
					Russia	67,7	24,8
	Poland	8,4	14,3
	3 main countries, total	37,1	62,9		2 main countries, total	155,0	56,9
	Turnover Germany – Baltic States, total	59,0	100,0		Turnover Germany – Baltic States, total	272,8	100,0
Export from Germany to the Baltic States	Sweden	7,5	26,9	Export from Germany to the Baltic States	Poland	47,7	34,4
	Denmark	6,6	23,8		Russia	29,3	21,1
	2 main countries, total	14,1	50,8		2 main countries, total	77,1	55,5
	Export from Germany to the Baltic States, total	27,8	100,0		Export from Germany to the Baltic States, total	138,9	100,0
Import from the Baltic States to Germany	Denmark	7,3	23,5	Import from the Baltic States to Germany	Poland	39,8	29,7
	Sweden	7,2	23,1
					Russia	38,4	28,7
	Norway	4,7	14,9
	3 main countries, total	19,2	61,6		2 main countries, total	78,2	58,4
	Import from the Baltic States to Germany, total	31,2	100,0		Import from the Baltic States to Germany, total	133,8	100,0
Balance for Germany – cumulative surplus	Sweden	0,3	90,0	Balance for Germany – cumulative surplus	Poland	8,0	32,0
					Sweden	7,4	29,6
	1 main country, total	0,3	90,0		2 main countries, total	15,4	61,7
	Cumulative surplus for Germany, total	0,3	100,0		Cumulative surplus for Germany, total	25,0	100,0
Balance for Germany – combined deficit	Norway	-1,8	47,6	Balance for Germany – combined deficit	Norway	-10,7	53,7
	Denmark	-0,7	19,2
	2 main countries, total	-2,5	66,8		One main country, total	-10,7	53,7
	Combined deficit for Germany, total	-3,7	100,0		Combined deficit for Germany, total	-20,0	100,0

Note. The main partners are listed as countries in descending order with the largest volume of trade, export, import and balance, which together accounted for more than 50% of the respective indicators in 1992 and 2014.

 

Within the whole period of 1992-2014, Germany’s main partners among the ten Baltic States were the following four countries – Poland, Russia, Sweden and Norway, including:

- Poland, Russia, Sweden – in turnover and exports from Germany,

- Russia, Poland, Norway – in imports to Germany,

- Poland and Sweden – in surplus for Germany,

- Norway – in deficit for Germany.

 

For more than twenty years there have occurred major shifts: in 1992, the most important contractors were Sweden, Denmark, Norway and Poland; now Denmark is not among them, and Sweden and Norway have been overshadowed by Poland and Russia.

In 1992-2014 Germany formed a surplus in trade with the Baltic countries totaling 60 billion euros, but its share in the German foreign trade surplus as a whole (2.7 trillion euros) was only 2.2% – much lower than the corresponding figures of turnover (12.2 %), exports from Germany (11.4%) and imports to Germany (13.2%). This situation is due to the sustained deficit in German trade with Norway and Russia (these countries are on the second and third places after the Netherlands in terms of the German trade deficit). In 1992-2003 the German-Baltic trade balance was variable with a predominance of the negative balance for Germany. Since 2004 it has become steadily positive for Germany (mainly due to a rapid increase of surplus in the trade with Poland).

Key countries to determine the dynamics of the German trade with the Baltic States are shown in Tables 4 and 5. The most powerful driving forces in general over the last 22 years were Poland and Russia (they were the main factors of growth both in exports from Germany, as well as in imports into Germany, and in 1992-2014 provided respectively 37 and 28% of growth of the German-Baltic turnover). Sweden and Norway took the second place (with growth of 10% and 9%).

 

Table 4. Key forces – countries of the German – Baltic trade in 1992-2014, 1992-2000 and in 2000-2008.

Country/group of countries

Total change 2014/1992

Change 2000/1992

Change 2008/2000

Export from Germany

Import into Germany

Export from Germany

Import into Germany

Export from Germany

Import into Germany

Growth

Growth share

Growth

Growth share

Growth

Growth share

Growth

Growth share

Growth

Growth share

Growth

Growth share

Bln euro

%

Bln euro

%

Bln euro

%

Bln euro

%

Bln euro

%

Bln euro

%

Poland

+43,5

+39,2

+35,5

+34,6

+10,3

+34,3

+7,7

+23,5

+26,2

+35,3

+13,9

+24,3

Russia

+26,1

+23,5

+34,5

+33,6

+10,8

+33,1

+25,7

+34,5

+22,4

+39,1

Sweden

+6,0

+20,1

Growth in the Baltic countries

+111,1

+100,0

+102,7

+100,0

+30,1

+100,0

+32,7

+100,0

+74,3

+100,0

+57,3

100,0

 

Table 5. Key forces – countries of the German – Baltic trade in 2008-2014 and 2012-2014.

Country/group of countries

Change 2014/2008

Change 2014/2012

Export from Germany

Import into Germany

Export from Germany

Import into Germany

Growth

Decline

Growth share

Decline share

Growth

Decline

Growth share

Decline share

Growth

Decline

Growth share

Decline share

Growth

Decline

Growth share

Decline share

Bln euro

%

Bln euro

%

Bln euro

%

Bln euro

%

Poland

+7,0

+65,4

+13,9

+85,2

+5,9

+62,1

+6,7

+77,7

Russia

-3,0

-76,4

-8,8

-99,5

Norway

-3,1

-82,0

-7,0

-59,7

Growth in the Baltic States

+10,7

+100,0

+16,3

+100,0

+9,5

+100,0

+8,7

+100,0

Decline in the Baltic States

-3,9

-100,0

-3,8

-100,0

-8,8

-100,0

-11,8

-100,0

Note. The main factors are countries listed in descending order with the largest increase/reduction of export/import, which total share in the growth/decline of the corresponding indicators was more than 50%.

 

In certain periods the following countries were the main trade partners:

- In 1992-2000: for exports from Germany – Poland and Sweden (growth factors), for imports into Germany – Russia and Poland (growth factors);

- In 2000-2008: for exports from Germany – Poland and Russia (growth factors), for imports into Germany – Russia and Poland (growth factors);

- In 2008-2014 years in general and in 2012-2014 in particular: for exports from Germany – Poland (growth factor) and Russia (recession factor), for imports into Germany – Poland (growth factor), and Norway (recession factor).

Poland would return as a source of positive pulses after each case of decrease of the indicators of its trade with Germany in 1992-2014. Russia, too, managed to do this for 20 years, but in the last two years it has dramatically changed its role, becoming the brake of the German-Baltic trade instead of its accelerator. The share of Poland in the foreign trade turnover of Germany rose from 1.3% in 1992 to 4.3% in 2014, the corresponding indicator for Russia rose from 1.1 to 3.3% (maximum – 4.0% – was achieved in 2012).

As for the remaining six of the Baltic countries, among them are two larger counterparts of Germany – Denmark and Finland, and four smaller – three post-Soviet states (Lithuania, Latvia, Estonia) and Iceland. Both in 1992-2000 and in 2000-2008, all six countries were factors of growth for the trade between Germany and the Baltic States (being inferior to a group of four countries mentioned above). But in 2008-2014 only the new European trio played a positive role, while the “old Europeans” generated negative pulses (Finland and Iceland – in both directions of trade, Denmark – for imports to Germany). As a result, the total share of Lithuania, Latvia and Estonia in the foreign trade turnover of Germany rose from 0.1% in 1992 to 0.4% in 2014, thus indicating that the growth rate of Germany’s trade with these countries turned out to be the highest within the Baltic region.

Distribution of the indicators of the German trade with the Baltic countries and the whole world for four product groups, that are classified in accordance with the increase in the degree of processing of the goods (and, consequently, increase of the share of value added in the value of goods), is presented in Tables 6 and 7.

 

Table 6. Structure of the goods of the German – Baltic trade in 2014, % of turnover between Germany and the Baltic States

Indicator/goods group (code, name)			Poland	Russia	Sweden	Norway	Denmark	Finland	Lithuania	Estonia	Latvia	Iceland	Turnover Germany – Baltic States, total
Export from Germany	1-4	Food	1,5	0,4	0,5	0,2	1,0	0,3	0,1	0,0	0,1	0,0	4,2
	5	Raw materials	0,2	0,0	0,1	0,0	0,3	0,0	0,0	0,0	0,0	0,0	0,6
	6	Semi-processed goods	1,6	0,2	0,3	0,1	0,3	0,2	0,0	0,1	0,0	0,0	2,8
	7-8	Finished products	14,1	10,4	7,0	2,9	4,5	2,8	0,8	0,5	0,5	0,1	43,6
Import into Germany	1-4	Food	1,7	0,1	0,1	0,2	1,2	0,0	0,1	0,0	0,0	0,0	3,5
	5	Raw materials	0,3	10,2	0,3	6,1	0,3	0,0	0,0	0,0	0,0	0,0	17,3
	6	Semi-processed goods	1,2	3,7	0,8	0,6	0,2	0,6	0,1	0,0	0,0	0,1	7,3
	7-8	Finished products	10,8	0,7	3,8	0,4	2,3	2,0	0,3	0,1	0,1	0,0	20,7
Turnover Germany – Baltic States, total*			31,4	25,7	12,9	10,5	10,2	5,9	1,5	0,8	0,8	0,3	100,0

* excluding returned, replaced and not allocated by commodity groups goods.

Note. The Baltic countries are presented in descending order of their turnover with Germany in 2014.

 

Table  7. Structure of the goods of the German – Baltic trade and the overall German foreign trade in 2014, % of export/import/turnover of certain countries, Baltic States and the whole world.

Indicator/goods group (code, name)			Poland	Russia	Sweden		Norway		Denmark			Finland			Lithuania	Estonia	Latvia	Iceland	Baltic States, total	Whole world
Export from Germany	1-4	Food	8,4	4,0	6,8		7,4		16,4		8,4			11,6		7,7	10,2	12,1	8,2	6,0
	5	Raw materials	1,2	0,3	0,9		0,4		4,4		0,4			0,4		0,5	0,9	0,2	1,2	1,6
	6	Semi-processed goods	9,0	1,7	4,4		3,2		5,1		6,1			3,5		10,1	4,3	2,3	5,5	5,6
	7-8	Finished products	81,4	94,0	88,0		89,1		74,1		85,1			84,5		81,7	84,6	85,4	85,1	86,9
	Export from Germany, total		100,0	100,0	100,0	100,0		100,0			100,0			100,0		100,0	100,0	100,0	100,0	100,0
Import into Germany	1-4	Food	11,9	0,6	2,8	2,8		28,6		1,1			21,2			6,0	14,8	17,2	7,1	8,5
	5	Raw materials	2,4	69,6	5,8	83,6		7,7		0,6			2,5			9,8	9,1	2,7	35,6	11,6
	6	Semi-processed goods	8,7	25,2	16,0	7,8		5,9		21,0			16,1			14,0	11,0	68,4	15,1	8,7
	7-8	Finished products	77,0	4,6	75,4	5,8		57,8		77,3			60,2			70,2	65,1	11,7	42,2	71,2
	Import to Germany, total		100,0	100,0	100,0	100,0		100,0		100,0			100,0			100,0	100,0	100,0	100,0	100,0
Turnover of Germany	1-4	Food	10,0	2,0	5,3	4,2		21,2		5,1			15,1			7,4	11,5	15,2	7,6	7,1
	5	Raw materials	1,7	39,7	2,8	58,1		5,7		0,5			1,1			2,5	3,2	1,7	18,0	6,0
	6	Semi-processed goods	8,9	15,1	8,8	6,4		5,4		12,8			8,1			11,0	6,2	42,4	10,2	7,0
	7-8	Finished products	79,4	43,2	83,1	31,3		67,6		81,6			75,6			79,1	79,1	40,8	64,2	79,9
	Turnover Germany – Baltic States, total*		100,0	100,0	100,0	100,0		100,0		100,0			100,0			100,0	100,0	100,0	100,0	100,0

* excluding returned, replaced and not allocated by commodity groups goods.

Note. The Baltic countries are presented in descending order of their turnover with Germany in 2014.

 

The main part of the German-Baltic trade (52.6% of the turnover) is in:

- German exports of finished products into Poland (14.1%), Russia (10.4%) and Sweden (7.0%),

- Import of finished products from Poland (10.8%) and raw materials from Russia (10.2%).

 

A substantial component is also import of raw materials from Norway (6.1%). In other cases, the share of product groups by country does not exceed 5%. Germany has a positive balance in the German-Baltic trade of food and finished products, and a negative balance – in the trade in raw materials and semi-processed goods. The total surplus for Germany consists mainly of excess surplus in finished products (Poland and Sweden) over the deficit of raw material (Norway and Russia).

The structure of German exports to the Baltic States and the overall German exports are very similar: the maximum difference (the share of food) is only slightly more than two percentage points. German imports from the Baltic States, by contrast, strongly deviates from the overall German import: on the one hand, by the shares of raw materials and semi-finished goods (the German import from the Baltic States has, respectively, 24 and 6 percentage points more than the overall German import); on the other hand, by the share of finished products (the German import from the Baltic States has 29 percentage points less than the overall German import). As a result, the basis of turnover of Germany with the world and with the Baltic States is the same – products with a higher degree of processing, namely finished products (64 and 80%, respectively), but the value of the goods with a low and medium degree of processing – raw materials and semi-finished products – in the German – Baltic trade is much larger (28%) than in the foreign trade of Germany as a whole (13%).

The structure of German exports in each of the Baltic countries is characterized by a common main feature – a strong dominance of finished products (ranging from 74.1% in Denmark to 94.0% in Russia; average Baltic and average world indicators are, respectively, 85.1 and 86.9%). At the same time, six countries have an additional focus: on food – Denmark (16.4%), Iceland (12.1%), Lithuania (11.6%), Latvia (10.2%) with the average Baltic and average world level of, respectively, 8.2 and 6.0%; semi-processed goods – Estonia (10.1%) and Poland (9.0%) with the average Baltic and average world level of, respectively, 5.5 and 5.6%. In four countries (Norway, Sweden, Finland, Russia) there are no such focuses.

As sources of the German import certain Baltic countries show considerable specificity. The most striking peculiarity is that of these three importers with an extremely low share of finished products (Russia – 4.6%, Norway – 5.8%, Iceland – 11.7%). For the rest of the Baltic countries this figure ranges from 57.8 to 77.3%, the average Baltic value is 42.2%, the world average is 71.2%. The above mentioned three countries are specialized in: Norway and Russia – raw materials (83.6 and 69.6%, respectively), Iceland – semi-processed goods (68.4%). Russia has an additional emphasis on semi-processed products (25.2%), Norway and Iceland do not have it. Since the absolute volume of imports of semi-processed products from Iceland is very small, the above-noted important role of the Baltic States for Germany as a source of raw materials and semi-processed products is concentrated in only two of the ten countries – Russia (raw materials and semi-processed products) and Norway (raw materials).

Among the other seven importers, who are leaders in finished products, two groups with additional focuses can be distinguished:

• focus on food – Denmark (28.6%), Lithuania (21.2%), Latvia (14.8%), Poland (11.9%) with the world average of 8.5%;

• on semi-processed products – Finland (21.0%), Lithuania (16.1%), Sweden (16.0%), Estonia (14.0%) with the world average of 8.7%.

The concretization of these features in the context of three-digit product classification is presented in Tables 8 and 9.

 

Table 8. Main goods of the German export in the Baltic States in 2014.

Country	Main goods of export from Germany to a country				Main goods of the additional export focus of the country
	Goods (code, name)	Share in the export from Germany to a country, %	Share of a country in the overall German export of these goods, %	Position of the country in the overall German export of the goods	Goods position (code, name)	Share in the export of Germany to a country, %
Norway	885. Passenger cars	19,2	1,3	18
Latvia	885. Passenger cars	12,4	0,1	48	423. Strong alcohol beverages	1,2
Sweden	885. Passenger cars	11,6	2,0	14
Iceland	885. Passenger cars	9,9	0,0	78	206. Fish, shellfish, mussels	2,1
Estonia	861. Equipment for production and distribution of electricity	9,2	0,3	44	669. Oil products	4,3
Finland	885. Passenger cars	8,4	0,6	27
Russia	884. Automobile components	8,3	3,3	10
Poland	884. Automobile components	8,2	5,1	6	669. Oil products	3,7
Denmark	861. Machinery for production and distribution of energy	5,3	1,7	18	204. Meat and meat products	3,9
Lithuania	834. Pharmaceutical products	5,0	0,2	49	395. Other foods of plant origin	1,6

Note: The Baltic countries are presented in descending order of the proportion of the main export commodity in the exports from Germany in 2014.

Table 9. Main goods of the German import from the Baltic States in 2014.

Country	Main goods of the import into Germany from a country				Main goods of the additional import focus
	Goods (code, name)	Share in the import into Germany from a country, %	Share of a country in the overall German import of these goods, %	Position of a country in the overall German imports of the goods	Position of the goods (code, name)	Share in the import into Germany from a country, %
Norway	518. Oil and natural gas	82,0	18,9	2
Russia	518. Oil and natural gas	66,6	30,8	1	669. Oil products	16,3
Iceland	645. Aluminum and aluminum alloys, including waste and scrap	64,3	5,6	8
Finland	708. Paperandcardboard	20,4	19,0	2	608. Semi-finished products of cellulose fiber	5,5
Poland	884. Automobile components	13,2	10,6	3	Fish, shell fish, mussels	2,0
Sweden	708. Paper and cardboard	12,1	21,3	1	608. Semi-finished products of cellulose fiber	4,2
Estonia	815. Items made of wood (apart from furniture)	11,6	2,2	10	607. Lumber	5,7
Lithuania	875. Furniture	10,0	1,3	18	206. Fish, shell fish, mussels	7,1
Latvia	709. Plywood and plywood sheets, chipboards	8,2	2,6	11	383. Oil cake	5,2
Denmark	834. Pharmaceutical products	6,9	2,1	11	204. Meat and meat products	6,7

Note. The Baltic countries are presented in descending order of the share of the main imported goods in the imports of Germany in 2014.

 

Passenger cars belonging to the product group “finished products” are the main commodity items of the overall German exports (0.9%), German exports to the Baltic States (6.9%) and German exports into five Baltic countries (Norway, Latvia, Sweden, Iceland , Finland). “Automotive components”, which are close to the group of passenger cars, are the leader in exports from Germany to Russia and Poland. Only in three cases, the leading role is played by other products, also belonging to the group of “finished products”- equipment for the production and distribution of electricity (Estonia and Denmark) and pharmaceutical products (Lithuania). Five countries (Poland, Russia, Sweden, Norway, Denmark) are in the top twenty of the German consumers for the corresponding main goods, with the highest position – the sixth in export of automobile components from Germany –is held by Poland. Two countries (Estonia and Poland) have the same additional export emphasis on semi-finished products (oil products), and there is no unity for countries with a focus on food.

Oil and natural gas belonging to the commodity group “raw material” are the main position of the overall German imports (9.5%), German imports from the Baltic States (32.9%) and German imports from Norway and Russia. Imports from Iceland to Germany are focused on aluminum (group “semi-finished products”). Specialization on the group “finished products” is characteristic of German imports from the other seven Baltic countries, including: specialization on products related to the processing of wood – from Finland, Sweden (paper and cardboard), Estonia (wood products except furniture), Lithuania (furniture), Latvia (plywood); on automotive components – from Poland, for pharmaceutical products – from Denmark. All Baltic countries are in the top twenty of the German suppliers of the relevant main products, with the highest – the first – positions held by Russia (oil/gas) and Sweden (paper/cardboard). Semi-finished products as an additional import emphasis are closely related to the main item: in Russia – oil products (to oil/gas), in Finland and Sweden – semi-finished products made of cellulose (paper/cardboard), Estonia – lumber (with woodwork).

Norway offers the highest shares in the main goods both in the export from Germany, and in the imports to Germany, but if for passenger cars, the figure is 19.2% of German exports, for oil/gas it is extremely high – 82.0% of German imports. Concentration of German imports on a single goods group is also characteristic of Russia (oil/gas – 66.6%) and Iceland (aluminum/aluminum alloys – 64.3%), while in other countries the figure is in the range of 6, 9 to 20.4%. In fact, German import from Norway, Russia and Iceland is monocultural, and monocultural are items of low-grade processing. Before the crisis, which began in autumn 2008, this one-sidedness did not prevent active growth of imports from these countries, but in 2008-2014 the cumulative decline in German imports from the Baltic States in the context of the four commodity groups appeared to be by about 3/5 due to the reduction of imports of oil/gas from Norway and Russia: Norway had more than ⅓, and Russia – about ¼ of this recession. As a result, imports from Norway in 2008-2014 decreased by 13.8%, while imports from Russia increased by 3.5%. However, this happened only because reduction of Russian imports of oil/gas was more than offset by a rise in imports of Russian oil products.

In the first quarter of 2015 this compensation was no longer valid. Trade turnover between Germany and Russia showed the most negative dynamics among the Baltic countries. Changes in the German-Baltic trade in the first quarter of 2015 compared to the same period in 2014 are presented in Tables 10 and 11.

 

 

 

 

Table  10. Trade between Germany and Baltic States in 2014-2015.

Country/Group of countries	Turnover			Export from Germany			Import into Germany			Balance for Germany
	January – March  2014	January – March 2015	Change, 2015/2014	January – March, 2014	January – March, 2015	Change, 2015/2014	January – March 2014	January – March 2015	Change, 2015/2014	January – March,  2014	January – March  2015
	Bln euros		%	Bln euros		%	Bln euros		%	Bln euros
Poland	20,9	23,3	111,2	11,4	12,4	109,5	9,6	10,8	113,2	1,8	1,6
Russia	18,1	12,4	68,4	7,5	5,0	66,1	10,5	7,4	70,1	-3,0	-2,4
Sweden	8,9	9,1	101,8	5,3	5,6	105,4	3,6	3,4	96,5	1,8	2,2
Denmark	7,1	7,1	99,8	4,0	4,4	108,5	3,0	2,7	88,3	1,0	1,7
Norway	7,3	6,5	89,7	1,9	2,1	106,5	5,3	4,4	83,5	-3,4	-2,4
Finland	3,9	4,2	107,5	2,2	2,3	101,1	1,7	2,0	116,0	0,5	0,3
Lithuania	1,0	1,0	104,7	0,6	0,6	104,9	0,4	0,4	104,3	0,2	0,2
Estonia	0,6	0,5	85,8	0,5	0,4	81,0	0,1	0,1	103,6	0,3	0,2
Latvia	0,5	0,5	94,0	0,4	0,3	92,5	0,2	0,1	97,7	0,2	0,2
Iceland	0,2	0,2	100,3	0,1	0,1	126,4	0,2	0,1	88,2	-0,1	0,0
Baltic countries, total	68,5	64,8	94,6	34,0	33,2	97,7	34,5	31,6	91,4	-0,6	1,6
World, total	508,9	528,1	103,8	278,3	293,3	105,4	230,6	234,8	101,8	47,6	58,5

 

Table 11. Factors of growth/recession in trade between Germany and the Baltic States in 2014-2015.

Country/group of countries

Turnover Germany – Baltic States, 2015/2014

Export from Germany into the Baltic States, 2015/2014

Import into Germany from the Baltic States, 2015/2014

Growth

Recession

Share in growth

Share in recession

Growth

Recession

Share in growth

Share in recession

Growth

Recession

Share in growth

Share in recession

Bln euros

%

Bln euros

%

Bln euros

%

Poland

+2,3

+82,3

+1,1

+56,6

+1,3

+81,2

Russia

-5,7

-86,7

-2,6

-95,7

-3,1

-69,5

Sweden

+0,2

+5,7

+0,3

+15,0

-0,1

-2,8

Denmark

-0,0

-0,2

+0,3

+18,0

-0,4

-7,9

Norway

-0,8

-11,4

+0,1

+6,7

-0,9

-19,4

Finland

+0,3

+10,4

+0,0

+1,3

+0,3

+17,4

Lithuania

+0,0

+1,6

+0,0

+1,5

+0,0

+1,1

Estonia

-0,1

-1,3

-0,1

-3,3

+0,0

+0,3

Latvia

-0,0

-0,5

-0,0

-1,0

-0,0

-0,1

Iceland

+0,0

+0,0

+0,0

+1,0

-0,0

-0,4

Baltic countries, total

+2,8

-6,6

+100,0

-100,0

+1,9

-2,7

100,0

-100,0

+1,6

-4,5

+100,0

-100,0

Note. The Baltic countries are presented in Tables 10 and 11 in descending order of their turnover with Germany in January-March 2015.

 

Russia accounted for more than 80% of decline of the German-Baltic trade, including more than 90% reduction in German exports and almost 70% reduction in German imports. The extent of the fall was 31.6% of turnover (including 33.9% for exports from Germany and 29.9% for imports into Germany). Noticeable, but not as dramatic, contraction of trade with Germany happened also in Estonia (-14.2% in turnover due to the decrease of exports from Germany by 19.0%) and in Norway (-10.3% in turnover due to 16.5% decline of imports in Germany). Two other countries – Denmark and Latvia – showed a moderate reduction in trade with Germany. The other five countries had a positive balance, with the biggest step forward made by Poland (it provided more than 80% of the growth of the German-Baltic turnover, including more than 50% of the growth of German exports and over 80% in increase in German imports). As a result, Poland, that was lagging behind Russia in turnover with Germany by 7.4% in 2012, surpassed Russia two-fold on this indicator in the first quarter of 2015.

The main products that led to a sharp collapse of the German-Russian trade:

• for exports from Germany – eight positions from the commodity group “finished products” (50.1% decline in the context of three-digit classification), namely: automotive components (13.7%), passenger cars (9.3%), aerial vehicles (6.8%), trucks (4.9%), machines without sectoral specialization (4.0%), office and computing equipment (3.9%), pharmaceutical products (3.8%), machinery for mining and construction (3.6%);
• for imports into Germany – one position from the commodity group “raw material”, namely: oil/gas (84.4% decline in the context of three-digit classification); the negative trend was reinforced by reduction of imports of semi-finished products, namely oil products (10.7%), which is Russia’s second most important import goods, that previously performed the role of a shock absorber.

The value of Russia as a trading company for Germany decreased markedly. The share of Russia in the export of goods from Germany declined from 2.6% in 2014 to 1.7% in 2015 (only three years ago, in 2012, it was 3.5%). As a German consumer the Russian Federation moved from the 12th place in 2014 to the 15th place in 2015. Russia’s best result was the 11th place in 2011-2012, and the worst – the 20th place in 1999. Russian automotive components descended from the 10th place in 2014 to the 18th place in 2015; Russia’s passenger cars – from the 15th to the 17th. If this trend persists, Russia can find itself already in two years in the third ten export partners of Germany, as it will cease to represent any serious business interest for Germany.

The share of Russia in the import of goods to Germany fell from 4.2% in 2014 to 3.1% in 2015 (the highest level of this indicator was recorded in 2012 – 4.7%). As a German supplier, Russia dropped from the 10th place in 2014 to the 12th place in 2015. In 2011-2013, the country kept the 7th place, in 1999 it was on the 16th place. In 2015, the Russian Federation retained the 1st place for the group “oil/gas” (its share in German imports amounted to 29.1%), but in the context of four-digit classification it kept the championship only for oil with a share of 28.2%, whereas for gas it moved to the 2nd place (with a share of 30.0%), losing to Norway (34.2%). Russia’s role in the import of oil/gas in Germany peaked in 2011 (36.8%); since then it has been steadily weakening, and since 2015 this trend has not been blocked, as before, by the increasing role of Russia in the German imports of oil products (2010 – 10.0%, 2014 – 23.3%, 2015 – 18.9%), and the other Russian products are not comparable with those main products in terms of imports in Germany. In the second ten import partners of Germany Russia will stay longer than in the same weight category for exports from Germany, but the probability of a significant reduction in the influence of Russian business on the German market is very high.

International trade, as well as the nature, abhors a vacuum. Collapsing trade relations with Russia will strengthen Germany’s orientation to other counterparties. Regarding the Baltic States, this would be beneficial, first of all, for Poland, Sweden and Norway: Poland will strengthen its leadership, Sweden will push Russia to the third place in terms of turnover, Norway will close the gap from Russia in terms of imports into Germany.

List of references

Statistisches Bundesamt. Genesis-Online Datenbank. Statistik 51000. Außenhandel. URL: https://www-genesis.destatis.de/genesis/online

 

 

[1] Here and elsewhere – calculated according to the Federal Statistical Office of Germany (Statistisches Bundesamt. Genesis-Online Datenbank. Statistik 51000. Außenhandel. URL: https://www-genesis.destatis.de/genesis/online). Dataareperiodicallyupdated. The Baltic countries are understood as countries that along with Germany are included in the Council of the Baltic Sea States (Denmark, Iceland, Latvia, Lithuania, Norway, Poland, Russia, Finland, Sweden, Estonia).

The Evolution of post-Soviet space suggests the emergence of a set of economic models. The three Baltic States (Estonia, Latvia, Lithuania) in the 1980-ies are building a new economic model (a unique to the post-Soviet space). The economy of the Baltic States is a complex system, which is highly dependent not only on economic but also on political realities. The objective of the study is to show the stages of evolution of the Baltic economic model, its main development features and prospects. The author used both economic and historical approaches to scientific analysis. The results of the study indicate that liberal Baltic economic model may persist in the medium term while maintaining previous support from the EU. Only good relations with Russia may help to maintain Baltic economic model.

Key words: Baltic States, Estonia, Russia, foreign economic relations, economic structure, economic model, the political elites.