The  German  and  Russian  economic  partnership  is 
underpinned  by  vision  as  a  modernization  partner 
that  includes  knowledge  transfer,  general  projects, 
workshops  and  training  programs  in  areas  such  as 
health  and  demographic policies, energy efficiency, 
infrastructure,  education  and  research,  and  legal 
cooperation.  German  economic  stakeholders  argue 
that  this  cooperation  helps  Russia  to  support 
modernize and diversify the economy and encourage 
the growth of small and medium-sized businesses in 
Russia.  As  foreign  investment  increases, 
liberalization and privatization of Russia's economy 
is an important prerequisite for modernization. Thus, 
German  policy  has  German  investment  objectives 
and  knowledge  transfer  should  help  modernize  the 
Russian economy, while the Russian government 
improves conditions for investment by strengthening 
the  rule  of  law,  adopting  European  standards, 
economic  liberalization,  investing  in  education  and 
research, and eradicating corruption (Meister, 2014: 
2). All these reforms should lead to democracy, less 
corruption,  and  more  of  a  European  Russia. 
Although this sounds good  in theory, but in reality, 
this idea is at odds with the interests of the Russian 
political  elite.  Until  the  violation  of  Russia  against 
international  law  in  the  annexation  of  Crimea  and 
separatist  military  aggression  in  Donbass,  the 
territory  of  Ukraine,  which  destabilize  the  principle 
of  Ostpolitical  fundamentals  that  made  Germany 
furious and spun the direction of its foreign policy. 
2  GERMAN-RUSSIA RELATION 
DURING MERKEL REIGN  
Reframing the Crimean conflict that broke out in 
2014,  for  the  first  time  Germany  demonstrated  its 
leadership stance through the EU in an international 
crisis.  After  the  annexation,  the  German 
government,  represented  by  Chancellor  Angela 
Merkel  and  Foreign  Minister  Frank-Walter 
Steinmeier,  insisted  that  Russia's  actions  in  this 
over-aggressive  Crimean  annexation  were 
unfortunate  and  have  damaged  what  has  been  a 
"peace order" for the past 70 years. This is because 
what  Russia  is  doing  is  not  just  a  political 
intervention  to  support  the  Crimean  separatist 
referendum of Ukraine, but also military aggression 
equipped with  combat  weapons.  This  is  certainly  a 
threat  to  Germany.  Initially,  during  the  annexation, 
Merkel  remained  in  constant  phone  contact  with 
Putin,  advising  Putin  to  withdraw  his  aggression 
from  Ukraine  while  the  West  could  still  help  save 
the country. Merkel gave a stern warning that Russia 
would  be  under  severe  financial  sanctions  if  Putin 
refused  to  comply  with  this  warning.  Although  the 
imposition of these sanctions will harm the German 
and  European  economies  themselves,  but  these 
sanctions  will  bring  down  the  Russian  economy 
much  deeper  and  Putin  can  not  expect  Russian-
German  pro  business  to  veto  this  action  (Rinke, 
2014: 7). 
German foreign policy towards Russia during the 
crisis  of  Ukraine  was  formed  by  the  interaction  of 
domestic  and  external  factors.  External  factors 
pushed  Berlin  to  take  a  critical  stance.  The  United 
States  and  some  EU  member  states,  particularly 
Poland  and  the  Baltic  states,  immediately  took  up 
hardliners vis-à-vis Russian policy. Initially, Merkel 
and Steinmeier sought to resolve the Crimean crisis 
through  negotiations.  When  this  strategy  failed, 
German  leaders  led  efforts  to  impose  sanctions  on 
Russia. Violent sanctions against this Russian action 
include  economic  sanctions  targeting  (1)  capital 
markets  (limiting  certain  trade  expenditures 
'contracts,  equity  or  similar  financial  instruments'), 
(2) defense sector (arms embargo), (3) use of 
multiple  goods  (  embargo on  the  use of  dual  goods 
and  technology),  (4)  the  oil  industry  (certain 
technology  embargoes  related  to  deep  water,  the 
Arctic and oil); Russia's release at the G8 Summit in 
Sochi  in  June 2014;  suspension  of  EU-Russia  talks 
on visa matters and  the New Testament; first travel 
ban and asset freeze for 21 Russian individuals; and 
much more (Raik et al, 2014: 4). 
According  to  the  Council  of  Europe,  the  main 
objective of EU sanctions against Russia is to bring 
about a  change in  the  actions of Russia in Ukraine, 
namely  the  annexation  of  illegal  territory  and  the 
deliberate  destabilization  of  neighboring  sovereign 
nations.  With  Russia  becoming  the  EU's  biggest 
neighbor  and  important  trading  partner,  this  is  the 
most  challenging  EU  sanctions  policy  to  date,  as 
well  as  its  foreign  policy  in  general.  The  EU  has 
been  drawn  into  a  geopolitical confrontation with  a 
large  regional  power.  Although  arguably  lacking  a 
clear strategy,  the  EU has used its  economic power 
in  unprecedented  ways  and  with  major  strategic 
implications.  However,  by  2016  easing  sanctions 
against  Russia  will  gradually  be  realized  if  there  is 
"substantial" progress on the Ukrainian issue. A day 
earlier,  German  Weekly  Der  Spiegel  published  a 
story  showing  that  German  Chancellor  Angela 
Merkel  is  considering  raising  some  early  sanctions, 
such  as  tourism  restrictions, in return  for Moscow's 
cooperation on local elections in eastern Ukraine. As 
Steinmeyer said in the Wall Street Journal: